Refinement To MM’s process and comments on Coast Entertainment (ASX: CEH) & Arafura Rare Earths Ltd (ASX: ARU)

Hi Michael,

We appreciate the feedback – the markets are always evolving, and we need to do the same. Many fund managers/investors have come unstuck not moving with the times.

Coast Entertainment (ASX: CEH) – for subscribers unfamiliar with CEH its the old Ardent Leisure, a $200mn Australian leisure and attractions operator that owns and manages Dreamworld, Whitewater World and the Sky Point Observation Deck on the Gold Coast. The companies shares “popped” this week

The rally was been driven by two material catalysts, both of which improved the investment case:

• Stronger-than-expected FY26 trading update: CEH reported +20.8% revenue growth for FY26 and guided to strong earnings (EBITDA) growth for both its Theme Parks & Attractions business, reinforcing that Dreamworld’s turnaround is continuing.
• Queensland Government approval for the Coomera masterplan: The approval covers CEH’s 55-hectare landholding around Dreamworld and expands the range of permitted uses, including tourism, accommodation and other complementary developments. This should unlock significant long-term value from land that had previously received little credit in the share price.

The combination of news sent the shares up around +17%, their biggest one-day gain in more than three years, but most of these gains have since been surrendered.

• We think this is an improving business, and we’d be cautiously bullish around 50c.

Arafura Rare Earths Ltd (ASX: ARU) – this $1.2bn rare earths developer has been busy this year. In May, the board approved a Final Investment Decision (FID) for its $1.6 billion flagship Nolans Rare Earths Project, paving the way for Australia’s first fully integrated ore-to-oxide rare earths operation. The company also secured 93% of its binding offtake target with customers including Hyundai, Kia, Siemens Gamesa and Traxys, providing greater confidence in future demand.

• However, meaningful revenue is only expected once the plant reaches commercial production — likely in 2028/29 or even 2030.

To fund construction, Arafura completed a $350 million institutional placement, backed by Gina Rinehart’s Hancock Prospecting, alongside a $25 million Share Purchase Plan. The financing package was further strengthened by $230 million of cornerstone equity from Export Finance Australia and Germany’s KfW, a $200 million National Reconstruction Fund convertible note investment, and a new long-term rare earth oxide offtake agreement with an Indian industrial group.

No change to what we said in late 2025:

• We like ARU for a “specie” in the low 20c range, though given the big equity raise at 28c, we expect some resistance below 30c. Holders of ARU will no doubt require some patience.

chart

Arafura Rare Earths Ltd (ARU)

LAST UPDATED 23/07/2026 11:58

Close

chart

Arafura Rare Earths Ltd (ARU)

LAST UPDATED 23/07/2026 11:58