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

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

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 > Research Report: Desjardins increases price target

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Comment by Khersonon May 03, 2021 10:19am

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Post# 33113601

RE:Research Report: Desjardins increases price target

anon314 wrote: By David Newman and Chi Le

The Desjardins Takeaway

CHE reports 1Q21 results on May 10 after market close. We forecast EBITDA of C$64m (vs consensus of C$66m), including SPPC EBITDA of C$29m, WSSC EBITDA of C$24m, EC EBITDA of C$29m and corporate costs of -C$19m. While the impact should be felt on a lagged basis (eg caustic soda is priced based on the Northeast Asia index for the last month of the previous quarter), a recovery in chemicals demand and prices should translate into an acceleration in earnings toward 2H21 and 2022.

Valuation

An excellent reopening trade. We are increasing our target to C$12.00 (was C$9.00) based on 7.25x EV/2022 EBITDA (was 7.5x EV/2021 EBITDA) and our DCF. CHE currently trades at 6.3x our 2022 EBITDA estimate vs its specialty chemical peers at 13.3x and commodity chemical peers at 7.0x, including OLN and WLK at 5.7x and 8.0x, respectively.

The problem with Desjardin's 1st Quarter EBITDA forecast of $64 million is that it will still not leave enough Distributable Cash to completely cover the Distributions. As I have been saying for quite sometime now, the present distribution is not sustainable.
Kherson

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