{"id":331133,"date":"2025-01-15T19:35:07","date_gmt":"2025-01-15T11:35:07","guid":{"rendered":"https:\/\/www.pinoyinvestor.com\/smartinvestor\/?p=331133"},"modified":"2025-01-15T19:35:08","modified_gmt":"2025-01-15T11:35:08","slug":"stock-in-focus-nickel-asia-corp-nikl-15-jan-2025-by-ap-securities","status":"publish","type":"post","link":"https:\/\/www.pinoyinvestor.com\/smartinvestor\/stock-in-focus-nickel-asia-corp-nikl-15-jan-2025-by-ap-securities\/","title":{"rendered":"Stock in Focus: Nickel Asia Corp. (NIKL) – 15 Jan 2025 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>15 January 2025<\/td><\/tr>
Recommendation<\/strong><\/td>Buy<\/td><\/tr>
1-Year Target Price<\/strong><\/td>PHP 4.72<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n
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We believe that NIKL\u2019s price has bottomed out and it is already a bargain at its current P\/E ratio of 12.9x (vs regional comps mean of 19.7x). This valuation discount, along with recent corporate developments, underpins our BUY rating on NIKL with a Target Price of P4.72 per share.<\/p>\n\n\n\n

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

NIKL in talks with partner for Coral Bay stake sale<\/strong><\/p>\n\n\n\n

NIKL disclosed to the Exchange that it is in talks with Sumitomo Metal Mining Co. Ltd. for the sale of its entire 15.6% stake in Coral Bay Nickel Corp (CBNC), with NIKL looking to engage a third party to conduct the valuation and finalize the transaction price. With the proposed sale of the CBNC Shares, NIKL has reclassified its investment in CBNC as \u201cavailable for sale\u201d and will no longer recognize equity gains or losses from its investment in CBNC.<\/p>\n\n\n\n

Cutting losses?<\/strong><\/p>\n\n\n\n

CBNC is one of NIKL\u2019s two equity investments in nickel refining, with the other being Taganito HPAL (THPAL). The company originally owned 10% of both facilities, but later increased its stake in CBNC by buying an additional 5.6% for P1.53-Billion in 2022. Notably, this was the year when average nickel prices soared by 39.9% YoY to
$25,833.73\/mt. Average prices have dropped around 34.2% since then, after China made massive investments in pumping up Indonesian output of the metal. <\/p>\n\n\n\n

Likewise, NIKL\u2019s equity losses in CBNC have ballooned to a total of P1.3-Bn in the seven quarters since then. While the company did not provide a breakdown of equity earnings from HPAL facilities prior to 2022, available data shows that THPAL is relatively more profitable than CBNC and this could be the reason why NIKL
is looking to divest its CBNC stake while retaining its 10% equity investment in THPAL.<\/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>