Analyst Note| Mathew Hodge, CFA |
We retain our CAD 25.00 fair value estimate for no-moat Teck Resources following its first-quarter fiscal 2021 results. Results were in line with our expectations and guidance is unchanged. After suffering substantial asset impairments, write-downs, and COVID-19-related costs in the same period last year, net profit after tax doubled to CAD 305 million. The miner heavily benefitted from increased prices in key commodities--copper and zinc--fuelled mainly by Chinese government stimulus packages aimed at boosting fixed-asset activity. This was despite lower production and sales volumes than the first quarter of 2020. The revenue benefit was partially offset by higher costs related to maintenance and supply, and appreciation of the Canadian dollar.