South 32 is it worth buying
Given the excellent report and the reopening of the Chinese market is South 32 worth investing in or do you view this as short term?
The Latest Q&A
Answer
Hi Rob,
You are right, it was a very good 1H23 report from S32 on Thursday, with revenue of $US4.52bn ahead of consensus of $US4.335bn which dropped down a strong beat at the profit line, with underlying NPAT of $US560, about ~13% above where the market thought it would be.
They reconfirmed FY23 production guidance saying that production volumes will lift +6% in H2 FY23, which will have a positive impact on costs with FY23 operating unit cost guidance lowered for some operations while group capital expenditure guidance was lowered by US$105m. While we don’t own S32, this is one of our preferred diversified miners and we can see ourselves owning it at some point in the near future, with levels around~$4.10 offering strong risk/reward in our view.
