1165 replies to this topic

[Midas1]

 Hi M...nice summary..

 

One thing you need to check as i haven't..

 

Does Exxaro export any coal to China?

I know last week China banned all imports of Coal from Ozz...

 

 

Also think on fundamentals EXX a good long term punt...

Thanks, at least you don't seem put out I know an ole fellow who genuinely worked on the floor   ffffkkkkk share people can be fkkkn bad humoured

[Polly]

PS..i do own EXX, acl and Kio from the old Iscor days.....Bought Iscor at R2.00 and then given shares in these 3 comanies when company restructured..

 

In the good days we had following  high prices

 

Exx R300

ACL R250.00

KIo R600.00

 

and then lows of after crash

 

Exx R50.00

ACL R3.00

Kio R50.00

[Polly]

 

Bascis on what he sent me, will ask him if we chat tommorrow ..

 

 

There are many divergent views on Exxaro, driven primarily by the fact that coal is seen as a declining industry globally owing to concerns over emissions. That being said, we have seen coal remain resilient amidst these concerns as most countries are still reliant on coal and it is still one of the cheapest energy supplies out there. For South Africa, coal remains a key part of the development story given our large coal reserves as well as the fact that we have built mammoth power stations that are reliant on coal.

 

On Exxaro however, the story is not just about coal, but is also about its ability to generate excess returns from its various underlying businesses. As a base case, we think the market is underestimating the ability of Exxaro to return cash back to shareholders and the following reasons underlie our positive view on the company:

 

1. Tronox stake sale

 

While Tronox share price has retreated over the past year, it still makes up a considerable 7% of Exxaro's market. Management has indicated that it plans to exit its stake over the next six months. We expect the proceeds to be returned back to shareholders. At current valuations this equates to just under R4bn of cash which could be paid out as a special dividend.

 

1. Cash returns from coal

 

We expect the capex profile to peak this calendar year and see coal capex declining to R3bn in 2021E from the current R6.2bn in 2019E. The declining capex should lead to improvements in earnings and free cash flows as shown in the chart below.

 

 

 

1. Flow through of dividends from SIOC

 

Furthermore, management has recently announced the passing through of the SIOC dividend which is a positive. Furthermore, there is also the possibility for the company to exchange its stake SIOC for a stake in Kumba. This will bring greater transparency and better ability to monetize the stake in our view.

 

 

1. Potential to increase export revenue from the coal business by 2022

 

Exxaro has been investing heavily in its coal business; however, we think the market is not giving Exxaro the full benefit of its improving coal quality. We see potential upside to the valuation of the coal business and value it at R32bn vs the market implied value of R22bn.

 

1. Attractive valuation

 

Exxaro is trading at a PE of 7.5x on our numbers vs a historic PE of around 11.5x and a "fair" PE of 10x. We see current levels as undervalued and have a buy rating with a pt of R190.

 

 

 

 

 

 

it nicely...sorry for being lazy.

Cheers.

 

P.S. I'm discussing Exxaro...I am however aware of their stake in KIO. 

 

 Hi M...nice summary..

 

One thing you need to check as i haven't..

 

Does Exxaro export any coal to China?

I know last week China banned all imports of Coal from Ozz...

 

 

Also think on fundamentals EXX a good long term punt...

[Midas1]

Bascis on what he sent me, will ask him if we chat tommorrow ..

 

 

There are many divergent views on Exxaro, driven primarily by the fact that coal is seen as a declining industry globally owing to concerns over emissions. That being said, we have seen coal remain resilient amidst these concerns as most countries are still reliant on coal and it is still one of the cheapest energy supplies out there. For South Africa, coal remains a key part of the development story given our large coal reserves as well as the fact that we have built mammoth power stations that are reliant on coal.

 

On Exxaro however, the story is not just about coal, but is also about its ability to generate excess returns from its various underlying businesses. As a base case, we think the market is underestimating the ability of Exxaro to return cash back to shareholders and the following reasons underlie our positive view on the company:

 

1. Tronox stake sale

 

While Tronox share price has retreated over the past year, it still makes up a considerable 7% of Exxaro's market. Management has indicated that it plans to exit its stake over the next six months. We expect the proceeds to be returned back to shareholders. At current valuations this equates to just under R4bn of cash which could be paid out as a special dividend.

 

1. Cash returns from coal

 

We expect the capex profile to peak this calendar year and see coal capex declining to R3bn in 2021E from the current R6.2bn in 2019E. The declining capex should lead to improvements in earnings and free cash flows as shown in the chart below.

 

 

 

1. Flow through of dividends from SIOC

 

Furthermore, management has recently announced the passing through of the SIOC dividend which is a positive. Furthermore, there is also the possibility for the company to exchange its stake SIOC for a stake in Kumba. This will bring greater transparency and better ability to monetize the stake in our view.

 

 

1. Potential to increase export revenue from the coal business by 2022

 

Exxaro has been investing heavily in its coal business; however, we think the market is not giving Exxaro the full benefit of its improving coal quality. We see potential upside to the valuation of the coal business and value it at R32bn vs the market implied value of R22bn.

 

1. Attractive valuation

 

Exxaro is trading at a PE of 7.5x on our numbers vs a historic PE of around 11.5x and a "fair" PE of 10x. We see current levels as undervalued and have a buy rating with a pt of R190.

 

 

 

 

 

 

it nicely...sorry for being lazy.

Cheers.

 

P.S. I'm discussing Exxaro...I am however aware of their stake in KIO. 

[Midas1]

Ill check reasoning tomorrow ...right now up 2% today..

[soutie]

Hi get your mate (used to trade on the old JSE floor) to explain the reasoning behind swopping out their stake in TronoxxSA to TronoxxUK but TronoxxSA are funding it.

Is this some sort of externalizing their money to the LSE...I didn't look to deep into it myself but that was my knee-jerk opinion.

I don't hold them but maybe I will if your mate (used to trade on the old JSE floor) Yeah that guy...! can explain it nicely...sorry for being lazy.

Cheers.

 

P.S. I'm discussing Exxaro...I am however aware of their stake in KIO. 

[Midas1]

Excarro looking promising..i have cfds long but going buy some for my equity portfolio as well..

[Midas1]

Imo if you talking multichoice don't go there...

[Investment novice]

Shame man sorry for people in..my made bought 5000 of the multichoice on opening..huge gamble...sold allready..not for me the big gamble's though..could gone anyway

How viable is this business. Is the share price warranted. Would we see a pullback.

Sent from my SM-G950F using Sharenet Sharechat mobile app

[Midas1]

Thanks will look..gone up nicely today

[Polly]

Exx exxaro they reckon could go 190..myfriend who was on jse on floor in old days adamant

EXX follows KIO to a certain degree..own a stake in there

[Midas1]

Exx exxaro they reckon could go 190..myfriend who was on jse on floor in old days adamant

[Polly]

https://www.moneyweb...ol-of-shoprite/

 

 

C Wiese the legends of legends.....Sells his voting right shares for much more than ordinary shares...

 

All he will do is cash up the deferred shares , buy the same  quantity ordinary shares and still have control,.....and pocket a fortune....suckers

[Midas1]

Bought exarro to go long..looks good...so far...150 this am...

[Midas1]

Shame man sorry for people in..my made bought 5000 of the multichoice on opening..huge gamble...sold allready..not for me the big gamble's though..could gone anyway

[Polly]

There you go...More delays....    

and where is thr JSE on this...This stock should be suspended as per the rules....

[Polly]

 

and for you Lionel:

 

When new management came in ,  they thought this was a straight forward exercise of house cleaning and then rest of businesses will run smoothly hence the date predictions....

 

and what happens...mess upon mess discovered , hence appoint lawyers to board....and more mess and hence appoint restructuring  specialist to board...

 

and hence change of dates which will continue as more mess is discovered...

 

 

Whos next to be appointed??  Sequestration or bankruptcy specialist?? How about Athul Gupta or Jacob Zuma to the board , best thing they will ever do...

 

 

 

There you go...More delays....    

[Midas1]

Yea,, but i sold all my npn

[Polly]

today MCG lists separately...dont get all scared/excited to see a big drop in NPN....merely evens out as you will own both!!

Edited by Polly, 27 February 2019 - 08:33 AM.

[Midas1]

Respectful of other opinions, but i keep it simple if i have 2 million or Whatever in my pocket and looking around city to buy business would i buy company with dodgy crook like behaviour or not. Trying to keep it real with my share picks..would i personally want a company or not.