Tag Archives: seanergy maritime

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 adj. -0.13 vs our forecast of +0.02, after adjusting for a USD 11.4m one-off related to debt repayment
  • TP upgraded to USD 2.9/sh (from 2.7)

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SHIP-US: Initiation (BUY, TP 1.25)

We initiate coverage of Seanergy Maritime with a BUY recommendation and target price of USD 1.25.

The company has made some very attractive acquisitions at the bottom of the cycle, one example being the two 2010-built Korean Capes which have appreciated ~60% since the deal was announced six months ago.

We see recent equity issuances as accretive given the appreciation of asset prices. However, we believe a discount on the company vs peers is just given several factors; including the At-The-Market (ATM) program, recent fee structure, the class A Warrants and share illiquidity.

Valuation: Our target price of USD 1.25/sh is based on a NAV of USD 0.94/sh, but added value from the optionality of a further 10% increase in asset values which would equate to a NAV of 1.67/sh, and applying a 25% discount. The implied asset value elasticity of NAV is 79% in our calculations, which is attractive given our view of rising asset prices, but equally sensitive on the downside... We recommend the less risk averse investor to BUY the share.

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