Edison

Coro Energy

Coro Energy has announced that in light of the unprecedented market changes, its board has initiated a material cost-reduction programme. As a result, James Menzies, the company’s CEO, saw his employment terminated with immediate effect. The board also mutually agreed with Nick Cooper that he will leave the company with immediate effect. Following these changes, the board will consist of James Parsons as nonexecutive chairman and Andrew Dennan, Marco Fumagalli and Fiona MacAulay as non-executive directors. As result of recent developments and Coro’s current situation, we are suspending our valuation.

On 1 April, Wheaton Precious Metals (WPM) announced that all of its partners’ mines are operational, with the exception of Voisey’s Bay, Constancia, Yauliyacu and Penasquito. Voisey’s Bay is not scheduled to deliver cobalt to WPM until FY21, so its temporary furlough will make no difference to FY20 estimates. However, other mines at risk of temporary closure include San Dimas and Los Filos in Mexico. As a result, WPM has withdrawn its production guidance for FY20. However, assuming these mines remain closed throughout Q220, but at higher prevailing metals prices (see Exhibit 1, overleaf), our FY20 EPS forecast for WPM has increased by 18.6%.

Epwin Group

The coronavirus outbreak has led to widespread temporary closures across the UK building materials supply chain and Epwin has taken similar steps. We have brought our FY19 estimates in line with management’s update comments. Clearly, there will be downward pressure on trading for a currently indeterminate period and, it is important to note that estimates beyond FY19 are yet to be adjusted for COVID-19 impacts.

XP Power

XP Power’s Q1 trading update confirmed that revenues increased 4% y o y/q o q and the Chinese facility has returned to normal staffing levels. Strong demand, mainly from healthcare customers, saw a 25% q o q increase in orders and a Q1 book-to-bill of 1.49x. Despite strong Q1 demand, the level of uncertainty surrounding both supply and demand for the rest of the year has caused XP to cancel its previously proposed Q419 dividend in order to preserve cash. We maintain our revenue forecasts, but factor in higher costs in FY20 and remove our Q419 and Q120 dividend estimates.