Wickhams Hill

Pan-Asian special situations and event driven ideas.

[Wickhams Hill @wickhamshill]

Wickhams Hill published an open letter to the ASX last night about Lifestyle Communities' unclear debt covenant disclosures.
We also questioned if the ASX is addressing delayed disclosures on development issues and VCAT proceedings affecting the business model.
$LIC $LIC.ax

That letter is available here:
https://t.co/upSYV0dnea

You can join our mailing list here: https://t.co/UaoNWvyJPT

[Wickhams Hill @wickhamshill]

For more information about KLF and their work in combating gynaecological cancer in Hong Kong, visit: https://t.co/22PItaCE50
https://t.co/iQTM5EJVUY

[Wickhams Hill @wickhamshill]

The team at Wickhams Hill appreciates the opportunity to present at SOHN-HK 2024, where we discussed our views on Lifestyle Communities $LIC.AX in support of the Karen Leung Foundation. Video available here: https://t.co/4vMzAKhdPV 🧵1/3

[Wickhams Hill @wickhamshill]

Breaking tradition, @KarenLeungFdn has made the presentation publicly available. Although what we said back in May has played out, it is only the beginning of what we see ahead for $LIC. 2/3

[Wickhams Hill @wickhamshill]

Mongolian coal trucking across the Ganqimaodu border stays well above 1000 per day despite rumors of steel output curbs. The reality here is that Mongolia is becoming a primary import source for China and volumes between the two countries are set to grow dramatically. #Cokingcoal

[Wickhams Hill @wickhamshill]

We've been looking into https://t.co/w5bPf42s4j for over a year now and Mongolian #CokingCoal imports overland to China now exceed 25m tons, making up the majority of imports. https://t.co/w5bPf42s4j's contribution to this is north of 3m tons of washed HCC by 1H23. #CoalTwitter

[Wickhams Hill @wickhamshill]

Aussie #cokingcoal imports into China remain especially weak with Russian imports expanding. However, @Kpler data only shows seaborne imports. Mongolian coal coking coal exports by land to China are close to 25mn tons as of May 2023 and are expected to reach 50mn by end 2023.

[Wickhams Hill @wickhamshill]

25mn tons by end May 2023: https://t.co/pXa2cw1WDn

50mn ton target: https://t.co/pXa2cw1WDn

[Wickhams Hill @wickhamshill]

Steel prices rise boosting sentiment. Coking plants restock competitively. Mines raise prices due to tight supply reporting steady sales, no inventory pressure. Mongolian coal inflows increase. #CoalTwitter prices: Mongolian #5 coking coal offered at 1,050-1,100 yuan/t. #Steel

[Wickhams Hill @wickhamshill]

Chinese coking coal markets have more or less stabilised but the only solution to onshore thermal oversupply is time. This post below is an accurate representation of Chinese onshore thermal oversupply! 😂🤣 #CoalTwitter

[David Fishman @pretentiouswhat]

In China there are now live streamers selling Shanxi 5500 kcal spot coal at 570-600 yuan/mt.

Some comments on screen say "how do you ship this?" And "how many tonnes for minimum purchase?"

[Wickhams Hill @wickhamshill]

https://t.co/40l6T7uefy

[Wickhams Hill @wickhamshill]

Current run-rate points to Mongolia exporting 46mn tons of Coal to China with a stated goal of 50mn tons for 2023. As of the 6th of June 2023, and despite a slump in May, Mongolia has exported 24mn tons of Coal to China. We think 50mn tons is not a dream and is achievable.

[Wickhams Hill @wickhamshill]

Last prices show Mongolian Raw coal at USD 157/ton - markedly above https://t.co/w5bPf42s4j cost of production. Our numbers and analysis show that #MongolianMiningCorp 's cost of production and transport to the border is much closer to USD 75/ton. #cokingcoal #Mongoliaexports

[Wickhams Hill @wickhamshill]

While mainstream news reports that sentiment is weak, the first week of June saw Ganqimaodu exports stabilise at around 900 trucks per day indicating much better demand for met coal.

[Coal Newswire @CoalNewswire]

Mongolia's #coal exports fell to a 4-mo low of 4mmt in May on decreased Chinese demand. Exports were 23.8% lower MoM but 107.8% higher vs May '22. Negative margins of up to $28.07/t were reported for Mongolian #metcoal imports. Prices for Mongolian raw met declined by RMB100/t.

[Wickhams Hill @wickhamshill]

Moodys placed https://t.co/w5bPf42s4j on watch today citing weak liquidity and an unbridged funding gap. Our numbers and conversations with management however point to the company being net cash by the end of the year and materially ahead of its April 2024 maturity. #coal #HCC

[Wickhams Hill @wickhamshill]

Mongolian Coal throughput across Ganqimaodu rebounded meaningfully in June with average daily trucking numbers coming close to 900/day vs 650/day in May. We're covering a key special situation on Mongolian Mining Corp https://t.co/w5bPf42s4j. https://t.co/uOpiYxMztM

[Wickhams Hill @wickhamshill]

@TaviCosta @Fritz844 What's the underlying data here?

[Wickhams Hill @wickhamshill]

We published a follow-up to our Oct'21 DEEP DIVE on leading Indonesian steel pipe manufacturer PT SPINDO $ISSP.IJ

https://t.co/ldTyqq01PL

[Wickhams Hill @wickhamshill]

The real upside for MMC will come upon completion of the long-overdue Tavan Tolgoi - Gashuun Sukhait railway, which will add USD 129m of incremental EBITDA through both margin and volume gains, for a total estimated FY23 EBITDA of USD 610m.

[Wickhams Hill @wickhamshill]

Mongolian coal exports are sharply increasing as border restrictions ease and Mongolian Mining Corp - MMC (975 HK) is positioned to benefit as they ship more volume into the high-priced Chinese coking coal market.
https://t.co/r6AZWPMa95

[Wickhams Hill @wickhamshill]

MMC will ramp up during 1H22 to reach forecast volumes for FY22 of 3.5m Mtpa (vs. 1.5m Mtpa in FY21) at an avg price of USD 200/mt (well below spot of USD 400+/mt). This will translate to an EBITDA of c. USD 128m 1H22 and c. USD 178m in 2H22 for an implied EV/EBITDA of < 2x.