Champion Iron Limited

Section1: Company Overview and Fundamental Insights

1.1 Company Overview:

Champion Iron Limited (ASX: CIA) produces and sells high-grade iron ore concentrate to customers in China, Japan, the Middle East, Europe, South Korea, India, and Canada. It operates the Bloom Lake Mining Complex in the Labrador Trough, Quebec and owns the Kamistiatusset (Kami) project.

1.2 The Key Positives, Negatives, Investment Highlights and Risks

1.3 Top 10 Shareholders:

The top 10 shareholders collectively form ~34.77% of the total shareholdings. O'Keeffe (William Michael) holds the maximum number of shares with ~8.71% shareholding, followed by Investissement Québec with ~8.42%, as depicted in the chart below: 

1.4 Key Metrics:

The company’s EBITDA margin of 65.6% stands higher than the industry median of 29.4%. Moreover, CIA has improved its ROE when compared to FY18.

Section 2:  Business Updates and Financial Highlights

2.1 Recent Developments: The below picture depicts the change in substantial shareholding made recently:

2.2 Key Takeaways from Recent Results:

Section 3:  Key Risks and Outlook

Section 4: Stock Recommendation Summary

4.1 Price Performance and Technical Summary:

4.2 Fundamental Valuation

Valuation Methodology: P/E Multiple Based Relative Valuation (Illustrative)

Markets are trading in a highly volatile zone currently due to certain macro-economic issues and geopolitical tensions prevailing. Therefore, it is prudent to follow a cautious approach while investing.

Note 1: The reference data in this report has been partly sourced from REFINITIV.

Note 2: Investment decision should be made depending on the investors’ appetite on upside potential, risks, holding duration, and any previous holdings. Investors can consider exiting from the stock if the Target Price mentioned as per the Valuation has been achieved and subject to the factors discussed above.

Technical Indicators Defined: -

Support: A level at which the stock prices tend to find support if they are falling, and downtrend may take a pause backed by demand or buying interest.

Resistance: A level at which the stock prices tend to find resistance when they are rising, and uptrend may take a pause due to profit booking or selling interest.

Stop-loss: In general, it is a level to protect further losses in case of any unfavourable movement in the stock prices.

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