Energy
Whitehaven Coal (WHC) Production growth no substitute for profits 19/06/2013 17:30
Whitehaven shares are down 38% in 2013 reflecting a swing from profits to losses and poor resource sector sentiment. However,...
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Whitehaven shares are down 38% in 2013 reflecting a swing from profits to losses and poor resource sector sentiment. However, the thermal coal price is down just 4% in USD terms and actually up 3% in AUD terms to AUD 91 per tonne. The sale of Nathan Tinkler’s 20% shareholding has no impact on our fair value estimate.
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Santos (STO) Fair value crimped by capex but trend to improving returns persists 13/06/2013 16:09
We reduce our Santos fair value estimate by 18% to AUD 14 per share after forecasting increased sustaining capital expenditure....
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We reduce our Santos fair value estimate by 18% to AUD 14 per share after forecasting increased sustaining capital expenditure. At the current share price, our recommendation is downgraded to Hold. Including exploration expenditure, we project AUD 10.3 billion in all up capital expenditure for the five years to 2017. This includes AUD 4.3 billion on Gladstone and PNG LNG projects, which combined will increase group equity production by 60% to 85 million barrels of oil equivalent (mmboe) by 2017.
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BlueScope Steel (BSL) Asset sales positive but outlook still challenging 13/06/2013 14:13
We have taken a closer look at the Nippon Steel joint venture agreement. The deal saw BlueScope sell 50% of...
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We have taken a closer look at the Nippon Steel joint venture agreement. The deal saw BlueScope sell 50% of its Coated Products joint venture to Nippon Steel for USD 540 million in March 2013. The price paid equates to approximately 12 times EBITDA or 20 times EBIT, quite rich multiples and an attractive price to be selling. The concurrent high priced asset sale and debt repayment which cleans up the balance sheet is a tick for management.
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Bradken (BKN) Strong headwinds will restrict growth 18/06/2013 08:58
We review our earnings forecasts, specifically re-evaluating the growth prospects of Bradken’s businesses with exposure to the resources sector.
Qantas Airways (QAN) Difficult to build a moat in the sky 19/06/2013 13:46
The airline industry is notoriously volatile, with earnings sensitive to a number of moving parts. Passenger numbers are a key...
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The airline industry is notoriously volatile, with earnings sensitive to a number of moving parts. Passenger numbers are a key driver of profitability, the more passengers on a flight reduces costs per passenger. This load factor, or percentage of seats on a plane filled, and ticket prices are key margin drivers. For the ten months to April 2013 Qantas reported a 3.6% increase in passenger numbers, but additional capacity in most markets continues to pressure profits.
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Transfield Services (TSE) Continuing mining sector slowdown signals tougher times ahead 19/06/2013 10:39
We review our earnings forecasts specifically re-evaluating the growth prospects of Transfield’s businesses with exposure to the domestic economy and...
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We review our earnings forecasts specifically re-evaluating the growth prospects of Transfield’s businesses with exposure to the domestic economy and resources sector.
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REA Group (REA) Change in pricing model set to accelerate revenue growth 19/06/2013 13:43
REA Group is in the process of changing its pricing model. This adds revenue uncertainty within a business which operates...
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REA Group is in the process of changing its pricing model. This adds revenue uncertainty within a business which operates under high operating leverage - 80% of its cost structure is largely fixed.
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Tabcorp (TAH) Assigning a narrow moat to Tabcorp 19/06/2013 15:02
After assessing the competitive advantages of Tabcorp’s operation, we are awarding Tabcorp a narrow economic moat. This is attributable to...
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After assessing the competitive advantages of Tabcorp’s operation, we are awarding Tabcorp a narrow economic moat. This is attributable to the long term wagering licence and network effect from the totalisator pool.
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Health Care
Sigma Pharmaceuticals (SIP) Trans-Tasman consolidation; scale paves the way for increased competition 13/06/2013 16:00
Last week, New Zealand pharmaceutical and medical products company – EBOS Group – acquired leading Australian peer Symbion. While the...
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Last week, New Zealand pharmaceutical and medical products company – EBOS Group – acquired leading Australian peer Symbion. While the acquisition is still subject to certain conditions, including EBOS shareholder approval which is slated for 14 June 2013, we don’t expect any surprises.
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more Health Care reports Financials
Challenger Limited (CGF) Challenger’s Update Highlights Strong Growth Prospects 19/06/2013 14:59
Challenger’s business update reinforces strong long-term growth opportunities for the annuity market as increasing numbers of superannuants move from the...
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Challenger’s business update reinforces strong long-term growth opportunities for the annuity market as increasing numbers of superannuants move from the accumulation phase into the pension phase. Challenger is a clear leader in the Australian retail annuity market, holding an estimated 80% market share and quickly establishing strong brand recognition and broad distribution through financial advisers.
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Charter Hall Group (CHC) Building up funds management platform is a low risk growth option 19/06/2013 18:43
Charter Hall Group's Core Plus Office Fund (CPOF) has formed a partnership with two other investors to acquire the AUD...
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Charter Hall Group's Core Plus Office Fund (CPOF) has formed a partnership with two other investors to acquire the AUD 458 million Bankwest Place and associated Raine Square shopping centre in the Perth CBD. The acquisition does not require any co-investment from Charter Hall and will be earnings accretive from 2014.
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Platinum Asset Management (PTM) Impressive growth in FUM continues 19/06/2013 17:37
We update our forecasts following the release of Platinum’s May 2013 funds under management (FUM) and fund performance statistics. Narrow...
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We update our forecasts following the release of Platinum’s May 2013 funds under management (FUM) and fund performance statistics. Narrow moat asset manager Platinum has delivered very impressive FUM growth. FUM as at 31 May 2013 stood at AUD 19.8 billion, up 33% since June and 19% from December 2012. The vast majority of FUM growth has come from strong investment performances, with the flagship International Fund returning 32% over one year, comfortably beating the benchmark MSCI index which returned 27%.
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DUET (DUE) Simplification is minor but worthwhile 19/06/2013 15:45
Management proposes modestly reducing DUET’s complexity and opacity via a restructure aimed at reducing the number of stapled entities in...
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Management proposes modestly reducing DUET’s complexity and opacity via a restructure aimed at reducing the number of stapled entities in the group from six to four. At the same time, the group will create a corporate arm and a funding arm. The meeting to vote on the proposal is to be held on 18 July 2013.
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AGL Energy (AGK) Retail competition intensifying but dividend safe 13/06/2013 16:34
Major energy retailers, Origin Energy and Energy Australia (EA), are finally responding to AGL’s market share gains over the past...
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Major energy retailers, Origin Energy and Energy Australia (EA), are finally responding to AGL’s market share gains over the past two years. Since they acquired the New South Wales government owned energy retailers in 2011, AGL happily targeted their customer bases, and with much success. In the first half of fiscal 2013 AGL had a stellar run, increasing customer numbers and profit margins while its competitors floundered.
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