Aurizon Holdings Ltd (AZJ):
Aurizon and Pacific National are still haggling with the ACCC over the planned Acacia Ridge purchase with the date for the decision extended from February 1 to mid February. The ACCC said the delay was to give the parties time to furnish more information. Under the deal Aurizon (AZJ) will close its inter modal rail business with the Queensland portion going to Lin Fox and Pacific National buying the key Acacia Ridge rail terminal outside Brisbane, while the interstate intermodal (container) business will be closed. The ACCC has investigated the deal over the last five months over concerns at the $220 million sale price for the two businesses. It is also examining the circumstances around Aurizon closing its loss making inter modal business which handed more market share to Pacific National.
Flight Centre Travel Group Ltd (FLT):
UBS analysts have taken a closer look at Flight Centre's near- and long-term earnings prospects and like what they see, triggering an upgrade on the stock to "buy" from "neutral". They see "material upside" for the shares, based on an "undemanding valuation". "On a medium-term view, we believe Flight Centre is well placed to outperform," the write, pointing to their estimates for around 8 per cent compound annual growth in earnings out to 2021 – with those earnings in an upgrade cycle. The stock's valuation is "attractive" at around 16 times expected earnings for this financial year, with the chance for even better performance should Flight Centre hit its targets. The shares are up a robust 4.6 per cent at $2.16.
Integral Diagnostics (IDX):
Takeover target Integral Diagnostics has warned shareholders to take no action as the group waits for an amended bidder's statement from smaller rival, Capitol Health, while revealing it has made progress during first half of the year. The company received an unsolicited $356 million hostile bid in late November, valuing the company at $2.46 per share. On Friday, the diagnostic imaging company said revenue was up 5.7 per cent to $93.6 million in the six months ended December 31, while reported net profit was down 4.7 per cent to $8.3 million. After adjusting for transaction and take over response costs, underlying NPAT was up 22.7 per cent to $9.2 million. The first-half underlying results are a material improvement in operating margin and across all financial performance metrics. Integral earlier in January announced a major upgrade to full year normalised net profit guidance, tipping 20 per cent growth. Previous guidance was for "high single-digit growth". Ord Minnett estimated growth of 12 per cent. The upgrade has been driven by accelerating growth in referrals, particularly in WA, and successful implementation of the cost-cutting program, and a reduction of effective tax rate. New CEO Ian Kadish said he was pleased with the first-half results as he delivered on his strategy. The stock is up 1.3 per cent at $2.31.
Rio Tinto Limited (RIO):
Rio Tinto has hit more turbulence in Mongolia, with blockades near the Chinese border stopping Rio's Oyu Tolgoi mine from delivering copper to customers. The disruption, caused by protests on the Chinese side of the border, come barely 48 hours after it was revealed that Mongolia had sought $US155 million of allegedly unpaid taxes from Oyu Tolgoi. The Rio subsidiary that operates Oyu Tolgoi, Turquoise Hill Resources, said the protests had been underway for 10 days and had forced the company to declare force majeure on its copper shipments to Chinese customers. It is not the first time tensions on the border between Mongolia and China have caused problems for Oyu Tolgoi. In December 2016 the Chinese province of Inner Mongolia, which shares a border with the nation of Mongolia, imposed new tariffs on Mongolian goods entering China. That incident caused copper shipments from Oyu Tolgoi to be temporarily interrupted. Turquoise Hill owns 66 per cent of Oyu Tolgoi, with the Mongolian government owing the balance. Rio owns 50.79 per cent of Turquoise Hill, and an expansion of Oyu Tolgoi ranks as arguably Rio's most important growth project worldwide.
Senex Energy Ltd (SXY):
Senex Energy is set to kick off discussions with potential gas customers within weeks as it fast-tracks its $200 million-plus Atlas gas project in Queensland with the backing of its US private equity shareholder EIG Global Energy Partners. Senex won the fiercely contested tender with a commitment to spend more than $200 million in developing the gas resources near Miles, with the aim of starting production in 2019. Under the terms of the auction, the gas must be sold into the east coast market, rather than exported as LNG. At the same time, the company is developing its Western Surat project which is supplying gas to Santos's GLNG venture in Gladstone. In a quarterly report released today, Senex said it expects to secure a petroleum lease for Project Atlas in mid-2018 and is carrying out work on planning, land access, cultural heritage agreements and environmental impact assessments in preparation. It submitted the environmental authority application for the project, which involves about 100 wells to achieve production of more than 30 terajoules a day, to the Queensland government in the December 2017 quarter.
Sydney Airport Holdings Pty Ltd (SYD):
A lift in the number of Chinese travellers passing through Sydney Airport last year has prompted two Chinese airlines to increase the frequency of their flights to Sydney. The number of Chinese nationals travelling through Sydney Airport leapt 17.3 per cent in 2017, after jumping 17.6 per cent the prior year. Tianjin Airlines, operating out of Tianjin near Beijing, will begin servicing its Tianjin-Zhengzhou-Sydney route all year round from January 30. Meanwhile, Hainan Airlines, which operates out of Hainan in China’s south, will run its Haikou-Sydney route twice weekly year round from the end of January. “Sydney Airport now serves 17 mainland Chinese cities which represent almost 90 per cent of all travel on the China-Sydney route,” the airport’s chief executive Geoff Culbert said. Across its three terminals, 43.3 million passengers passed through Sydney Airport (SYD) in 2017, up 3.6 per cent compared to the previous year. Traffic at the international airport grew 7.2 per cent, while domestic traffic rose 1.6 per cent, compared with the previous year.
(Source: AIMS)
Aurizon and Pacific National are still haggling with the ACCC over the planned Acacia Ridge purchase with the date for the decision extended from February 1 to mid February. The ACCC said the delay was to give the parties time to furnish more information. Under the deal Aurizon (AZJ) will close its inter modal rail business with the Queensland portion going to Lin Fox and Pacific National buying the key Acacia Ridge rail terminal outside Brisbane, while the interstate intermodal (container) business will be closed. The ACCC has investigated the deal over the last five months over concerns at the $220 million sale price for the two businesses. It is also examining the circumstances around Aurizon closing its loss making inter modal business which handed more market share to Pacific National.
Flight Centre Travel Group Ltd (FLT):
UBS analysts have taken a closer look at Flight Centre's near- and long-term earnings prospects and like what they see, triggering an upgrade on the stock to "buy" from "neutral". They see "material upside" for the shares, based on an "undemanding valuation". "On a medium-term view, we believe Flight Centre is well placed to outperform," the write, pointing to their estimates for around 8 per cent compound annual growth in earnings out to 2021 – with those earnings in an upgrade cycle. The stock's valuation is "attractive" at around 16 times expected earnings for this financial year, with the chance for even better performance should Flight Centre hit its targets. The shares are up a robust 4.6 per cent at $2.16.
Integral Diagnostics (IDX):
Takeover target Integral Diagnostics has warned shareholders to take no action as the group waits for an amended bidder's statement from smaller rival, Capitol Health, while revealing it has made progress during first half of the year. The company received an unsolicited $356 million hostile bid in late November, valuing the company at $2.46 per share. On Friday, the diagnostic imaging company said revenue was up 5.7 per cent to $93.6 million in the six months ended December 31, while reported net profit was down 4.7 per cent to $8.3 million. After adjusting for transaction and take over response costs, underlying NPAT was up 22.7 per cent to $9.2 million. The first-half underlying results are a material improvement in operating margin and across all financial performance metrics. Integral earlier in January announced a major upgrade to full year normalised net profit guidance, tipping 20 per cent growth. Previous guidance was for "high single-digit growth". Ord Minnett estimated growth of 12 per cent. The upgrade has been driven by accelerating growth in referrals, particularly in WA, and successful implementation of the cost-cutting program, and a reduction of effective tax rate. New CEO Ian Kadish said he was pleased with the first-half results as he delivered on his strategy. The stock is up 1.3 per cent at $2.31.
Rio Tinto Limited (RIO):
Rio Tinto has hit more turbulence in Mongolia, with blockades near the Chinese border stopping Rio's Oyu Tolgoi mine from delivering copper to customers. The disruption, caused by protests on the Chinese side of the border, come barely 48 hours after it was revealed that Mongolia had sought $US155 million of allegedly unpaid taxes from Oyu Tolgoi. The Rio subsidiary that operates Oyu Tolgoi, Turquoise Hill Resources, said the protests had been underway for 10 days and had forced the company to declare force majeure on its copper shipments to Chinese customers. It is not the first time tensions on the border between Mongolia and China have caused problems for Oyu Tolgoi. In December 2016 the Chinese province of Inner Mongolia, which shares a border with the nation of Mongolia, imposed new tariffs on Mongolian goods entering China. That incident caused copper shipments from Oyu Tolgoi to be temporarily interrupted. Turquoise Hill owns 66 per cent of Oyu Tolgoi, with the Mongolian government owing the balance. Rio owns 50.79 per cent of Turquoise Hill, and an expansion of Oyu Tolgoi ranks as arguably Rio's most important growth project worldwide.
Senex Energy Ltd (SXY):
Senex Energy is set to kick off discussions with potential gas customers within weeks as it fast-tracks its $200 million-plus Atlas gas project in Queensland with the backing of its US private equity shareholder EIG Global Energy Partners. Senex won the fiercely contested tender with a commitment to spend more than $200 million in developing the gas resources near Miles, with the aim of starting production in 2019. Under the terms of the auction, the gas must be sold into the east coast market, rather than exported as LNG. At the same time, the company is developing its Western Surat project which is supplying gas to Santos's GLNG venture in Gladstone. In a quarterly report released today, Senex said it expects to secure a petroleum lease for Project Atlas in mid-2018 and is carrying out work on planning, land access, cultural heritage agreements and environmental impact assessments in preparation. It submitted the environmental authority application for the project, which involves about 100 wells to achieve production of more than 30 terajoules a day, to the Queensland government in the December 2017 quarter.
Sydney Airport Holdings Pty Ltd (SYD):
A lift in the number of Chinese travellers passing through Sydney Airport last year has prompted two Chinese airlines to increase the frequency of their flights to Sydney. The number of Chinese nationals travelling through Sydney Airport leapt 17.3 per cent in 2017, after jumping 17.6 per cent the prior year. Tianjin Airlines, operating out of Tianjin near Beijing, will begin servicing its Tianjin-Zhengzhou-Sydney route all year round from January 30. Meanwhile, Hainan Airlines, which operates out of Hainan in China’s south, will run its Haikou-Sydney route twice weekly year round from the end of January. “Sydney Airport now serves 17 mainland Chinese cities which represent almost 90 per cent of all travel on the China-Sydney route,” the airport’s chief executive Geoff Culbert said. Across its three terminals, 43.3 million passengers passed through Sydney Airport (SYD) in 2017, up 3.6 per cent compared to the previous year. Traffic at the international airport grew 7.2 per cent, while domestic traffic rose 1.6 per cent, compared with the previous year.
(Source: AIMS)
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