Analyst recommendation

                                                                                                           As at 24 May 2024

Executive Summary

In this report, we discuss several events that have occurred since our last report released in March. Over this period, Implats is up roughly by 40% outperforming peers.
1. Implats released a quarterly operational update for the period ending 31 March 2024 showing a 13% increase in group production to 827koz.
2. Implats entered Section 189 consultations at SA operations.
3. Implats concludes agreements for broad-based black economic empowerment (BBBEE) transaction at Impala Rustenburg and Impala Bafokeng.
4. Two large investment managers have increased their beneficial interest in Implats.
5. Platinum has increased by 14%, Palladium is 2% lower and Rhodium is 3% higher, however, all metals remain lower than the same time last year. At this stage there is no justification for making changes to our intrinsic value or hold recommendation despite Implats trading above our intrinsic value. We expect the volatility in the sector to continue and maintain our hold recommendation while we undergo further research into the PGM market.

Analyst thesis

Of the leading PGM producers, Implats has the highest group exposure to PGM’s, positioning the group well to benefit from the growing global demand for platinum group metals. The RBPlats acquisition has improved the asset base and should result in and extended life of mine and lower unit costs. Implats still has a solid balance sheet with net cash in excess of R5 billion which should see the group through a low commodity price environment. 

Valuation

Table 3: Valuation

Table 3: Company data

Source: FactSet