BHP "Met-coal: What's next?" (Neutral) Shaw

研报英文原文证据摘录

BHP "Met-coal: What's next?" (Neutral) Shaw

QLD

UBS Cons.

(introduced in Jun-22, results in >60% ETR when met coal is >A$300/t). We expect 06/26E 2.61 2.63

BHP to pursue further cost cutting with mgmt still seeing high quality met-coal as core; 06/27E 2.64 2.63

however, given the attractive valuations achieved in recent met-coal M&A (note) and the 06/28E 2.42 2.42

likelihood the QLD royalties will remain until at least 2032, we believe some investors

question whether the new CEO should explore alternative strategies especially as Lachlan Shaw

holding (not investing in) depleting assets typically results in cost challenges & impacts Analyst

lachlan.shaw@ubs.com

value medium-term.

+61-3-9242 6387

Met-Coal: High quality assets, attractive commodity; but investment needed Myles Allsop

Analyst

BHP has streamlined its portfolio of met coal operations over the last decade to focus on myles.allsop@ubs.com

its 5 highest quality mines and the Hay Point coal terminal in QLD which it owns through +44-20-7568 1693

a 50% stake in the BMA JV with Mitsubishi. These mines are expected to produce

George Eadie

~36Mt (100% basis) in FY26 but are struggling to generate FCF at current prices with

ROCE just 1% in 1H-FY26 (group 21%). Our base case NPV for BHP's share of BMA is george.eadie@ubs.com

~US$12bn assuming the upper tier of the QLD royalty (40% >A$300/t) is removed from +1-646-996 4596

2033 (post Brisbane Olympics); if sustained, our BMA NPV falls to ~$7bn. We note

transaction multiples for high quality met-coal assets at mid-cycle met coal prices (UBSe

6-7x EV/EBITDA at $220-240/t) imply a valuation range for BHP's stake of US$8-11bn

(Figure 3BMAFY28EV/EBITDA(US$bn)atvariousmetcoalprices&multiples) which compares favorably to our base case valuation.