2020 Bulkers (Sell, TP: NOK154.00) - Price surge adds downside risk
Recent strength in the dry bulk market combined with an even stronger share price performance leaves current pricing with material downside potential, in our view. Despite its impressive financial strength after asset sales and refinancing, we question the longevity of China’s record-high run-rate import demand, and find the elevated asset values and strong NAV valuations a fragile situation in months ahead. Hence, we have downgraded to SELL (HOLD), but have raised our target price to NOK154 (150) on recent market tailwinds.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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