Vale and steel stocks fall on China ore and data; banks rise, BR Properties and SulAmérica advance more than 3%

SAO PAULO – The shares of Vale (VALE3) and steelmakers such as CSN (CSNA3) and Usiminas (USIM5) fall between 1% and 2%, following the performance of iron ore.

Iron ore futures traded on the Dalian commodities exchange closed down 5% to RMB 808 per tonne. At the port of Qingdao, ore with 62% iron content closed with a devaluation of 1.9%, to US$ 153.67 a ton, according to Fastmarkets MB.

It is worth noting that, in China, the official industry Purchasing Managers Index (PMI) fell to 50.1 in August from 50.4 in July, data from the National Statistics Agency showed on Tuesday, remaining just above the 50 mark that separates growth from contraction. Analysts polled by Reuters had expected a drop to 50.2.

“Worse-than-expected PMIs add to the conviction of our view that the growth slowdown in the second half could be quite remarkable,” Nomura economists wrote in a statement.

On the other hand, after the eve’s falls, shares of banks such as Itaú (ITUB4), Banco do Brasil (BBAS3) and Bradesco (BBDC4) advance after the eve’s fall. Yesterday, the sector was pressured by news about demonstrations by different economic sectors in defense of democracy, on the eve of the acts of September 7th. See more here.

Also highlighted, SulAmérica (SULA11) has gains of around 3%; the company announced on Monday that it had submitted a binding proposal for the purchase of up to 100% of the HB Saúde Group for R$ 485 million.

BR Properties (BRPR3), which announced that it has sold 55% of one of the towers of the JK Complex, in São Paulo, to JFL Must, for R$ 555.9 million, has an increase of more than 3% of its shares.

Alliar (AALR3), on the other hand, had a sharp drop in shares after Rede D’Or (RDOR3) informed that its Board of Directors met and decided not to launch a voluntary public offering of the Company (OPA) aiming at the acquisition of up to the totality of shares issued by the company.

Check out more highlights:

Alliar (AALR3), Rede D’Or (RDOR3) and Fleury (FLRY3)

Rede D’Or São Luiz reported last Monday night that its Board of Directors met and decided not to launch a voluntary public offering by the Company (OPA) aiming at the acquisition of up to the entirety of the shares issued by Centro Diagnostic Imaging, Alliar.

The day before, the diagnostic medicine group Fleury said it had started preliminary studies to evaluate a potential transaction involving the medical diagnostics company Alliar.

According to XP, although the acquisition would be positive for Rede D’Or, given that Alliar should be the shortest path for the company to establish itself in the laboratory segment nationally, the end of this purchase movement does not change the positive outlook from in-house analysts to the company or to its fundamentals. “We reiterate our buy recommendation with a target price of R$ 88 per RDOR3 share”, they point out.

SulAmérica (SULA11)

SulAmérica announced on Monday that it presented a binding proposal for the purchase of up to 100% of Grupo HB Saúde for R$ 485 million. The transaction must be approved by the shareholders of HB Saúde, in addition to the sale of at least 50% plus one share of the voting capital.

The group has a portfolio of around 129,000 health plan beneficiaries and 25,000 dental plan beneficiaries, and consists of a health operator, a hospital, eight outpatient units, a children’s clinic, clinical and diagnostic centers, spaces preventive, occupational medicine and oncology center, located mainly in the cities of São José do Rio Preto and Mirassol, in São Paulo.

In 2020, the company recorded revenue of approximately R$300 million. “The transaction, when concluded, will represent an important movement for both SulAmérica and HB Saúde, its clinical staff and its beneficiaries”, says SulAmérica in a relevant fact.

BR Properties (BRPR3)

Commercial real estate company BR Properties announced on Monday that it had sold 55% of one of the towers in the JK Complex, in São Paulo, to JFL Must, for R$ 555.9 million.

According to BR Properties, the conclusion of the deal and payment will be made after overcoming certain precedent conditions. JFL Must is one of the businesses of businessman Jorge Felipe Lemann, son of billionaire Jorge Paulo Lemann.

Equatorial (EQTL3)

Itaú BBA commented on the proximity of the auction of the water and sewage concession in Amapá for 35 years, scheduled for September 2, by B3. The bank says it expects another competitive auction, with several players competing, and says it assesses that Equatorial is the most likely winner due to synergies with its concessions. Other likely players are Aegea, BRK and Gs Inima, the bank says.

Renner Stores (LREN3)

Lojas Renner said on Monday that there is so far no evidence of leaking of information or personal data, in any of its businesses, after a cyber attack suffered by the company on the 19th.

The retailer said that the operations of the distribution centers and back office were restored in the last week. The e-commerce operations on the websites and applications had resumed on the 21st and 22nd. The company added that it maintains the work of investigating, documenting and investigating what happened.

Rating agency Fitch on Monday upgraded CSN’s long-term foreign and local currency rating from BB- to BB, with a positive outlook. According to Fitch, the ratings reflect its solid iron ore business and its strong position in the Brazilian flat steel market, as well as the cost competitiveness of the business.

“The upgrades accompany CSN’s ongoing efforts to substantially strengthen its capital structure, including debt repayments, refinancing and asset sales,” the report agency said, citing CSN’s high iron ore prices and operational flexibility. , which sustains its cash flow for more than two years.

A new joint venture created by Vibra Energia and Copersucar should transact in its first year of operation 9 billion liters of ethanol, with R$ 30 billion in sales, becoming the largest biofuel trader in Brazil, as explained by executives of both partners at Monday.

Initially, the forecast is that around 90% of the new company’s annual volume –which will still be named– will be originated and sold in the domestic market, but the expectation is that international transactions will gain more weight over time, they pointed out, without predicting amounts.

“As ethanol becomes a global commodity, and we believe that this will happen over the next few years in this energy transition that we are going through, export and import flows will be increasing,” said the Commercial and of Copersucar Operations, Pedro Paranhos.

This morning, Vibra made another announcement, signing a cooperation agreement with ZEG Biogás for the joint development of biomethane. “The objective is to promote the growth of this market in the country, providing producers with technological solutions for the manufacture of biomethane from by-products of the industrial process that originate ethanol,” he said in a statement.

Tim elects Camille Loyo Faria as Chief Financial and Investor Relations Officer.

Credit Suisse started to cover the airlines Azul and Volaris, and revised their numbers for Gol, also updating the estimates for the Cup. The analysis is based on data on flights per capita, capacity recovery amidst the pandemic, global comparison with companies considering operating and liquidity ratios, and review of opportunities amid judicial recoveries of some companies in Latin America.

The bank says it sees strong execution, decent liquidity and market growth opportunities for Azul. The bank began coverage with an outperform valuation and a target price of R$50, compared to the quotation of R$37.89 for AZUL4 papers. The outperform valuation is based on Azul’s strong execution despite the pandemic, increasing market share from 21% in 2019 to 34% in the second half of 2021.

For Gol, the bank says it has a heavy cost structure. The bank downgraded the company’s valuation to underperform (perspective of valuation below the market average) and target price of R$19, compared to Tuesday’s quotation of R$20.13 for GOLL4 shares. The bank says that the company may benefit most from the potential recovery of traffic in Brazil due to its networks in São Paulo, Rio de Janeiro and Brasília. But Azul’s low free cash flow (FCF) generation and increased competition, as well as an unclear focus on environmental and social governance (ESG) make the company less attractive, the bank says.

Engie Brazil (EGIE3)

Electric company Engie Brasil Energia signed a contract on Monday for the sale of the Jorge Lacerda thermoelectric complex, powered by mineral coal in Capivari (SC), to Diamante Holding, a subsidiary of Fram Capital, for up to R$ 325 million, the company said in relevant fact. According to Engie, BRL 210 million will be paid at the end of the transaction and up to BRL 115 million are subject to compliance with certain contractually stipulated conditions.

Stone (STNE)

Payments company StoneCo posted a loss in the second quarter, with an extra provision, after admitting it was caught by failures in its credit business.

The company announced on Monday that it had an adjusted loss of BRL 150.5 million in the period, compared to a profit of BRL 150.3 million a year earlier. In net terms, the company had a profit of BRL 526 million, but due to an accounting gain of BRL 715 million with the mark-to-market of some investments.

Petrobras reaffirmed on Monday that it maintains its position in seeking the full sale of its stake in Braskem and is monitoring the process of selling the stake held by Novonor, the oil company said in a statement. Petrobras also said that there is no definition or decision on the matter.

Attention to news that may impact Rumo’s actions.

President Jair Bolsonaro signed a Provisional Measure establishing the new legal framework for rail transport. As reported on Monday by the General Secretariat of the Presidency of the Republic, the measure, which will still be published in the Official Gazette of the Union, aims to reduce bureaucracy in the authorization procedure for the construction of new railways and facilitate the attraction of private investments to the sector.

The government hopes to expand the capacity of rail transport and reduce logistics costs in the country.

XP highlights seeing the MP as positive for unlocking new investments in railways in Brazil, positioning it as a regulatory alternative for projects with demand visibility.

Regarding the project to extend the railway network from Rumo de Rondonópolis to Lucas do Rio Verde, in the State of Mato Grosso (MT), analysts believe that the MP does not interfere with the rite at the state level underway by the company because this is a project intrastate (starting and ending within the state itself).

The MP refers to the 2011 law (Federal Road System) which grants Federal jurisdiction only to interstate, interregional and international railroads.

“Finally, we see an additional reading of increased legal certainty for the state model of Authorization, since it grants the States competence to grant a railway that does not fall within the 2011 law (as we understand to be the case for the railway network extension from Rumo to Lucas do Rio Verde [LRV]). We see the publication of the MP as positive for the continuity of Rumo’s plans to obtain state authorization for LRV (already underway with the government of Mato Grosso)”, they point out.

(with Reuters and Estadão Content)

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