CRN - CORONADO GLOBAL RESOURCES INC.

[blacksheep]

Have transferred these posts below from IPO thread as it is now trading and will be interesting to follow its progress

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Looks like those initial concerns (below) were justified - CRN shares debuted at $3.80, 5% below the issue price of $4.00, fell as low as $3.66 and are currently trading @ $2.90.

 

Goldman Sachs - one of the joint lead managers in the IPO - recently released a research note and gave a $3.60 12 month target price

 

CLSA put a sell on CRN, along with a target of $2.40

 

Top 20 holders as at 26/10/2018 Composition : CDIs

Rank Name CDI equivalents %

1 CORONADO GROUP LLC 80.0% 773,081,036

2 HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED-GSCO ECA 38,998,824 4.0%

3 HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED 37,156,489 3.8%

4 MORGAN STANLEY AUSTRALIA SECURITIES (NOMINEE) PTY LIMITED <NO 1 ACCOUNT> 20,145,402 2.1%

5 BRISPOT NOMINEES PTY LTD <HOUSE HEAD NOMINEE A/C> 13,930,611 1.4%

6 HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED - A/C 2 11,452,349 1.2%

7 J P MORGAN NOMINEES AUSTRALIA LIMITED 10,630,626 1.1%

8 CITICORP NOMINEES PTY LIMITED 8,278,091 0.9%

9 MERRILL LYNCH (AUSTRALIA) NOMINEES PTY LIMITED 7,401,500 0.8%

10 CS THIRD NOMINEES PTY LIMITED <HSBC CUST NOM AU LTD 13 A/C> 5,372,364 0.6%

11 NATIONAL NOMINEES LIMITED 1,764,581 0.2%

12 BNP PARIBAS NOMINEES PTY LTD <AGENCY LENDING DRP A/C> 1,721,098 0.2%

13 MERRILL LYNCH (AUSTRALIA) NOMINEES PTY LTD <NOM1 A/C> 1,647,082 0.2%

14 CS FOURTH NOMINEES PTY LIMITED <HSBC CUST NOM AU LTD 11 A/C> 1,231,133 0.1%

15 GURRAVEMBI INVESTMENTS PTY LTD 900,000 0.1%

16 TWYNAM AGRICULTURAL GROUP PTY LTD 750,000 0.1%

17 BERNE NO 132 NOMINEES PTY LTD <599694 A/C> 698,962 0.1%

18 UBS NOMINEES PTY LTD 597,709 0.1%

19 MR THOMAS FRITZ ENSMANN 500,000 0.1%

20 GOLDMAN SACHS AUSTRALIA & NOMINEE HOLDINGS PTY LTD <ACCUMULATION ENTREPOT A/C> 451,767 0.0%

Top 20 936,709,624 97.1%

Outside Top 20 29,807,296 2.9%

Total 966,516,920 100.0%

 

IPO Watch ÃÆâ€â„¢ÃƒÆ’ƒâہ¡ÃƒÆ’‚¢ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â€š¬Ã…¡Ãƒâ€šÃ‚¬ÃƒÆ’…¡Ãƒâہ¡ÃƒÆ’‚¬ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â‚¬Å¡Ã‚¬Ãƒâ€¦Ã‚¡ÃƒÆ’‚¬Ãƒâ€Â¦ÃƒÆ’¢Ã¢Ã¢â‚¬Å¡Ã‚¬Ãƒâ€¦Ã¢â‚¬Å“ Coronado Global Resources

HUGH DIVE View the contributor's profile page

Atlas Funds Management

We are generally pretty sceptical about new IPOs (initial public offerings). Occasionally, however, a great IPO comes along, either for a long-term investment or one with a high probability of making a short-term gain on its opening day, so it is always worthwhile to run the ruler over companies about to list on the ASX. In this weekÃÆâ€â„¢ÃƒÆ’ƒâہ¡ÃƒÆ’‚¢ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â€š¬Ã…¡Ãƒâ€šÃ‚¬ÃƒÆ’…¡Ãƒâہ¡ÃƒÆ’‚¬ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â€š¬Ã…¡Ãƒâ€šÃ‚¬ÃƒÆ’…¾Ãƒâہ¡ÃƒÆ’‚¢s piece we are going to look at the seven key questions we ask when assessing an IPO and apply them to Coronado Global Resources (ASX: CRN). CoronadoÃÆâ€â„¢ÃƒÆ’ƒâہ¡ÃƒÆ’‚¢ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â€š¬Ã…¡Ãƒâ€šÃ‚¬ÃƒÆ’…¡Ãƒâہ¡ÃƒÆ’‚¬ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â€š¬Ã…¡Ãƒâ€šÃ‚¬ÃƒÆ’…¾Ãƒâہ¡ÃƒÆ’‚¢s prospectus was one of the largest that I have ever seen ÃÆâ€â„¢ÃƒÆ’ƒâہ¡ÃƒÆ’‚¢ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â€š¬Ã…¡Ãƒâ€šÃ‚¬ÃƒÆ’…¡Ãƒâہ¡ÃƒÆ’‚¬ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â‚¬Å¡Ã‚¬Ãƒâ€¦Ã‚¡ÃƒÆ’‚¬Ãƒâ€Â¦ÃƒÆ’¢Ã¢Ã¢â‚¬Å¡Ã‚¬Ãƒâ€¦Ã¢â‚¬Å“ close to 700 pages ÃÆâ€â„¢ÃƒÆ’ƒâہ¡ÃƒÆ’‚¢ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â€š¬Ã…¡Ãƒâ€šÃ‚¬ÃƒÆ’…¡Ãƒâہ¡ÃƒÆ’‚¬ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â‚¬Å¡Ã‚¬Ãƒâ€¦Ã‚¡ÃƒÆ’‚¬Ãƒâ€Â¦ÃƒÆ’¢Ã¢Ã¢â‚¬Å¡Ã‚¬Ãƒâ€¦Ã¢â‚¬Å“ perhaps reflecting what is likely to be the biggest IPO in 2018 with an expected market capitalisation of between $3-4 billion.

 

Our take

 

Using a conservative coal price of around US$150/t, our modelling indicates that CoronadoÃÆâ€â„¢ÃƒÆ’ƒâہ¡ÃƒÆ’‚¢ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â€š¬Ã…¡Ãƒâ€šÃ‚¬ÃƒÆ’…¡Ãƒâہ¡ÃƒÆ’‚¬ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â€š¬Ã…¡Ãƒâ€šÃ‚¬ÃƒÆ’…¾Ãƒâہ¡ÃƒÆ’‚¢s free cash flow will drop from around $400M today to around $180M, which would place Coronado on a yield of 5%, i.e. solid but unspectacular. Whilst we are comforted by vendor EMG retaining an 80% holding, we are concerned about buying into a recently put together company trading at peak earnings, especially when the previous owners of major assets that make up CoronadoÃÆâ€â„¢ÃƒÆ’ƒâہ¡ÃƒÆ’‚¢ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â€š¬Ã…¡Ãƒâ€šÃ‚¬ÃƒÆ’…¡Ãƒâہ¡ÃƒÆ’‚¬ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â€š¬Ã…¡Ãƒâ€šÃ‚¬ÃƒÆ’…¾Ãƒâہ¡ÃƒÆ’‚¢s portfolio were happy to sell at lower prices. We will be passing up Coronado due to this concern and our inability to predict the metallurgical coal price in the near future. Additionally, with the last line of Ben GrahamÃÆâ€â„¢ÃƒÆ’ƒâہ¡ÃƒÆ’‚¢ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â€š¬Ã…¡Ãƒâ€šÃ‚¬ÃƒÆ’…¡Ãƒâہ¡ÃƒÆ’‚¬ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â€š¬Ã…¡Ãƒâ€šÃ‚¬ÃƒÆ’…¾Ãƒâہ¡ÃƒÆ’‚¢s quote from above on IPOÃÆâ€â„¢ÃƒÆ’ƒâہ¡ÃƒÆ’‚¢ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â€š¬Ã…¡Ãƒâ€šÃ‚¬ÃƒÆ’…¡Ãƒâہ¡ÃƒÆ’‚¬ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â€š¬Ã…¡Ãƒâ€šÃ‚¬ÃƒÆ’…¾Ãƒâہ¡ÃƒÆ’‚¢s in mind, given the movement in the coal price over the past few years, it is hard not to take the view that October 2018 may represent a very favourable time for CoronadoÃÆâ€â„¢ÃƒÆ’ƒâہ¡ÃƒÆ’‚¢ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â€š¬Ã…¡Ãƒâ€šÃ‚¬ÃƒÆ’…¡Ãƒâہ¡ÃƒÆ’‚¬ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â€š¬Ã…¡Ãƒâ€šÃ‚¬ÃƒÆ’…¾Ãƒâہ¡ÃƒÆ’‚¢s owners to be selling shares to Australian investors.

 

read more - https://www.livewiremarkets.com/wires/ipo-w...lobal-resources

[Marana]

Reported a big profit today with big dividend and big capital return.

[blacksheep]

Took my eye off this one. Well done

 

[Marana]

Market is selling it off, despite at $3.50:

 

* Annualised PE ratio of 5.4

 

* Annualised dividend yield of 13.4% before tax (US$0.112 cents fully franked)

 

* Capital return of AUS$0.44 cents

 

Company has forecast US$327M EBITDA for 2nd half due to softer coal prices compared to US$405M last half.

 

Some escrow shares are being early released prior to ex-dividend but the impression is they are looking for insto buyer

[Marana]

Last annual report says:

 

We expect to further demonstrate this in the

future by delivering on our commitment to pay

out 100% of free cash flow for the period to

31 December 2019.

 

Today's report forecast US$326.6M EBITDA for the 2nd half, which is US$158M NPAT or, at 68 cents exchange rate, AUD$0.24 EPS.

 

At current $3.20 share price, the annualised PE ratio for next half is 6.7.

[blacksheep]

Some interesting points made in this AFR article today - something to keep an eye on

 

âââہ¡Ãƒâ€šÃ‚¬ÃƒÆ’…âہ“When youâââہ¡Ãƒâ€šÃ‚¬ÃƒÆ’¢Ã¢Ã¢â€š¬Ã…¾Ãƒâ€šÃ‚¢re facing a potential downturn in the metallurgical coal market, as we currently may be, then it becomes even more apparent.âââہ¡Ãƒâ€šÃ‚¬ÃƒÆ’‚ÂÂ

 

It comes as Coronado unveiled a bumper profit, warned of short-term bumps from the China-US trade war and flagged a potential early selldown of some stock by a major investor.

 

The accounts stated that overall costs improved, but it was mixed across each of Coronadoâââہ¡Ãƒâ€šÃ‚¬ÃƒÆ’¢Ã¢Ã¢â€š¬Ã…¾Ãƒâ€šÃ‚¢s mines. The also revealed that Coronado faces a potential $2.3 million a year hit if an appeal against a Queensland Supreme Court judgment launched by rail operator Aurizon fails

 

However, he was also keeping his eyes on Europe and the US-China trade wars. About 10 per cent of Coronadoâââہ¡Ãƒâ€šÃ‚¬ÃƒÆ’¢Ã¢Ã¢â€š¬Ã…¾Ãƒâ€šÃ‚¢s coal goes from Virginia to China and has already been hit with a tariff.

 

âââہ¡Ãƒâ€šÃ‚¬ÃƒÆ’…âہ“The trade wars and tariffs will have some impact, depending on how it goes,âââہ¡Ãƒâ€šÃ‚¬ÃƒÆ’‚ Mr Spindler said.

 

https://www.afr.com/companies/mining/corona...20190805-p52e0p