In today’s briefing:
- Soul Patts & Brickworks: Index Impact of A$14bn Merger
- Soul Patts/Brickworks To Unwind Circularity
- Ivanhoe Mines (IVN CN): Seismic Setback Creates a Valuation Gap
- Zijin Mining (601899 CH / 2899 HK): Evaluating the Impact of Kakula Suspension
- Eagle Materials: A Closer Look At Its Environmental & Economic Efficiency Projects & Other Major Growth Levers!
Soul Patts & Brickworks: Index Impact of A$14bn Merger
- Washington H. Soul Pattinson (SOL AU) and Brickworks Ltd (BKW AU) have executed a binding Combination Deed to implement an A$14bn merger that simplifies the company structure by eliminating crossholdings.
- The merger ratio is a good one for Brickworks Ltd (BKW AU) shareholders and the benefits to both sets of shareholders should see the merger approved.
- There will be large passive buying in Washington H. Soul Pattinson (SOL AU) from global and local index trackers and that could lead to short covering.
Soul Patts/Brickworks To Unwind Circularity
- The cross-shareholding between Washington H. Soul Pattinson (SOL AU) (Soul Patts) and Brickworks Ltd (BKW AU) was established in 1969 to defend the companies from the corporate raiders.
- Perpetual pursued a case in the Federal Court of Australia, alleging that the cross-shareholding was oppressive to minority shareholders; however the claim was dismissed in 2017.
- Today, via inter-conditional Schemes, the circularity is set to be unwound through a merger. Soul Patts currently owns 43.3% in Brickworks, and Brickworks 26% in Soul Patts.
Ivanhoe Mines (IVN CN): Seismic Setback Creates a Valuation Gap
- Kakula mining is suspended due to seismic activity; dewatering and repairs are ongoing, with potential resolution by late Q3 2025 as operations gradually stabilize.
- Ivanhoe quadrupled copper output since 2021, maintaining over 55% EBITDA margins through high-grade ore and efficient operations.
- At US$2,000/t copper reserve value, Ivanhoe offers 40%+ upside—past disruptions like Vale and Freeport saw strong rebounds as uncertainty cleared.
Zijin Mining (601899 CH / 2899 HK): Evaluating the Impact of Kakula Suspension
- A 4–6 month Kakula disruption could reduce Zijin’s 2025 copper output by 4–8%, cutting EBITDA by ~7–11%.
- Ramp-Ups at Julong and Čukaru Peki can offset ~60–70% of the lost volume and partially protect margins.
- Lithium is expected to grow from 8% to 20% of EBITDA by 2028, driven by 300kt LCE capacity from low-cost brine assets.
Eagle Materials: A Closer Look At Its Environmental & Economic Efficiency Projects & Other Major Growth Levers!
- Eagle Materials’ recent earnings release for the fiscal year 2025 highlights various aspects that investors might consider when evaluating the company’s performance and prospects.
- The company reported a record revenue of $2.3 billion and record earnings per share of $13.77, marking its fourth consecutive year of record financial results.
- Despite achieving these records, the results present a mixed picture, depicting both strengths and challenges faced by the company.
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