Category Archives: shipping

Quarterly Shipping Update: Q2 Actuals vs Forecast

As Q2 came to an end, we analyse the actual data vs our forecast sector by sector, including latest developments going into Q3. We have also added updated peer tables for each sector. Key takes: Oil Tankers (BUY) and Dry...

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Posted in dry bulk, LNG carriers, LPG shipping, oil tankers, Private Nework, shipping, VLGC | Leave a comment

OET-NO (BUY, TP NOK 136/$17): Okeanis Eco Tankers Initiation

Okeanis Eco Tankers just concluded a $100m IPO in Oslo and is expected to start trading July 4. The timing is exquisite in our view, with 77% of the fleet to be delivered from now until YE’19, just as the...

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Posted in oil tankers, shipping | Tagged , | 6 Comments

LPG Shipping (BUY): Trump’s Total Trade War (27-page report)

With an escalating trade war between the US and China seemingly gathering momentum, we estimate VLGCs to be one of the hardest hit shipping sectors (excl. containers). The US-Sino trade constitutes ~8% of the global VLGC demand, but we find...

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Posted in LPG shipping, shipping, VLGC | Tagged , , , , , | 2 Comments

GBLK-US (BUY, TP $26/NOK 212), IPO Launched: All Systems Go for GoodBulk (v2)

As we wrote in our initial IPO update in early June, we assumed 8m new shares at $15.8/sh, or a 5% discount to NAV. Today, GoodBulk launched the IPO for 8.5m shares at a range of $15.5-$17.5/sh, well in time...

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Posted in dry bulk, shipping | Tagged , , , , | 1 Comment

Genco Shipping (BUY, TP 24): Value Destruction

Genco Shipping raised new equity this week with concurrent vessel acquisitions, which were highly dilutive towards existing shareholders. We calculate a direct loss of $0.86/sh (-4.7%) for existing shareholders and reduce our target price to $24/sh (from $26) based on...

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Posted in _Public, dry bulk, shipping | 1 Comment

Genco Shipping (BUY, TP 26): Equity Raise Amidst Fleet Renewal (short comment)

Genco Shipping files for equity raise amidst fleet renewal 2xCape + 2xUltra firm 14% above our latest generic valuation. Mainly a sign of rising asset prices Positive read-across to the dry bulk sector in general...

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Posted in dry bulk, shipping | 1 Comment

BULK-NS (BUY, TP NOK 212), IPO Announced: All Systems Go for GoodBulk

As we highlighted in our Get Ready for Launch update in March, the then expected Q2/Q3 New York listing was announced on Friday through an F-1. Assuming a 5% discount to our current NAV, we forecast 8m new shares to...

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Posted in _Public, dry bulk, shipping | Tagged , , , , | 4 Comments

TNK Upgraded to BUY: Our Liquidity Concerns Are Finally Mitigated

As we have argued time and again since our initiation in May 2017, Teekay Tankers would need to abolish dividends, seek a debt moratorium and/or do more sale/leasebacks in order to survive the trough without a dilutive equity issuance. In...

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Posted in oil tankers, shipping | Tagged , | Leave a comment

HUNT-NO (BUY, TP NOK 5.8) Hunter Is Hitting All the Targets (7-page report)

Since our initiation in early April, Hunter has moved ahead on its three options and have added another three to its portfolio. Today, the company announced an equity raise of gross ~$64m which would leave the company fully financed until...

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Posted in oil tankers, shipping | Tagged , | 8 Comments

Oil Tanker Sector Upgraded to BUY: Finally, Time to Tank Up

We upgrade the Oil Tanker sector from HOLD to BUY  So far, we have perfectly timed our recommendations as far back as 2015 as we foresaw the cyclical peak and have since been awaiting the expected mid’18 inflection point.  Given...

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Posted in Oil services, shipping | Tagged , , , , , , , , , , , | 3 Comments

LPG Shipping (BUY): Do Not Liquidate Palatable Growth (34-page report)

Recent chatter on the street is that the cyclical VLGC expansion has been cancelled for 2018. Shares fell 8% today and are down 16% since our March sector report. Thus, it would be prudent to reiterate why we believe 3Q...

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SALT (BUY, TP 9.5) 1Q18 Review: Indirect Dividend Yield of 5.3% (7-page report)

Short Comment: 1Q18 Review EBITDA of $18.3m slightly below our $19.4m forecast and consensus at $20.8m Realized TCE/d in the quarter of $10,726 was in-line with consensus but above GR at $10,352 Offset by both opex and G&A 8% above...

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SBLK-US (BUY, TP $23) Vessel Acquisition: The Star Shines Stronger (20-page report)

The company adds 16 vessels to one of the largest listed fleets in the industry to create a dry bulk behemoth. The deal is neutral on NAV but adds some value per share in terms of forward NAV and earnings...

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LNG Carriers: The Best Is yet to Come (25 page report)

As expected, LNG Carrier earnings have fallen since the peak in December. The start of the year is nevertheless the best over the past four years and spot rates are 60% above 2017 YTD. We see continuously rising annualized utilization...

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Posted in LNG carriers, shipping | Tagged , , , , , , , | 1 Comment

HUNT-NO (BUY, TP NOK 3.3): Initiation of New VLCC Pure-Play

Mr. Arne Fredly is in the process of re-branding failed Oslo-listed oil service company Hunter Group (former Badger Explorer) into a VLCC pure-play, infusing four VLCC newbuilds plus three optional berths at DSME. Given our view of ~70% asset price appreciation...

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Posted in Oil services, oil tankers, shipping | Tagged , | 1 Comment

Dry Bulk Shipping: Enough Dry Powder Left for the Next Boom (78 page report)

As we stand in the seasonally weakest dry bulk market of the year, we cannot help notice that spot rates YTD are up 25%, 1y time charters are at 3y highs and that FFAs reflect the same. The only pieces...

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Posted in dry bulk, shipping | Tagged , , , , , , , , , , , , , | 3 Comments

LPG Shipping: Imminent Seasonal & Cyclical Upside (31-page report)

We see the cycle turning to expansion in 2018 as supply growth turn negative and annualized demand growth continues around 10%. We also see signs of seasonal factors materializing, including more US LPG available for export, a rising price differential...

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Posted in LPG shipping, shipping, VLGC | Tagged , , , , , , | 10 Comments

TNK (SELL, TP 0.5) 4Q17 Review: Liquidity Concerns Remain

Teekay Tankers posted 4Q17 numbers slightly above or forecast and far above consensus. More important was a liquidity position in-line with our expectations, which assuming a successful refinancing of the Aug/18 balloon payment still leaves the company in a very...

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Posted in oil tankers, shipping | Tagged , , , , , | Leave a comment

GOGL (BUY, TP 12.5) 4Q17 review: Dividends Begin

Golden Ocean declared a $0.10 DPS for 4Q17, spot on our forecast but taking consensus by surprise. The numbers were roughly in-line with our estimates but above consensus. The share price reacted accordingly and ended the day +2.8% d/d in...

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AVANCE (BUY, TP 60) 4Q17 review: Massive upside ahead

The 4Q17 numbers were in-line with expectations, with few surprises emerging in the report or presentation. Avance rallied 7% on the day amongst a general appreciation of the VLGC segment. As we enter the seasonally strong period from April to...

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Posted in LPG shipping, shipping | Tagged , , | 1 Comment

2018: Firing on all Cylinders (26-page report)

Never before have we been so optimistic across all sub-segments of the shipping/oil service sectors simultaneously as we now are for 2018. All segments have either just entered the expansionary phase of the business cycle, or will experience the inflection...

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Posted in _Public, dry bulk, LNG carriers, LPG shipping, Oil services, oil tankers, rig, shipping, VLGC | Tagged , , , , , , , , , , , , , , , , , , , , , , , , , , , | Leave a comment

Oil Tanker Sector Update (SELL): Disappointing Winter Market

Although we cannot rule out another dead cat bounce, this year’s winter market has been disappointing. As we predicted, VLCC spot rates peaked at $32k/d, and volatility created opportunities for the attentive investor. However, oil tanker spot rates have averaged...

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Posted in oil tankers, shipping | Tagged , , , , , , , , , , , | 3 Comments

2020 Bulkers Initiation (Hold, TP NOK 31)

2020 Bulkers is the newly established dry bulk investment vehicle of Mr Tor Olav Trøim (50% ownership), in partnership with Titan Opportunities Fund (20%) and former Clarksons Platou partner Fredrik Halvorsen (20%). We estimate a NAV of NOK 16.3/sh, but...

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LNG Carrier Sector Update (BUY): Earnings Surge to Three-Year High

The dynamics for LNG carriers have changed and the cyclical inflection point is definitively behind us as spot rates surge towards levels not seen in three years. We see utilization rising steadily towards the end of this decade, with corresponding...

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Posted in LNG carriers, shipping | Tagged , , , , , , , , , , | 1 Comment

Suezmax Resales 10% Below Current Valuation

Summary Dong-A Spica & Dong-A Capella said to have been sold @ $48 each to two sperate Greek buyers. 10% below our current generic fair value for a similar vessel, which is under revision for downgrade. Consistent with our September...

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Posted in oil tankers, shipping | Tagged , , , , , , , , , , , | Leave a comment

SBLK-US (BUY, TP 14) 3Q17 Review: Weak 3Q17 but TP unchanged

The 3Q17 report was a bit soft in our view, with average TCE of $9.6k/d vs our 10.7 forecast and G&A $2m higher than expected. Thus, EBITDA of $26m came in below our $35m forecast and consensus at 30m. EPS...

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SHIP-US (BUY, TP 2.9) 3Q17 Review

Highlights: TCE at USD 9.2k/d vs our forecast of 13.5k/d (100% utilization basis). Opex at USD 5.2k/d (+13% q/q) vs our forecast of USD 4.6k/d. Above weakness somewhat mitigated by G&A at USD 1.3m vs our USD 1.6m forecast. EPS...

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BULK-NO (BUY, TP 157) Update: Accretive Fleet Expansion

GoodBulk continues its rapid growth, acquiring seven modern Capesizes from CarVal (Cargill) with options for a further six. We believe the deal is highly accretive to current GoodBulk shareholders (NOK 5.7/sh), with the optionality on six more vessels adding upside....

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GOGL-US (BUY, TP 9.7) Update: Acquisitions & Dividends

Golden Ocean has closed a 11.7m share issuance at USD 8.5/sh to finance the acquisition of two modern Capesizes from Hemen and to raise gross USD 66m in cash. After this latest equity issuance and given the improved market fundamentals,...

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Dry Bulk Sector Update (BUY): Risk/Reward Still Attractive

As we correctly pointed out in mid-April, share prices were likely to be impact from the falling iron ore prices in 2Q. A similar pattern is developing as this report hits the press, and is key to the way forward...

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Oil Tanker Sector Upgraded to HOLD (SELL): Trade on Volatility as Recovery Looms

From being ready to write off the upcoming winter season a very short time ago and looking to mid-2018 for any meaningful recovery in share prices, the recent surge in scrapping has left us with a newfound cautious optimism. Using...

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Posted in oil tankers, shipping | Tagged , , , , , , , , , , , | 2 Comments

Teekay Tankers (SELL, USD 0.7): Challenging liquidity position ahead of the cyclical trough. TP revised down from 1.2

The company recently announced the acquisition of Tanker Investments in an all-share deal on a NAV-for-NAV basis, leaving TNK’s old shareholders with ~68% of the NewCo. The two companies form a natural fit as TNK owns 11% of TIL and...

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Posted in oil tankers, shipping | Tagged , , , , , | Leave a comment

LNG sector update: Improving fundamentals

After more than two years of abysmal earnings, we now expect the worst is finally behind us. Although the recent increase in newbuilding contracting as a cause for concern, we remain confident in medium term improvements in earnings, vessel values...

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LPG-US: Initiation (Neutral, TP 6.9)

Dorian LPG has a fleet of 22 modern Very Large Gas Carriers (VLGC) with four on long time charters and the rest by large exposed to the current lackluster spot market. Recent corporate actions highlights the continued necessity of shoring up...

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Posted in LPG shipping, shipping, VLGC | Tagged , | 4 Comments

BWLPG-NO: Initiation (BUY, TP 37)

BW LPG controls a massive fleet of 51 Very Large Gas Carriers (VLGC) fully delivered in addition to four LGCs. The company has a history that exceeds most of its peers in addition to a differentiating industrial approach to LPG shipping,...

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Posted in LPG shipping, shipping, VLGC | Tagged | 1 Comment

Dry Bulk: Sector Upgraded to BUY

As we argued in our Dry Bulk: Sector Update in early April, share prices had moved too far too fast, disconnecting from the underlying fundamentals of the early expansionary phase of the cycle. We highlighted that the risk was skewed to the...

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AVANCE-NO: Initiation (BUY, TP 28)

Avance Gas has a fleet of 14 Very Large Gas Carriers (VLGC) mainly constructed in China and South Korea. Despite the full spot rate exposure in an abysmal market, the company will retain a robust liquidity position on our estimates ahead...

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Posted in shipping | Tagged , | 4 Comments

TNK-US: Initiation (SELL, TP 1.1)

Teekay Tankers has a fleet of 41 fully owned Suezmaxes and Aframax/LR2s, a 50/50 owned VLCC  in  addition to a handful of chartered in vessels. Despite the recently announced divestment of a 1999-built Aframax at USD 7.5m (vs our generic value at...

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Posted in oil tankers, shipping | Tagged , | 2 Comments

FRO-US: Initiation (SELL, TP 3.2)

Representing the backbone of Mr Fredriksen’s oil tanker investments and spanning two decades, Frontline is still going strong after several transformational years from the verge of bankruptcy in early 2015 to the current sturdy fleet growth and pursuit of M&A possibilities. Although adding a...

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Posted in oil tankers, shipping | Tagged , | 2 Comments

FLNG-NO: Acquires two MEGI NBs (BUY, TP 17 [unch])

Flex LNG announced earlier this week the purchase of two MEGI LNGC newbuildings from Geveran (Mr. Fredriksen) at USD 180m apiece, which we view as attractive vs our generic valuation at USD 194m and as we see significant upside in asset prices over the next few years. The payment structure is 20% on completion of […]

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Posted in LNG carriers, shipping | Tagged , , , | 1 Comment

ALNG-NO: Initiation (BUY, TP 6.9)

The company is too small for most institutional investors, and we see limited prospects for growth. Despite the share illiquidity and stretched liquidity position on our estimates, we believe there is upside to the share price based on the continued massive discount on steel and our positive sector view. We initiate coverage of Awilco LNG with a BUY recommendation and target price of NOK 6.9 (+7%).

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Posted in LNG carriers, shipping | Tagged , , , , , | 1 Comment

HUNT-US: Initiation (Neutral, TP 9.2)

The company recently concluded its inaugural vessels acquisition, purchasing five Capesize vessels (built 2010/11) at an en-bloc consideration of USD 139m (accretive vs our valuation of USD 156m). We expect positive momentum from further fleet growth, increased analyst/investor focus and eventually improved share liquidity. However, this is offset by the current dilutive share class structure. Thus, we initiate coverage of Hunter Maritime Acquisition with a Neutral recommendation and target price of USD 9.2.

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Posted in dry bulk, shipping | Tagged , | 2 Comments

SB-US: Initiation (Neutral, TP 2.4)

The company is fairly priced on steel and has a high elasticity towards changes in asset prices at an opportune moment in the cycle. Additional attractiveness comes from a low cash break-even, although somewhat offset buy a steep fee structure and outstanding preferred shares. Thus, we initiate coverage of Safe Bulkers with a Neutral recommendation and target price of USD 2.4.

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BULK-NS: Initiation (BUY, TP 141)

We initiate coverage of GoodBulk with a BUY recommendation and target price of NOK 141. Share price drivers include current undervaluation, increased analyst/investor focus, further fleet growth and improved liquidity/full stock listing. GoodBulk was newly listed on OTC in Oslo after...

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Posted in dry bulk, shipping | Tagged , | 1 Comment

GOGL-US: Acquires 16 vessels (SELL, TP USD 4.2 [4.0])

Golden Ocean today announced the acquisition of 16 dry bulk vessels for a consideration of USD 127m in shares and USD 285m in assumed debt. The acquisition and its funding structure is in our view a “no-brainer” as the shares were...

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