Daily Brief Energy/Materials: Novelis Corporation, CNGR Advanced Material, Zijin Gold, Repsol SA, Southern Copper, Intermin Resources, Dharmaj Crop Guard, Crude Oil and more

• Novelis is the world’s largest producer of flat-rolled aluminum (FRP) products and the global leader in aluminum recycling, uniquely positioning it to benefit from the secular trend towards lightweighting and sustainability in the automotive and beverage packaging industries.
• The company’s business model is centered on a closed-loop recycling system, which provides a significant cost and sustainability advantage over primary aluminum producers, as recycling aluminum requires only 5% of the energy needed for primary production.
• Significant capital investments in expanding rolling and recycling capacity are underway to meet growing demand, particularly in the high-value automotive and beverage can segments. However, operational disruptions and cost inflation present near-term headwinds to profitability.

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• CNGR Advanced Material (2579 HK)‘s IPO price was fixed at the low end at HK$34.00. However, valuation is inexpensive, and initial price weakness is a long-term opportunity.
• Three groups of close peers, including nickel-related companies, mining companies, and lithium/battery companies, trade on average FY26F PER of 21x, vs. CNGR’s 12.5x.
• By parking it with the steepest HA discount of its peers (26.2%), CNGR will be valued at HK$40.07, as its IPO price implies a massive 37.4% discount.

• CNGR Advanced Material is a global market leader in the production of precursor cathode active materials (pCAM), a critical component for lithium-ion batteries used in electric vehicles (EVs), energy storage, and consumer electronics.
• The company has demonstrated a strong long-term revenue growth trajectory, driven by the expanding new energy market. However, recent financial performance shows signs of pressure, with a year-over-year decline in net income for the first nine months of 2025, primarily due to falling nickel and cobalt prices.
• The recent H-share listing on the Hong Kong Stock Exchange is poised to provide significant capital for global expansion but comes at a notable discount to its A-shares, presenting a potential valuation opportunity for institutional investors, as noted by Smartkarma analysts.

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• Stock price of Zijin Gold fluctuated up and down and not closely followed gold prices, which may disappoint investors who buy gold companies to take advantage of rising gold prices.
• We’ll reduce holdings of gold/silver and hold cash to deal with liquidity crises. Given the hyperinflation brought about by dollar depreciation, we’ll focus on inflation trading after liquidity crisis occurs.
• The main investment targets we will select include: commodities (e.g. gold, silver, copper). Upstream gold mining companies (e.g. Zijin Mining, Zijin Gold) will have priority over downstream company like Laopu.

• CNGR Advanced Material (2579 HK) is looking to raise up to US$500m in its upcoming Hong Kong IPO.
• CNGR is a Chinese battery-component producer and a new energy materials company.
• We have covered various aspects of the deal in our previous note. In this note, we will talk about the demand and trading dynamics.

• Repsol Is evaluating a spin-off and potential reverse merger with APA Corp (APA US) to list its upstream division in the U.S., accelerating its planned 2026 “liquidity event.”
• A U.S. listing could narrow Repsol’s valuation gap versus American E&Ps, surface hidden upstream value, and improve liquidity, while management insists on maintaining ≥51 % ownership of the new entity.
• The proposed structure offers upside asymmetry: even if talks stall, Repsol retains IPO or private-placement options; a completed deal could unlock 15–25 % SOTP upside through U.S. multiple convergence.

• Southern Copper (SCCO US) reported stellar earnings and execution in Q3 2025, with revenues/operating income up 15% and 21% YoY, respectively, beating street estimates by ~4-5%.
• The company included slides in its presentation deck highlighting that the copper deficit could rise to 3 million tons by 2030e and 12.1 million tons by 2040e. 
• This would be led by a transition to EVs (electric vehicles), greater use of renewable energy with higher capex intensity, and other nascent areas of demand, such as AI infrastructure.

• Horizon Minerals Limited (ASX:HRZ) is an emerging junior gold producer with 1.8moz of gold resources located around the Kalgoorlie and Coolgardie regions of Western Australia.
• HRZ has announced a deal to sell the Lake Johnston Project for a total consideration of $35m to Forrestania Resources Ltd (ASX:FRS) which is expected to complete in January 2026.
• The deal is accretive to HRZ given we had nil value ascribed to the project whilst the consideration is greater than what HRZ paid (~$30m) to acquire Poseidon Nickel (ASX:POS), predominately for Black Swan.

• Dharmaj Crop Guard had commissioned its INR 275 crore Active Ingredients (AI) plant, cementing its transformation from a formulations-only company to a fully integrated AgroChem player. 
• This strategic backward integration provides a massive new growth lever. However, it came at a short-term cost, as “front-loaded expenses” resulting in EBITDA losses from new plant last year.
• With the new plant’s losses absorbed, Dharmaj is positioned to leverage its integrated model, a pan-India distribution network, to pursue its ambition of becoming a 2,000 crore company by 2030.

• Crude oil futures on Friday continued to recover from three-week lows as Russian supply disruptions and broader geopolitical concerns got the better of oversupply fears at least for the day Front-month Jan25 ICE Brent futures were trading at $64.35/b (2015 GMT) versus Thursday’s settle of $63.01/b, while Dec25 NYMEX WTI was at $60.04/b against a previous close of $59.70/b.
• The latest drone strike from Ukraine targeted the Black Sea export hub of Novorossiysk overnight Thursday.
• Multiple reports, including from Russian and Ukraine media, reported a major blaze at the terminal, suggesting significant disruption in loading crude from the Black Sea hub.