Kaz Minerals

Kaz Minerals is a holding company. Co. and its subsidiaries operates in the natural resources industry through five divisions: Bozshakol, Aktogay and East Region, which are engaged in the mining and processing of copper and other metals in Kazakhstan; Bozymchak, which is engaged in the mining and processing of copper and gold in Kyrgyzstan; as well as Mining Projects, which is engaged in the development of metal deposits and processing facilities in Kazakhstan. Co. operates the Bozshakol and Aktogay open pit copper mines in Pavlodar and the East Region of Kazakhstan, three underground mines in the East Region of Kazakhstan and the Bozymchak copper-gold mine in Kyrgyzstan.
  • TickerKAZ
  • ISINGB00B0HZPV38
  • ExchangeLondon Stock Exchange
  • SectorMining
  • CountryUnited Kingdom

Analysts

Research Team

Focus: keeping our BUY on KAZ Minerals, with lower GBp 509 PT; ANY PLC’s 2Q19 beats our expectations, but still in line with our full-year target; Gazprom may buy out drilling contractor; Purcari Wineries – 2Q19 results call takeaways

HEADLINES: • KAZ Minerals: stretching the balance sheet (stays BUY) • ANY PLC: 2Q19 beats our expectations, but still in line with our full-year target • Gazprom: may buy out drilling contractor • Purcari Wineries: 2Q19 results call takeaways • 11 bit studios: 2Q19E preview (due on 27 August) • CD Projekt: 2Q19E preview (due on 29 August) • Short News (IDA)

Andy Jones ...
  • Pawel Wieprzowski, PhD

KAZ Minerals: Stretching the balance sheet (stays BUY)

Since our previous update on KAZ Minerals, following the Baimskaya acquisition, the stock rallied 63% from the level at the time to exceed our price target (PT) in April. Since then, the escalation of the US-China trade wars and slower growth have dragged copper prices lower, down 12% since the April high to USD 5,739/t now. With lower copper prices potentially delaying Baimskaya’s development and the increasing leverage, we have lowered our PT by 25%, to GBp 509/share, but this still leaves 21% upside, after the 15% decline after the results, which we believe to be an overreaction. The stock ...

BCS Equity Daily: Fund Flows, Index Alert, Economics, Rosneft, Norilsk Nickel, Mechel, KAZ Minerals, TCS, X5 Retail Group

Trade, Treasury Watch v US strength Ahead: Buying weakness tested. The dictum to buy into weakness will be tested. Indeed, the backdrop features an escalating trade war, weak data points out of two economic engines (China, Germany earlier this week), and an inverted UST yield curve. Not helping, expectations the US Fed will cut the key rate mid-September is already priced in, while skepticism vis-à-vis Trump’s optimism that he and President Xi will soon make headway on trade is rife. That said, these storm clouds carry a silver lining – key US economic data points again reveal the resili...

Research Team

WOOD Morning (16 August)

HEADLINES: • X5: strong 2Q19 numbers POSITIVE • Purcari Wineries: 2Q19 results in line NEUTRAL • KAZ Minerals: 1H19 financial results - results in line, but USD 180m capex acceleration • Kazatomprom: US blacklists China General Nuclear Power Group NEGATIVE • Benefit Systems: 2Q19E preview (due on 22 August)

Andy Jones

WOOD Flash – KAZ Minerals: 1H19 financial results – results in line, but USD 180m capex acceleration

KAZ Minerals reported its 1H19 financial results this morning (15 August). The EBITDA beat the consensus by 3%, due to slightly lower than expected costs. Net debt rose 29% hoh, to USD 2.56bn, in line with the consensus, due to negative FCF and the impact of the Baimskaya first cash payment in 1H19. The FCF was weaker than we expected, due to a USD 156m working capital build up. In addition, KAZ announced an interim dividend of US¢ 4/share, a 0.7% yield. 2019E production guidance remains unchanged and the cash cost guidance in the East Region/Bozymchak was lowered by US¢ 30/lb. However, the ca...

Andy Jones ...
  • Pawel Wieprzowski, PhD

KAZ Minerals: Stretching the balance sheet (stays BUY)

Since our previous update on KAZ Minerals, following the Baimskaya acquisition, the stock rallied 63% from the level at the time to exceed our price target (PT) in April. Since then, the escalation of the US-China trade wars and slower growth have dragged copper prices lower, down 12% since the April high to USD 5,739/t now. With lower copper prices potentially delaying Baimskaya’s development and the increasing leverage, we have lowered our PT by 25%, to GBp 509/share, but this still leaves 21% upside, after the 15% decline after the results, which we believe to be an overreaction. The stock ...

BCS Equity Daily: Fund Flows, Index Alert, Economics, Rosneft, Norilsk Nickel, Mechel, KAZ Minerals, TCS, X5 Retail Group

Trade, Treasury Watch v US strength Ahead: Buying weakness tested. The dictum to buy into weakness will be tested. Indeed, the backdrop features an escalating trade war, weak data points out of two economic engines (China, Germany earlier this week), and an inverted UST yield curve. Not helping, expectations the US Fed will cut the key rate mid-September is already priced in, while skepticism vis-à-vis Trump’s optimism that he and President Xi will soon make headway on trade is rife. That said, these storm clouds carry a silver lining – key US economic data points again reveal the resili...

Andy Jones

WOOD Flash – KAZ Minerals: 1H19 financial results – results in line, but USD 180m capex acceleration

KAZ Minerals reported its 1H19 financial results this morning (15 August). The EBITDA beat the consensus by 3%, due to slightly lower than expected costs. Net debt rose 29% hoh, to USD 2.56bn, in line with the consensus, due to negative FCF and the impact of the Baimskaya first cash payment in 1H19. The FCF was weaker than we expected, due to a USD 156m working capital build up. In addition, KAZ announced an interim dividend of US¢ 4/share, a 0.7% yield. 2019E production guidance remains unchanged and the cash cost guidance in the East Region/Bozymchak was lowered by US¢ 30/lb. However, the ca...

BCS Equity Daily: Index Alert, Economics, Lukoil, KAZ Minerals, Mosenergo, X5 Retail

Yuan >7/US$, Brent softer Ahead: Risk trade tested. The trade war front offers only recession risk and persistent uncertainty – the PBoC set the mid-point of the yuan at 7.0326, stronger than expected, but still weaker than the psychologically important 7/USD for the 4th consecutive session. No surprise, Brent remains under pressure from an uncertain-to-bearish demand outlook. Meanwhile, expectations that pending economic data points will reveal further softness and, hence, bolster the case for more aggressive central bank accommodation will play to both the bears and bulls alike; yesterda...

Andy Jones

WOOD Flash – KAZ Minerals: 2Q19 trading update – immaterial cut in zinc guidance

KAZ Minerals released its 2Q19 trading update this morning (25 July), and reiterated its 2019E production guidance for copper at 300kt, gold at 170-185koz and silver at 3,000koz, with gold and silver output ahead of the required run-rate after 1H19 and copper output needing to accelerate only 3% hoh. After the weak 1Q19 production of zinc, despite the acceleration in 2Q19 (zinc output nearly doubled qoq), the company has revised down its zinc guidance from 50kt to 40-45kt, which is unsurprising, in our view. However, given that zinc was less than 5% of the group revenue in 2018, we do not see ...

1 director bought

A director at Kaz Minerals bought 3,325 shares at 588p and the significance rating of the trade was 56/100. Is that information sufficient for you to make an investment decision? This report gives details of those trades and adds context and analysis to them such that you can judge whether these trading decisions are ones worth following. Included in the report is a detailed share price chart which plots discretionary trades by all the company's directors over the last two years clearly showing Close periods where trading activity is restricted under listing rules. The names of board membe...

Research Team

Focus: keeping our BUY on KAZ Minerals, with lower GBp 509 PT; ANY PLC’s 2Q19 beats our expectations, but still in line with our full-year target; Gazprom may buy out drilling contractor; Purcari Wineries – 2Q19 results call takeaways

HEADLINES: • KAZ Minerals: stretching the balance sheet (stays BUY) • ANY PLC: 2Q19 beats our expectations, but still in line with our full-year target • Gazprom: may buy out drilling contractor • Purcari Wineries: 2Q19 results call takeaways • 11 bit studios: 2Q19E preview (due on 27 August) • CD Projekt: 2Q19E preview (due on 29 August) • Short News (IDA)

Research Team

WOOD Morning (16 August)

HEADLINES: • X5: strong 2Q19 numbers POSITIVE • Purcari Wineries: 2Q19 results in line NEUTRAL • KAZ Minerals: 1H19 financial results - results in line, but USD 180m capex acceleration • Kazatomprom: US blacklists China General Nuclear Power Group NEGATIVE • Benefit Systems: 2Q19E preview (due on 22 August)

Research Team

Focus: PKO BP’s 2Q19 a record high, but sector risks are present; CEZ’s 2Q19 EBITDA beats on strong sales results, and net profit on low effective tax rate; Sphera’s 2Q19 results above expectations on both top line and EBITDA

HEADLINES: • PKO BP: 2Q19 a record high, but sector risks are present POSITIVE • CEZ: 2Q19 EBITDA beats on strong sales results, and net profit on low effective tax rate POSITIVE • Sphera: 2Q19 results above expectations on both top line and EBITDA POSITIVE • Kofola: 2Q19 results - cold May and weak pricing in Czech and Slovakia drive results below forecasts NEGATIVE • MedLife: 2Q19 revenues and EBITDA in line, net profit beat on lower tax rate NEUTRAL • Orange Polska: cuts prices of Flex mobile tariffs NEGATIVE • KAZ Minerals: 1H19E - small decline in EBITDA, but weaker FCF on higher capex (d...

Research Team

WOOD Morning (21 February)

HEADLINES: * Aselsan: 4Q17 results - low quality NI beat, 3% EBITDA miss and weaker than expected 2018E guidance NEGATIVE * Orange PL: 4Q17 results - EBITDA in line with our forecasts, guidance on 2018E maintained NEUTRAL * OMV: 4Q17 results - EBITDA in line with consensus, record dividend proposal NEUTRAL * OMV Petrom: 4Q17 results - EBIT below expectations, 6.5% dividend recommendation NEUTRAL * Romanian banks: draft law to cap interest rates NEUTRAL * Aygaz: to distribute TRY 1.53/share from 2017 profit POSITIVE * Graphisoft Park: 4Q17 results - beat on higher rental in...

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In a race to the bottom for the US dollar, the local gold price slipped a couple of pounds per ounce (£/oz) to just under £955/oz. It was a totally different story for US dollar priced commodities. Silver was also helped by a recovery from the previous day’s fall, which had occurred in response to US tariffs on solar panels. It is argued that growth elsewhere, particularly in China, will make up for any shortfall in US demand.

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