finnCap Research Company Notes - 14 May 2018

May 14, 2018 / Research Notes

Daily research notes on finnCap's clients from a leading research desk.

Sector: Oil & Gas

President Energy (PPC): Argentina back in the spotlight

Key data                              

  • Share price (p): 10.2
  • Target price (p): 18.0
  • Market cap (£m): 110.2
  • Enterprise value (£m): 114.7

Last month, President announced an intention to increase and accelerate its work programme on its Neuquen basin fields in Argentina. Today’s update provides clarity on the intended work programme plus sees a further acceleration of the expected pace of activity. Oil prices are at their highest level since late-2014, allowing President to fund this work programme from internal resources, delivering a rapid payback on investment. However, Argentine macro events have dominated the headlines and overshadowed the improving fundamentals.

Jonathan Wright | jwright@finncap.com

finnCap is a leading broker and financial advisor to public and private energy and oil and gas sector companies, find out more about how we can help tell your investment story.

Sector:  Mining

Savannah Resources (SAV): More permits received for Oman copper project    

Key data                              

  • Share price (p): 6.5
  • Target price (p): 11.0
  • Market cap (£m): 45.4
  • Enterprise value (£m): 43.7                         

Savannah Resources has announced that approvals have been received for all eight of the required Government permitting approvals for the Maqail South and Mahab 4 Mining Licence applications. The permitting process has now moved on to discussions with the Public Authority of Mining, which is the body that actually issues the mining licences. Savannah is a 65% shareholder in the Omani company Al Fairuz Mining, the holder of the Block 5 licence that includes these two high-grade copper deposits. We retain our 11p price target.

Martin Potts | mpotts@finncap.com

finnCap is a leading broker and financial advisor to public and private mining sector companies, find out more about how we can help tell your investment story.

Sector: Industrials

Hardide (HDD): Strong 1H results – positioned for further growth            

Key data                              

  • Share price (p): 1.8
  • Target price (p): 2.0
  • Market cap (£m): 30.8
  • Enterprise value (£m): 29.6

Interim results show strong progress in the oil & gas sector and flow control sectors from both new customers as well as underlying volume growth from existing customers, reflecting stronger conditions in the oil & gas market. Aerospace trials continue to make good progress, albeit at a slow pace. The facility in Martinsville, Virginia, is operating well, with more production being transferred there and further new capacity expected to come on-stream by the end of the year. Market conditions remain favourable, and growth from new customers is expected. As such, the group is on track to achieve existing forecasts and is now getting close to EBITDA breakeven.

David Buxton | dbuxton@finncap.com

finnCap is a leading broker and financial advisor to public and private industrial sector companies, find out more about how we can help tell your investment story.