Sell-Off in Thermal Coal and Acland Uncertainty Sees New Hope Shares Undervalued
No-moat New Hope’s shares have sold off significantly. After reaching highs of AUD 4.50 in March, the shares are down nearly 40% to below AUD 2.80 per share. We attribute the sell-off to soft production and higher unit costs in the first half, as well as a decline in the thermal coal price. Thermal coal is down about 30% to USD 83 per tonne from USD 120 in July 2018. New Hope has also not made much progress with the proposed new 1.5 million tonne a year Burton/Lenton mine and the long-awaited ap...New Hope operates four reportable segments: Coal mining in Queensland (including mining related exploration, development, production, processing, transportation, port operations and marketing); Coal mining in New South Wales (including mining production, processing, transportation and marketing); Oil and gas (including oil and gas related exploration, development, production and processing); and Treasury and investments (including cash, held to maturity investments and available for sale financial assets).
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