澳大利亚-材料行业-商品追 踪：MIN具有价值，WHC有增长潜力

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1、June28,201808:13PMGMT20AustraliaMaterialsCommodityCatchup:MINhasValue,WHC-GrowthPotential,butreturnsnowfavourstockMORGANSTANLEYAUSTRALIALIMITED+RahulAnand,CFAEQUITYANALYSTR.Anand@morganstanley.com+6129770-1136MeganJKirby-LewisRESEARCHASSOCIATEMegan.Kirby-Lewis@morganstanley.com+6129770-1

2、390AustraliaMaterialsAsiaPacific20pickers(movetoInLine)Thecommoditydeckhasdrivenupgradesformetalsandbulks,whileearningsforthelithiumplayersfall.WefindgrowthatareasonablepriceinMIN,whileWHCprovidesvaluationcrystallizationpotential.However,ourmarketcapweighteddownsideof6%drivesourmovetoanIn

3、Lineindustryview.IndustryViewWHAT'SCHANGED?FROM:TO:AustraliaMaterialsIndustryViewAttractiveIn-LineExhibit1:KeychangesIn-Line2020MINstaysontop:Valuationsupport(+31%upside)andupcomingcatalystskeepMINatthetopofourlist.Wethinkthemarketwouldreactfavorablyto:1)thelithiumhydroxideprojectprogre

4、ssingaswevaluethe56ktpaprojectatA$3.58/shinourbullcase(studydueQ3CY18);2)saleofthe49%stakeinWodginaasplannedbythecompanywhichweestimatewouldprovide~A$1bntoMINandandde-risktheproject,whichshouldbeviewedfavorablybyinvestors(expectedCY18).WHCupsideremains:WecontinuetoseevaluationsupportforWH

5、C.Ourpricetargetincreases14%toA$6.50/sh(+15%upside)asweseemorepotentialforthebullcasescenariotoplayout.WecontinuetoseetheVickery10mtpaprojectsubmissionandapprovalasapositivestockcatalyst,whichweestimatecouldprovideA$0.73/shupsidetoourbasecase.Ourcoalpriceforecastsremainbelowspot,withWHCge

6、neratingstrongFCFonbothbaseandspotcommodityprices(FY19FCFyield16%onbaseand21%onspotvsFY15-FY17averageof~2%).IndustryviewmovestoInLine(fromAttractive):Acrossourcoverage,EBITDAandEPSfor2018/19ehaveseenupgradesonthebackoftherevisedcommoditydeck,whileourvaluationshaveincreased1%onaverage.Howe

7、ver,wefindthatthemarketnowlargelyappreciatesthestrongFCFgenerationacrosstheminers(FCFyieldavg.8%onBase,9%onspot)andisreflectingthesameinvaluations,whichhastranslatedtoamarketcapweighteddownsideof6%acrossourcoverageuniverse,forcingourhandtomovetoanInLineindustryview,