In today’s briefing:
- Lotte Chemical Offering: Schedule Clarifications & Trading Considerations
- Essential Metals (ESS AU)’s Enters a SID at A$0.50 with a Tianqi/IGO JV
- Quiddity Leaderboard-S&P/ASX Mar 23: Multiple Names with Decent Impact
- Norwest Energy (NWE AU): Valuation Read Across from Warrego’s Takeover Battle
- TEMC: Reduces IPO Price & Bookbuilding Results
- Chevron: The Narrative Is Your Worst Enemy
- The Commodity Report #85
Lotte Chemical Offering: Schedule Clarifications & Trading Considerations
- The subscription starts on January 19, so the pricing is January 16, three trading days earlier. The shorting restriction runs until January 16, which means the 16th is inclusive.
- There was no arb spread opening during the last four trading days of the subscription rights trade period. Nonetheless, this event had some impact on Lotte Chemical’s futures trading.
- Considering this, the trade that can be considered at this point would be unhedged shorting. We target potential inflow to adjust the second issuing price downwardly and post-listing overhangs.
Essential Metals (ESS AU)’s Enters a SID at A$0.50 with a Tianqi/IGO JV
- Essential Metals (ESS AU) has entered a SID with a Tianqi Lithium (002466 CH)/IGO Ltd (IGO AU) JV at A$0.50, a 44.9% premium to the undisturbed price (6 January).
- The scheme is subject to shareholder and FIRB approval. The FIRB should approve a 49% Aussie-owned offeror for a project to be processed in Australia.
- There is a possibility of a competing bid as the offer is far from a knockout bid and ESS lacks substantial shareholders. The scheme meeting is in April.
Quiddity Leaderboard-S&P/ASX Mar 23: Multiple Names with Decent Impact
- In this insight, we take a look at the potential index changes for S&P ASX 20, 50, 100, 200, 300 in the run up to the March 2023 Rebalance.
- I expect there to be one, two, and four changes, respectively, for the ASX 20, ASX 100, and ASX 200 indices in the March 2023 Rebalance.
- For ASX 300, there could be 14 ADDs and 12 DELs in the March 2023 Rebalance including some high impact names based on days-to-trade.
Norwest Energy (NWE AU): Valuation Read Across from Warrego’s Takeover Battle
- Mineral Resources (MIN AU)‘s off-market takeover offer at 1 MIN share for every 1,367 NWE shares closes on 6 February. The target’s statement will be despatched by early to mid-January.
- The Norwest Energy NL (NWE AU) Board recommends shareholders take no action. The timing is opportunistic and motivated by recent Perth Basin consolidation activity.
- Hancock’s latest bid for Warrego Energy (WGO AU) suggests that Norwest is worth at least 20% more than MinRes’ offer. Expect the Board to reject the offer.
TEMC: Reduces IPO Price & Bookbuilding Results
- TEMC announced its IPO price of 28,000 won, which was lower than the IPO price range of 32,000 won to 38,000 won.
- There were 560 institutions that participated in the IPO bookbuilding survey and the demand ratio was 31.3 to 1.
- Our base valuation is 38,363 won per share, representing a 37% upside to the IPO price of 28,000 won. The reduced IPO price has made the IPO more attractive.
Chevron: The Narrative Is Your Worst Enemy
- Chevron has nearly doubled since I first laid out my investment thesis, all the while negative sentiment remained high.
- Short-term volatility is to be expected, however, remaining focused on the long-term competitiveness of the business is more important, according to the company’s chief executive.
- Flashback to early 2021: Share prices of high-growth and technology companies are making new highs.
The Commodity Report #85
- In the world of natural resources, iron ore is probably the most China-centric commodity — even more than crude oil, copper or soybeans.
- Beijing accounts for more than 70% of the world’s imports of the mineral.
- Therefore it’s not hard to see that there is a direct correlation between Iron ore prices and the health of the Chinese economy.
💡 Before it’s here, it’s on Smartkarma
Sign Up for Free
The Smartkarma Preview Pass is your entry to the Independent Investment Research Network
- ✓ Unlimited Research Summaries
- ✓ Personalised Alerts
- ✓ Custom Watchlists
- ✓ Company Data and News
- ✓ Events & Webinars
