Orocobre Ltd

ORE Details 
· Positive scoping studies at Olaroz Lithium Facility: Orocobre Ltd (ASX: ORE) made an outstanding rally of over 9.14% on December 16, 2016 driven by the positive scoping studies from their Olaroz Lithium Facility in Argentina. The group reported that they would be enhancing their Lithium carbonate equivalent production from 17,500 tonnes per annum (tpa) capacity to 35,000 tpa with commissioning targeted for late 2018/early 2019.  Orocobre reported that they would incur further capital expenditure of US$190 million (including a US$25 million contingency) for this 17,500 tpa of lithium carbonate capacity. Orocobre intends to finance this via a combination of project finance and Stage 1 operating cashflows. Meanwhile, Orocobre is investigating the construction of a 10,000 tpa battery grade lithium hydroxide plant in Japan.

· Recommendation: ORE stock lost about 17.05% in the last six months (as on December 15, 2016). Rising competition among lithium players remains a concern to the stock. We maintain our “Expensive” recommendation on the stock at the current price of – $ 4.30

Orora Ltd

ORA Details 
· Acquiring The Register Print Group: Orora Ltd (ASX: ORA) stock rallied about 5.7%on December 16, 2016 driven by their acquisition announcement for The Register Print Group while the transaction is expected to be completed by January 2017. ORA acquired the group for US$44.0 million (which is over A$59 million) and this represents a multiple of 5.8 times last 12 months EBITDA. The group is also reimbursing the vendors for recent growth capital investments totaling US$3.0 million. With this acquisition, the group would leverage The Register Print Group’s strong customer relationships across major consumer and technology sectors (including telecoms, retail, beverage and cosmetics). This move is a part of the group’s growth strategy in the North American POP segment wherein the group could further penetrate the North East. The group forecasts acquisition synergies of more than US$1.5 million by the first 2-3 years while enhance purchasing and integration of back office services.

· Recommendation: Orora stockis currently trading at a higher valuation despite the fall of about 5.4% in the last three months (as of December 15, 2016). We maintain our “Expensive” recommendation on the stock at the current price of - $ 2.95


The Register Print Group portfolio (Source: Company Reports)

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