Even in spite of the upgraded guidance, we are of the view there is further upside for the stock following its 1H17 result. It looks cheap against its peers, especially taking into account its operational excellence, higher realised prices and margins, and ability to monetise its Mount Marion stake; Wodgina will also start shipping DSO from as early as 4QFY17. Overnight, MIN announced Mount Marion has better than expected grades, and have fixed a price of US$750 per dry metric tonne for 6% Li2O shipments before 30 June end. Subsequent shipments will be at market with an undisclosed price floor. There’s also the potential for an income step up, as the company moves back towards a historical payout of 50%, with the dividend typically weighted towards the second half. Despite the recent price run, we think there is still scope for further upside, Buy PT $15.08.
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