Chemtrade Logistics Income 6 50 Convertible Unsecured Subordinated Debentures T.CHE.DB.E

Alternate Symbol(s): T.CHE.DB.H | T.CHE.UN | CGIFF | T.CHE.DB.F | T.CHE.DB.G

Chemicals Basic Materials

Chemtrade Logistics Income Fund is a Canada-based company that operates a diversified business providing industrial chemicals and services to customers in North America and around the world. The Company's segments include Sulphur and Water Chemicals (SWC), and Electrochemicals (EC). SWC segment markets, removes and/or produces merchant, Regen and sulphuric acid, sodium hydrosulphite, elemental sulphur, liquid sulphur dioxide, hydrogen sulphide, sodium bisulphite, and sulphides, and provides other processing services. This segment also manufactures and markets a variety of inorganic coagulants used in water treatment, including aluminum sulphate, and a number of specialty chemicals, including sodium nitrite. EC segment manufactures and markets sodium chlorate and chlor-alkali products including caustic soda, chlorine and HCl, largely for the pulp and paper, oil and gas and water treatment industries. These products are marketed primarily to North American and South American customers.

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Chemtrade Logistics Income 6 50 Convertible Unsecured Subordinated Debentures > Desjardins Research Report: Raised to Buy with a $9 Target

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Post by anon314on Feb 12, 2021 10:18am

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Post# 32551451

Desjardins Research Report: Raised to Buy with a $9 Target

From David Newman and Chi Le of Desjardins this morning (11 Feb 2021):

The Desjardins Takeaway

CHE is scheduled to report 4Q20 results on February 23 after market close (call 10am EST on February 24; dial-in 866-211-4154). We forecast adjusted EBITDA of C$47m, driven by a more constructive outlook on merchant and ultra-pure acid, stable water solutions products, and early signs of recovery in the chlor-alkali market (especially HCl), offset by the COVID-19 impact on driving activity, specialty chemicals and sodium chlorate.

and

Valuation

We are increasing our target to C$9.00 (was C$5.75) based on 7.5x (was 6.5x) our 2021 forecast and our DCF. CHE currently trades at 6.8x our 2021 EBITDA estimate vs its closest peers at 11.6x.

Recommendation

We are encouraged by the brighter prospects for SPPC and EC, with demand and prices slowly improving. The share price should rally ahead of an improvement in fundamentals toward 2H21. Our rating is Buy (was Hold).

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