{"id":319909,"date":"2023-01-02T12:10:00","date_gmt":"2023-01-02T04:10:00","guid":{"rendered":"https:\/\/www.pinoyinvestor.com\/smartinvestor\/?p=319909"},"modified":"2023-01-02T21:29:37","modified_gmt":"2023-01-02T13:29:37","slug":"stock-in-focus-apex-mining-co-inc-apx-2-jan-2023-by-ab-capital-securities","status":"publish","type":"post","link":"https:\/\/www.pinoyinvestor.com\/smartinvestor\/stock-in-focus-apex-mining-co-inc-apx-2-jan-2023-by-ab-capital-securities\/","title":{"rendered":"Stock in Focus: Apex Mining Co. Inc. (APX) – 2 Jan 2023 by AB Capital Securities"},"content":{"rendered":"\n

Summary of Broker’s Recommendation<\/h2>\n\n\n\n
Stock Code<\/strong><\/td>APX<\/td><\/tr>
Company Name<\/strong><\/td>Apex Mining Co. Inc.<\/td><\/tr>
Broker<\/strong><\/td>AB Capital Securities<\/td><\/tr>
Opinion Issued on<\/strong><\/td>2 Jan 2023<\/td><\/tr>
Recommendation<\/strong><\/td>Buy<\/td><\/tr>
1-Year Target Price<\/strong><\/td>PHP 2.68<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n

We initiate coverage on Apex Mining Co. (APX) with a BUY recommendation and a 12-month price target of P2.68. This plus a 3.4% dividend yield offers a 12-month total stock return of 53.4%. Steady gold prices and potential acquisitions provide optionality.<\/p>\n\n\n\n

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Analysis and Opinion<\/h2>\n\n\n\n

Apex Mining Co., Inc. (APX) is a little-researched gold miner whose earnings have outgrown its market capitalization. The Company is on track to earn over P3 Billion this year, yet its market capitalization sits at just over P10 Billion.<\/p>\n\n\n\n

The Marcos government is looking to mining to fill the void left by depleted foreign tourist receipts and plateauing OFW remittances. Reading from the same page, the Duterte administration lifted the ban on open-pit mining before the end of its term. Congress is now drafting a new tax regime meant to remove uncertainties that plagued the industry during the Duterte years.<\/p>\n\n\n\n

In March 2022, months before the change in government, ports magnate Enrique Razon acquired a controlling stake in Apex Mining.<\/p>\n\n\n\n

Apex Mining runs two operational mines, the Maco and Sangilo Mines, which produce a combined 2,500 tonnes of mined ore per day. From the mined ore, the Company extracts gold and silver and produces bullions. The bullions are then sold to its sole customer, Hereaus Ltd., a mineral trading company based in Hong Kong.<\/p>\n\n\n\n

The company’s low P\/E of 3.2x reflects both apathy towards the mining sector as well as doubts that current earnings are sustainable. Yet even assuming that gold prices were to fall to pre-pandemic levels of US$1,200\/oz by the end of next year, Apex Mining would still be priced at only 4.0x 2024F earnings. Gold prices are hovering at US$1,800\/oz today.<\/p>\n\n\n\n

Apex Mining\u2019s production capacity is slated to increase by 25% over the next two years, possibly more with acquisitions. A weaker Peso will lower its cost of production. Should gold prices hold at these levels, earnings and dividends will surpass our forecasts.<\/p>\n\n\n\n

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Check how many brokers recommend this stock<\/h2>\n\n\n\n
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All Stock Rankings<\/a><\/blockquote>