First Berlin Equity Research: new price target CAD 1.45First Berlin Equity Research has published a research update on Almonty Industries Inc. (ISIN: CA0203981034). Analyst Simon Scholes reiterated his BUY rating and increased the price target from CAD 1.30 to CAD 1.45.
"Almonty has reported another strong set of quarterly numbers which were above our forecasts. Q3 17/18 revenue (to end June) more than doubled to CAD22.5m (FBe: CAD20.5m; Q3 16/17: CAD11.0m) and was also nearly 30% ahead of the Q2 17/18 figure. EBIT jumped to CAD7.5m (FBe: CAD5.0m; Q3 16/17: CAD-1.1m). Q2 17/18 EBIT was €5.0m. The results benefited from the expiry at end 2017/early 2018 of fixed priced offtake agreements during a period of rising tungsten APT spot prices as well as higher volumes and lower unit costs. Industrial logic still suggests to us that the Sangdong deal will be done over the next few months to secure long term non-Chinese tungsten supply for western customers. The ten year offtake for Sangdong agreed in March strongly supports Almonty's negotiating position in our view. However, in the light of the delay in this deal we now take a more conservative view on 2017/18 WO3 shipments and pencil in 180k MTU (previously 196k MTU). Nevertheless, higher than expected Q3 17/18 profitability, particularly at Los Santos, prompts us to increase our full year EBITDA and EBIT forecasts by 13.2% and 21.1% respectively. We raise our price target to CAD1.45 (previously: CAD1.30) and maintain our Buy recommendation."