New Hope continues to correct the strong gains enjoyed through 2021/22, and we remain enthusiastic buyers of dips. There is no change to our bullish outlook toward old-world energy in the near term as the energy transition evolves, our bullish thesis is largely underpinned by looming supply constraints ultimately meeting higher demand. In terms of risk, our main concern stems from government intervention as they look to grab a larger slice of the pie. Over the next 12 months, NHC is forecast to yield ~11%, but of course, this will obviously be coal price dependent.
- We like the risk/reward towards NHC (& WHC for that matter) on dips towards fresh 2023 lows i.e. we may add to existing positions.
MM will consider increasing our exposure to coal into fresh 2023 lows
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