MNI China Daily Summary: Friday, November 29

MNI: GERMANY NOV UE RATE (SA) 6.1% (FCST 6.1%); OCT 6.1%

MNI BRIEF: China Extends U.S. Import Tariff Exemption List

MNI BRIEF: Trump Tariffs To Push China, EU Cooperation - BOC

MNI: PBOC Net Drains CNY156.1 Bln via OMO Friday

MNI: PBOC Sets Yuan Parity Lower At 7.1877 Fri; -1.39% Y/Y

MNI: ITALY NOV FLASH HICP +0% M/M, +1.6% Y/Y

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MNI: UK OCT M4 MONEY SUPPLY -0.1% M/M, +3% Y/Y

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MNI EXCLUSIVE: German Turmoil Dashes EU's Joint-Funding Hopes -Officials

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BASIC INDUSTRIES: Silfin (SCRSBE NR/BBB-/NR): Roadshow Notes

BASIC INDUSTRIES
  • 50% of the revenue comes from silica sand which is a glass feedstock. This is quite a narrow commodity focus with cyclical end markets.
  • The issuer is guaranteed by SCR-Sibelco (€2.85bn market cap). The founding family hold majority voting rights and the equity is thinly traded. Leverage ticked up to 1.9x pro forma following a buyback of a block of shares and the acquisition of SMI, a North American glass recycling business.
  • It has divested its Russian assets but is still present in Ukraine.
  • S&P has a 2x leverage threshold which the company also sees as a maximum level with a commitment to IG.
  • FCF is reported positive for the past 5 years, with a large jump to €441mn last year flattered by WC changes. Adjusting for prepayments and factoring leaves a still healthy €153mn with €200mn targeted by 2025. The company is active in bolt on acquisitions averaging €50-100mn annually. There are also ongoing capex requirements in the high growth HPQ sites.
  • FY24 EBITDA is forecast at €630mn. EBITDA margins have increased over time to around 20%.
  • S&P sees adj. FFO/ND > 45% over the next 2 years.
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