Sakset fra DNB engelske analyser

GOLDEN OCEAN Close to 30% NAV discount We reiterate our BUY recommendation and NOK95 target price. Based on our view of a steady increase in rates and asset values YOY between 2018e and 2020e, we find the current NAV discount of close to 30% excessive given the company’s robust balance sheet.
2020e net profit raised by 12% due to scrubber earnings. We have lowered our 2018e net profit by 23%, despite Q3 being broadly in line with our forecasts, as we have lowered our Q4 2018 rate assumptions after the recent unexpected rate decline. We have lowered our 2019e net profit by 3% on additional docking days for scrubber installations, while we have raised 2020e net profit by 12% after applying USD5,600/day in scrubber earnings on each of the 20 scrubber orders.
We forecast a steady YOY increase in rates. Capesize rates are USD16.7k/day YTD, up 19% YOY, and we forecast a 2018 average of USD17.3k/day (down from USD19.5k/day due to the recent rate weakness). However, we believe fundamentals support our USD24k/day forecast for 2019 and USD27k/day for 2020.
Low fleet growth. In our sector report published in September 2018 we forecast 2.4% fleet growth in 2019 and 2.8% in 2020. However, adjusting for IMO 2020 disruptions (time spent on scrubber installations, ballast water installation and cleaning of fuel tanks), we arrive at fleet growth of 0.7% for 2019 and 1.5% for 2020.
We have a cautiously optimistic dry bulk tonne-mile demand forecast of 3.5% for 2019–2020, hence rates should increase YOY. We highlight that more than 40% of our growth assumption over 2018–2020 in dry bulk trade is based on coal, and therefore exposed to Chinese energy policy.
BUY recommendation and NOK95 target price reiterated, based on 1.0x (down from 1.05x) our one-year forward NAV/share of NOK95 (previously NOK91) assuming asset values in line with our asset value model where we see 10% upside potential to Capesize resale values. We have narrowed the NAV premium as we believe the stock should be trading closer to its NAV following a sharp increase in asset values over the past year, which has lifted the NAV from NOK46/share in September 2017 to NOK74/share today. The decline in forward rates has lowered our marked-to-market valuation on the leased fleet, partly offsetting of our scrubber valuation. We now apply a USD5.0m gross value for each scrubber and capex of USD2.7m.
BUY