The curated database of hedge funds that publish investor letters. Research by geography, strategy, and schools of thought.
| # | Fund | Strategy | Style | Geography | AUM | Latest Letter |
|---|---|---|---|---|---|---|
As of Aug 24, 2026
Thungela Resources delivered a strong operational recovery in 1H26, with Ensham rebounding from geological challenges and South African production maintained despite mine closures. Export saleable production rose 6% to 8.48Mt while adjusted EBITDA nearly doubled to R1.32bn. However, statutory profit of R1.39bn was flattered by a R1bn non-cash gain from the Kleinkopje disposal, and adjusted operating free cash flow of R1.89bn benefited materially from R1.1bn in FX derivatives and working capital movements. The core mining result was less spectacular than headlines suggest. Transnet rail performance improved to 59.9Mt annualised, a meaningful development for export capacity. The company retained R6.1bn net cash and declared a R5.50 interim dividend, its tenth consecutive distribution since listing. At 525p, the £738m market capitalisation implies a £480m enterprise value after deducting net cash. The valuation appears to treat temporary operational problems, cyclical coal prices and eventual structural decline as arriving simultaneously. The thesis requires coal demand to decline more slowly than supply, with resulting cash reaching shareholders before mines deplete. The 1H26 results validate that transitional problems were indeed transitional, though risks around rail reliability, currency headwinds, realised-price discounts and management's capital allocation intentions remain.
Thungela is a cash-rich thermal coal incumbent protected by formidable barriers to entry in an industry where new supply is exceptionally difficult to finance, existing reserves continue to deplete, and customers still need dispatchable power despite the energy transition progressing more slowly than many expected.
The second half must demonstrate that South African production can deliver its expected seasonal recovery, Zibulo's transitional problems genuinely are transitional, Ensham's realised-price discount narrows as fixed-price contracts wash through, improved rail performance is sustained, underlying mine-generated cash flow strengthens, and surplus capital reaches shareholders rather than disappearing into vanity acquisitions. The market still appears sceptical that TGA can convert even a reasonable portion of its remaining resources into distributable shareholder cash, despite having already returned more than R23bn since listing, retained a substantial net cash balance, extended important mine lives and diversified into Australia. The valuation is treating temporary operational problems, cyclical coal prices and eventual structural decline as though they were all arriving simultaneously, when they aren't.
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