{"id":327302,"date":"2024-03-27T02:17:04","date_gmt":"2024-03-26T18:17:04","guid":{"rendered":"https:\/\/www.pinoyinvestor.com\/smartinvestor\/?p=327302"},"modified":"2024-03-27T02:17:05","modified_gmt":"2024-03-26T18:17:05","slug":"stock-in-focus-nickel-asia-corp-nikl-27-march-2024-by-ap-securities","status":"publish","type":"post","link":"https:\/\/www.pinoyinvestor.com\/smartinvestor\/stock-in-focus-nickel-asia-corp-nikl-27-march-2024-by-ap-securities\/","title":{"rendered":"Stock in Focus: Nickel Asia Corp. (NIKL) – 27 March 2024 by AP Securities"},"content":{"rendered":"\n

Summary of Broker’s Recommendation<\/h2>\n\n\n\n
Stock Code<\/strong><\/td>NIKL<\/td><\/tr>
Company Name<\/strong><\/td>Nickel Asia Corp.<\/td><\/tr>
Broker<\/strong><\/td>AP Securities<\/td><\/tr>
Opinion Issued on<\/strong><\/td>27 March 2024<\/td><\/tr>
Recommendation<\/strong><\/td>Hold<\/td><\/tr>
1-Year Target Price<\/strong><\/td>PHP 4.83<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n
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With the outlook that nickel prices will not go past $18,000\/mt and can potentially go as low as $15,000\/mt against the backdrop of higher Indonesian output and slow demand growth, it seems unlikely that NIKL can earn more than P3.0-Billion a year moving forward. <\/p>\n\n\n\n

This would translate to an EPS of around P0.2153 per share, giving NIKL a forward P\/E of 18.7x. This is a steep premium to its mining peers that tend to trade around the low-teens level. As such, we remain a HOLD on NIKL despite the overly-optimistic consensus Target Price of P4.83 per share.<\/p>\n\n\n\n

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

Indonesia seen capping nickel prices at $18k<\/h3>\n\n\n\n

Nickel erased its March gains after Indonesia said that it is acceleration its mining quota approval process. Prices have rallied since February on concerns over supply tightness as Indonesia, the top global producer, held back on approving mining quotas ahead of its national elections. The short-term rally ended after Indonesia said that it has issued nickel mining production quotas of 152.6-mmt so far this year, and that it intends to accelerate the approval process.<\/p>\n\n\n\n

The announcement came just as nickel prices cross the key resistance level at $18,000\/mt, lending credence to statements from Indonesian government officials that the country intends to keep nickel prices below 18k to maintain the competitive edge of nickel batteries over batteries made from other metals.<\/p>\n\n\n\n

Nickel\u2019s luster dims yet again<\/h3>\n\n\n\n

Nickel prices in Shanghai mirrored the drop in London and lost 2% to touch a new two-week low of 136,450 yuan per mt ($18,953.23\/mt). NIKL counts Chinese stainless steel smelters as their major customer, and exports almost all of their ore to China. Demand for pig-iron nickel in Asia\u2019s largest economy also remained weak amidst the slump in its property market, with most of the demand coming from government infrastructure projects.<\/p>\n\n\n\n

Not good for NIKL<\/h3>\n\n\n\n

Historically, NIKL reports its best earnings when nickel prices are above at least $16,000\/mt. The pressure of lower nickel prices on NIKL\u2019s bottom line has become especially pronounced since the company got into the more expensive business of nickel refining.<\/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>