CSL Limited

CSL Details

Lifted Profit Guidance for FY18: CSL Limited’s (ASX: CSL) stock price climbed up 4.13 per cent on May 18, 2018 after providing the market with an upgrade to its profit guidance for FY18. According to the release, the company expects net profit after tax for FY18 to be in the range of around $1,680 Mn to $1,710 Mn USD at constant currency. This is up from its previous guidance in the range of around $1,550 Mn to $1,600 Mn at constant currency, marking uplift of between 6.9% and 8.4%. Further, the management reported an improved positive outlook for the full year at the back of high demand of its product mix portfolio, particularly immunoglobulin products such as Idelvion and Haegarda across the global market. Furthermore, Seqirus is also performing well, following a severe northern hemisphere influenza season. The phasing of investments in some of its clinical trials has also yielded a positive financial variance.


Global Footprint (Source: Company Reports)

On the other hand, the Group has appointed Ms. Fiona Mead to the Board as Company Secretary and Head of Group Governance, effective from June 04, 2018. The Company disclosed to ASX that one of its director Megan Clark had a direct interest in the Company and acquired 290 ordinary shares via on-market acquisition. Meanwhile, the share price climbed up by 32.45 per cent in last one year and the stock is currently trading near its 52-week high. Hence, we maintain our “Expensive” recommendation at the current market price of $ 182.95, considering regulatory risks, intense competition and foreign exchange risk.
 

CSL Daily Chart (Source: Thomson Reuters)
 

Australia and New Zealand Banking Group Limited

ANZ Details

Agreed to dispose its 55% stake in Cambodian JV ANZ Royal Bank: Australia and New Zealand Banking Group Limited (ASX: ANZ) has agreed to sell its 55% stake in Cambodian JV ANZ Royal Bank to Japan’s J Trust which is equivalent to around $30 Mn loss. The transaction has been approved by the Royal Group but remains subject to final regulatory approval from the National Bank of Cambodia and the Ministry of Commerce. The objective of the following divestiture is to simplify the business and operate wholly-owned Institutional businesses in the region. Further, the management stated that they remain committed to their institutional presence in Asia. Its regional network is an important differentiator for ANZ and key to its ambition is to be the best bank to support companies with trade and capital flows throughout the region. Recently, the group also sold its stakes in Metrobank Card Corporation in the Philippines and Shanghai Rural Commercial Bank in China.


Intuitional Divisional Performance (Source: Company Reports)

On the other hand, the company intends to neutralize the impact of shares provided under the Dividend Reinvestment Plan (DRP) in relation to the 2018 Interim Dividend. On the following development, Merrill Lynch Equities (Australia) Limited has been appointed to execute the on-market share purchase or through its related bodies corporate. Further, the Group expects the share value of approximately $200 million for purchase via on-market trade to satisfy the obligations under the DRP. The DRP pricing period began from 18 May 2018 and will be finished on 31 May 2018 (inclusive). During the period, the Group does not intend to purchase shares in relation to the current $1.5 billion buybacks. ANZ stock has risen about 4.91 per cent in past one month. We maintain our “Buy” recommendation on the stock at the current market price of $ 28.17 based on long-term potential while it is divesting non-core assets, re-shaping workforce, maintaining a healthy diversified product portfolio and financial positionof the company.


ANZ Daily Chart (Source: Thomson Reuters)
 

Rio Tinto Limited

RIO Details

Approval for AutoHaul Project by Rail Regulator: Rio Tinto Limited (ASX: RIO) has been granted approval by Australia’s Office of the National Rail Safety Regulator to an autonomous operation of trains at the group’s iron ore business in Western Australia. The AutoHaul project continues to progress and is on schedule to be completed by the end of this year. The Group will take a phased approach to deploying autonomous trains across the network in the lead up to full commissioning. The objective of the Automotive project is automating the trains that are essential to transporting the iron ore to the group’s port facilities. At the end of the first quarter of 2018, approximately 65 per cent of all train kilometers were completed autonomously, up from 60 percent as reported earlier this year. The Group operates around 200 locomotives on more than 1,700 kilometers of track in the Pilbara, transporting ore from 16 mines to four port terminals. Further, the group’s Pilbara shipments guidance for 2018 remains between 330 and 340 Mn tonnes on a 100 per cent basis. This is subject to market conditions and any weather constraints. Once fully operationalised, AutoHaul Project will provide significant opportunity in terms of safety and productivity in the form of reduced variability and increased speed across the network which will help to reduce average cycle times.


AutoHaul Project (Source: Company Reports)

As part of its dual listed company structure, Rio Tinto voluntarily notified the Australian Securities Exchange (ASX) of material dealings in Rio Tinto plc shares by discharging managerial responsibility (PDMR) / Key Management Personnel (KMP) and both the ASX and the LSE of material dealings by PDMR/KMP in Rio Tinto Limited securities. With this, the qualifying UK employees are able to purchase the ordinary share of 10p each share under share incentive plan on a quarterly basis which will help to drive long-term engagement with its employee share scheme. On the other hand, the Group has appointed Moya Greene to the Board as an independent non-executive director, effective from September 17, 2018.  In last one year, the stock price climbed up by 40.78 per cent and was up by 11.09 per cent in last one month. As of now, the stock looks “Expensive” at the current market price of $ 85.810, as it trades at its near to 52-week high level.
 

RIO Daily Chart (Source: Thomson Reuters)
 

Origin Energy Limited

ORG Details

FY18 Guidance Unchanged: Origin Energy Ltd (ASX: ORG) is emerging as a resilient energy player as it proceeds ahead with its strategy to bring a step change reduction in upstream costs at APLNG. Further, the group is poised for leveraging from its growing renewable position given strong gas supply portfolio and Australia’s largest fleet of peaking gas-fired power stations. The group has unchanged its full-year 2018 underlying EBITDA guidance for its energy markets business to be in the range of $1.78 Bn to $1.85 Bn, if market conditions and the regulatory environment do not materially change. In addition to this, Origin’s share of APLNG production is expected to be in the range of 245–265 PJ for full year.


Debt/EBITDA and Disciplined capital management (Source: Company Reports)

Further, the group expects capital expenditure for full year in the range of $360 Mn to $420 Mn with adjusted Net Debt below $7 Bn. Meanwhile, the share price was up by 26.68 per cent in the last one year (as at May 17, 2018) with a 3.272 per cent rise on May 18, 2018, and the stock currently trades close to its 52-week high levels. Hence, we maintain our “Hold” recommendation at the current market price of $ 10.100.
 

ORG Daily Chart (Source: Thomson Reuters)

 
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