New Hope's FVE Raised by 4% on Higher Thermal Coal Prices; Shares Remain Undervalued
New Hope offers exposure to global energy demand via increasing thermal coal production at a time when many other miners are winding down or selling their thermal coal assets. The strategy relies on demand for high quality thermal coal remaining robust longer-term. The purchase of a further 40% interest in the Bengalla coal mine in New South Wales in 2018 took its ownership of Bengalla to 80% after the company purchased its initial 40% stake in 2016. Along with the development of New Acland Stage 3, this sees New Hope reliant on thermal coal. We forecast equity salable thermal coal production to rise to about 13 million metric tons in fiscal 2028, up from roughly 7.5 million in fiscal 2023, driven by the ramp up of New Acland Stage 3.