• Positive outlook:Whitehaven Coal Ltd(ASX: WHC) stock fell over 9.1% on September 23, 2016, which might be owing to some profit booking as the stock surged over 154.9% in just last three months alone. The solid rally in the stock was driven by the coal prices coupled with the group’s increasing production. Being a highest quality coal producer, the group’s production from Maules Creek since July 2015, would enable their growth for the next three years. WHC controlled their net debt by 23% year on year (yoy) to $859.1 million for FY16 while unit costs fell to average $56/t for the year. WHC enhanced their sales by 42% on a yoy basis. We believe that there is more upside in the stock despite short term pressure. The group’s positive outlook would contribute to the stock rise wherein Maules Creek would continue to ramp up its production level to an annualised rate of 10.5Mt ROM coal in the second half of FY17 and is forecasted to produce 9.0Mt of saleable coal for the financial year. Mining is expected to shift to the first 400-metre wide panel during the fourth quarter of FY2017. The smaller open cut mines would produce a similar amount of coal as FY16 even for FY17.
• Recommendation: We give a “Hold” recommendation on the stock at the current price of $2.40

• Block sale of the group’s shares by Gandel Group: Charter Hall Group(ASX: CHC) stock fell about 6% on September 23, 2016 after the trading halt on the stock was lifted. Charter Hall Group made an agreement to acquire a 50% interest in Wesfarmers’ subsidiary Coles, the Melbourne office headquarters having a 15-year lease expiring in 2030. The overall purchase price is $140.5 million while the rest of the interest in the property is owned by a private group. On the other hand, long term investor in CHC, the Gandel group recently announced about completion of the sale of their 19.18% stake in CHC, raising concerns of a limited upside in the stock. This may have also led to profit booking in the stock.
• Recommendation: We give an “Expensive” recommendation on CHC at the current price of $5.06

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