Elkem (Hold, TP: NOK30.00) - Q4 sets the pace for 2021e
The Q4 report was somewhat above consensus, and received a mixed market reaction on the reporting day, after its share price had risen c20% over the previous 10 trading days. We have lifted our 2021–2022e EPS by 4–5% to reflect the solid Q4 for the Silicon Products segment, alongside the strengthening of silicon and ferrosilicon prices in recent weeks. Based on this, we have raised our target price to NOK30 (28). We reiterate our HOLD as we believe the current share price looks fair given a silicone price of RMB21,000/t, which we consider a sustainable level.Elkem ASA. Elkem ASA is a Norway-based supplier of silicon materials. Its operations comprise such segments as the Silicones that manufactures and sells siloxanes, a range of silicones, and a commoditized products produced by reacting silicon with methyl chloride through various chemical reactions and formulations; the Silicon Materials, which includes manufacturing and selling of various grades of metallurgical silicon and microsilica; the Foundry Products that provides metal treatment solutions to iron foundries and supplies specialty ferrosilicon to the steel industry, and the Carbon, which manufactures carbon electrode materials, lining materials and specialty carbon products for metallurgical processes. The Company serves customers in chemical, solar, electronics, aluminum, construction, refractory, oil and gas industries worldwide.
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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