2020 Bulkers (Buy, TP: NOK113.00) - Atypical strength to endure
Ahead of the Q1 report, we have raised our 2021e EBITDA by 12% on Capesize’s atypical strength. China has driven demand YTD, as illustrated by elevated domestic prices for iron ore and steel, while thermal electricity generation has gained share and outpaced domestic production. We find the relative cost of freight supportive of TCE freight rates and expect the global GDP recovery to outpace the normalisation of Chinese growth rates for the rest of 2021e. We reiterate our BUY but have lifted our target price to NOK113 (78).
DNB Markets is the investment banking arm of DNB Bank ASA and is focused primarily on the Nordic region, as well as internationally on niches such as global shipping, energy and related services, and seafood. DNB Markets offers services in FICC, Equities and Investment Banking advisory from offices in Oslo, Stockholm, London, Singapore and New York. Equity research coverage is offered on c250 Nordic companies. DNB was ranked no.2 in Extel Nordic Research 2017. The DNB Markets’ Credit and FICC Macro & FX Research teams are repeatedly highly rated by Prospera Nordic Institutional Investor Surveys.
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