Orocobre Ltd

ORE Details
Sluggish Production in 1Q FY17 but upbeat on Lithium projects Partnerships: Orocobre Ltd (ASX: ORE) reported for solid 1Q FY17 sales volumes of 3,593t which were, however, impacted by production for the quarter of 3,013t, i.e., bottom of ORE’s reduced guidance 3,000–3,200t provided at the FY16 result. The 2Q FY17 forecast of 3.5–4k tonnes has been provided. The forecast prices of about US$10,000/t for 1Q FY17 have been below expectations. The management attributed 1Q’s costs are also high owing to a ten-day mechanical outage in the drying circuit in August 2016. On the other hand, the group is expected to fund its loan repayments for the Olaroz project without any further capital injections. The group has partnered with Advantage Lithium on lithium brine exploration projects. ORE  is set to divest a number of lithium brine exploration projects to Advantage Lithium and under the terms of a Letter of Intent (LOI) executed by the parties, Advantage Lithium has been said to issue to Orocobre 40,622,200 common shares valued at approximately US$37 million. The stock rose 15.7% in five days as at November 25, 2016, and now trades at high levels. We believe the stock is ‘Expensive’ at the current price of $ 4.43

 
ORE Daily Chart (Source: Thomson Reuters) 

a2 Milk Company Ltd

A2M Details
Strong Updates: a2 Milk Company Ltd (ASX: A2M) stock was up 15.7% in five days as at November 25, 2016, and reported for a strong trading update with 96% growth in sales for the first four months of FY17 of NZD155.2m over prior corresponding period. a2 Platinum witnessed an increased online share indicating continued strong growth in China. The group also reported for strong EBITDA margins of 22.9%. For FY16, the group had reported 127.4% growth in revenue.
 

FY17 Four months’ Update (Source: Company Reports)
 
On the other hand, the upcoming regulatory changes in China (January 2018) need to be monitored although any adverse impact is unlikely. We give a ‘Hold’ recommendation on the stock at the current price of $ 2.24

 
A2M Daily Chart (Source: Thomson Reuters) 

Galaxy Resources Ltd

GXY Details
Ore commissioning at Mt Cattlin plant: Galaxy Resources Ltd (ASX: GXY) reported about commencement of its ore commissioning at the Mt Cattlin plant with the first spodumene concentrate production achieved. The group has identified and rectified the bottlenecks. The production was ahead of the latest project timetable the group announced in September 2016. Trucking of concentrate is set to start in upcoming weeks to Esperance Port. First product shipment is said to be on track for December.
 

First Lithium Concentrate Production from Mt Cattlin (Source: Company Reports)
 
The group has now awarded the mining contract to Piacentini & Son Pty Ltd, which will provide excavators, dump trucks and other required equipment for Mt Cattlin. The stock has surged 14.9% in five days as at November 25, 2016. We give a ‘Buy’ recommendation on the stock at the current price of $ 0.41

 
GXY Daily Chart (Source: Thomson Reuters) 

Whitehaven Coal Ltd

WHC Details
Trading at high levels: Whitehaven Coal Ltd (ASX: WHC) reported for a modest quarterly update for September 2016. The production entailed managed ROM Coal up 41% and managed saleable coal up 20% over September 2015, while there were impacts from wet weather.  WHC now expects met coal fraction at Maules Creek to reach 30% of production in the December quarter. The group recorded a profit of $20.5 million for FY16 while operating EBITDA rose 72%. There is a likelihood that the group resumes dividend payment next year given the net cash position going forward.
 

Production and Sales Highlights (Source: Company Reports)
 
The coal market tightening is also influencing the stock while it surged 5.9% in five days ending at November 25, 2016 and is now trading at high levels with high P/E. We believe that the stock is ‘Expensive’ at the current price of $ 2.84

 
WHC Daily Chart (Source: Thomson Reuters) 

Monadelphous Group Ltd

MND Details
Weak performance in FY16: Monadelphous Group Ltd (ASX: MND) rose 7.88% in five days ending at November 25, 2016 and is now trading close to its 52-week high price. The group had reported 26.8% loss in FY16 sales revenue of $1.36 billion while NPAT slipped by 36.7% to $67.0 million. FY16 EPS also dropped by 37%.
 

Contracts (Source: Company Reports)
 
On the other hand, the group reported for new contracts and contract extensions worth $1.1 billion, while there have been three new long-term oil and gas contracts. The group had otherwise faced challenges owing to lower demand for construction work along with delays to some existing project work. We believe that the stock is ‘Expensive’ at the current price of $ 11.49

 
MND Daily Chart (Source: Thomson Reuters)

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