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MM’s thoughts on Bowen Coking Coal (BCB)

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Question asked 03/02/2024

MM’s thoughts on Bowen Coking Coal (BCB)

Hi James, I'd welcome your thoughts on BCB's recent quarterly update and change of CEO. The share has massively underperformed its other pure-play coking coal peers - i.e. SMR and CRN. Is it time to ditch the stock and take a loss? This is frustrating, given the constructive backdrop for met/coking coal. Which of the three mentioned (BCB, SMR, CRN) do you think offers the best exposure? Noting that S32 also has a significant coking coal exposure. Would appreciate your thoughts on the above. Kind regards, Young

Answer

Hi Young,

Bowen Coking Coal (BCB) has been a frustrating position in our Emerging Companies Portfolio for some time. We had a chance to see management after the quarterly update and are more comfortable with where things head from here, though some issues still remain, for the most part relating to a bottleneck at the port and rain impacted production.

Of the three mentioned, BCB will turn the most aggressively if they can put together some better performances operationally, and for that reason, we are sticking with them, but this is a super high risk, speculative investment, whereas something like a S32 is significantly lower risk comparatively speaking.

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Bowen Coking Coal Ltd (BCB)

LAST UPDATED 02/02/2024 15:09

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