TNGRF - Thungela: Underwhelming Winter Capture And Lurking Headwinds (Ratings Downgrade)

2024-03-29 03:36:46 ET

Summary

• Thungela Resources Limited's year-over-year revenue slumped due to a softer pricing environment and an underwhelming export market.
• The company expects South African saleable production to settle between 11.5 and 12.5 million tonnes. However, FOB costs are on the rise.
• We think supply-side pressures induced by railway problems and a volatile election year pose underestimated risks. Moreover, we expect little change in demand-side factors.
• Thungela's valuation and dividend metrics are scintillating, but beware - this probably isn't a "through-the-cycle" stock.
• We Downgrade TNGRF Stock to Hold.

Thungela Resources Limited ( TNGRF ) is a South African coal mining company with an alternative listing in the United States. We've covered the stock extensively over the past few years, delivering opinions on its prospects throughout the economic cycle. ...

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