Daily Brief Energy/Materials: Sanyo Special Steel, Gold, Chuoh Pack Industry, Crude Oil, SGX Rubber Future TSR20, TotalEnergies, Itochu Enex, Petroleos Mexicanos, Allegiant Gold , Infinity Natural Resources and more

• 6-7 years ago Sanyo Special Steel (5481 JP) bought out a large foreign specialty steel company, and funded it by getting Nippon Steel to inject capital at below book. 
• Now Nippon Steel is buying the rest of Sanyo Special Steel in a Tender Offer at 0.66x book, where most of book is Net Receivables, Inventory, WIP, and Materials.
• This is the second time in a decade where the Board has decided to sell control of itself at far below book value. They should be ashamed of themselves.

• The book discusses new arguments for investing in gold in the modern era, including the threat of cyber financial warfare.
• The hosts discuss the book’s exploration of notable advocates and critics of gold investment, including Milton Friedman and Roubini.
• Emphasizing the new arguments in favor of gold investment in the 21st century alongside traditional reasons

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• Today, Nikkon Holdings (9072 JP) announced it would take over Chuoh Pack Industry (3952 JP) for ¥5,034/share. It closed today at ¥1,349. This is a HUGE win for governance.
• The 273% premium is not the big win here. For holders it is, of course, but for Japan Inc shareholders everywhere, the win was the auction process. 
• This could have come out at 100% premium and that might have been OK. As it is, cross-holders and one big holder together get this deal done. Congrats!

• For the week ending 24/Jan, US crude inventories increased by 3.5m barrels, missing expectations of a 2.2m barrel build. Gasoline stockpiles rose, while distillate stocks fell more than expected.
• US natural gas inventories fell by 321 Bcf for the week ending 24/Jan, beating analyst expectations of a 317 Bcf drawdown. Inventories are 4.1% below the 5-year seasonal average.
• Shell’s Q4 adjusted earnings dropped 38.3% QoQ and 49.9% YoY, missing estimates due to weak margins and oil prices. HSBC raised its PT on Chevron but cut it for Exxon.

• iSNR (Indian Sustainable Natural Rubber) to deal with EUDR  
• INR Konnect to help idling plantations come alive  
• iSNR to fetch a premium of 10-35% in global markets  

• TotalEnergies’ Q4 revenue is expected to drop 22.5% YoY, with EPS down 14.8% YoY. For 2024, revenue and EPS are projected to fall 5.2% and 17.8%, respectively.
• TotalEnergies expects lower crude prices to weigh on earnings but anticipates gains from higher LNG output, stronger gas trading, and rising LNG prices, setting it apart from peers.
• TotalEnergies expects a slight increase in Q4 oil and gas production, with its Integrated LNG segment benefiting from an output rise and higher realizations.

• Cumulative Q3 FY03/25 sales revenue was JPY678.3bn (-4.4% YoY), with operating profit at JPY23.0bn (+2.2% YoY).
• Home-Life Division sales revenue rose to JPY52.5bn (+5.7% YoY), driven by higher LP gas import prices.
• Power and Utility Division sales revenue declined to JPY58.3bn (-36.0% YoY) due to decreased market transactions.

• We need to see concrete action from the Mexican government to maintain an Outperform recommendation.
• Pemex’s deteriorating operational metrics will likely increase its need for government assistance.
• Within Pemex’s capital structure, we continue to prefer the PEMEX (B3/BBB/B+) 5.950% 2031, the PEMEX 6.625% 2035, the PEMEX 6.625% 2038, and the PEMEX 7.690% 2050.

• What you need to know: • Following two months of poor returns, the metals and mining market rose sharply in January as tariff uncertainties rose and the treasury yields decreased.
• • In January, gold was up 6%, silver was up 7%, and copper was up 7%.
• The equities exhibited leverage to the commodity price increases, with the GDX up 16%, GDXJ up 15%, and SILJ up 10%.

• Throughout the week, Infinity Natural Resources had to manage the Venture Global (VG) headwind — a previously broken IPO from the energy sector. 
• While there was pushback on valuation with some buyside investors, Infinity Natural Resources was able to successfully convey their story.
• There has now been three energy IPOs in 2025 with two winners.