YB new stock pitches (Wed Oct 15)

Thungela Resources Limited (TGA.L) is positioned as a 'last man standing' coal miner benefiting from supply disruptions affecting rivals through war and environmental policies while coal prices remain above the critical $100 per tonne threshold. The company's bull case centers on multiple macro factors: AI driving higher electricity consumption, electrification outpacing renewable energy buildout, intermittency challenges requiring baseload power, failed European energy policies, Trump's pro-coal stance in the US, and rapid coal power generation expansion in the Global East/South, with China using coal as an oil substitute for petrochemicals. TGA offers strong cashflow generation, a proven track record of shareholder returns, and operates as a low-cost producer set to capitalize on supply constraints from competitors facing disruptions in Russia due to manpower shortages and other countries implementing restrictive environmental policies, positioning the company to benefit while other coal mining nations face operational challenges.

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Anavex Life Sciences Corp (AVXL), a pre-commercial biotech trading above $10, is pursuing EU approval for blarcamesine, a Sigma-1 agonist targeting early Alzheimer's disease, but faces significant regulatory and safety concerns that warrant a short position with price targets of $2-5. The company's Phase III trial failed one of two co-primary endpoints, with the successful ADAS-Cog13 endpoint showing efficacy only at week 48 and requiring questionable statistical pooling of 30mg and 50mg dose groups to achieve significance. Serious adverse events were alarming: 35.8% of patients experienced dizziness versus 6% on placebo, 14.3% had confusion versus 0.6% on placebo, and 24.6-38.7% of drug patients terminated due to adverse events compared to 7.7% on placebo. The Committee for Medicinal Products for Human Use (CHMP) sent a Letter of Outstanding Issues in September 2025, with a decision expected in November-December 2025 meetings. Bull case factors include the drug's novel mechanism targeting upstream cellular pathways without amyloid-related imaging abnormalities and addressing unmet medical needs as an oral, once-daily treatment. However, bear case risks dominate: the company has a history of dilutive financing through vulture agreements with Lincoln Park Capital (shares outstanding increased from 34MM to 85MM from 2015-2025), questionable management practices including paid stock promotion campaigns, delayed trial results, and a part-time CFO earning $400-500k annually. CEO Chris Missling receives $800k base salary plus total compensation reaching $6.8MM in 2022, with milestones based on trial completion rather than regulatory approvals. The EMA requires efficacy in both cognitive and functional endpoints for AD approval, but blarcamesine failed the ADCS-ADL functional endpoint, and institutional ownership is primarily passive index funds rather than smart money biotech specialists. January 2026 puts with strikes of $6-9 offer attractive risk/reward given the expected CHMP rejection timeline.

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Kwan Yong Holdings Limited (9998.HK) has surged approximately 40% but still trades at an attractive discount below 5x PE with substantial excess cash representing nearly the entire market capitalization. The company compares favorably to peers like Huationg and CTR Holdings, which trade at premiums despite being primarily subcontractors. Although Kwan Yong did not tender for a hospital project in Tengah and narrowly lost an HDB tender, numerous opportunities remain in the reconstructed tender book from government procurement sites. The stock deserves to trade at least at cash value, representing approximately 40% upside potential from the HK$0.45 trading range where sellers can still be found.

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