2020 Bulkers (Sell, TP: NOK118.00) - Premium exposure, downside risk
2020 Bulkers continues to offer premium dry bulk exposure, with an 18% run-rate yield on July DPS. However, the company’s pricing remains closely tied to its NAV, which is underpinned by asset values at 15-year highs that are not supported by current freight markets. Hence, we believe risk is largely skewed to the downside, with asset values most likely to converge lower, reflecting what we view as a fragile situation ahead. We reiterate our SELL and have cut our target price to NOK118 (149).2020 Bulkers Ltd is a Bermuda-based owner and operator of cargo ships. The Company owns as subsidiaries 2020 Bulkers I Inc and 2020 Bulkers II Inc in Liberia. Entities are parts to shipbuilding contract with New Times Shipbuilding Co. Ltd. for construction and delivery of Newcastlemax dry bulk vessel. The Company's main shareholders comprise Magni Partners and Titan Opportunities Fund.
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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