Hunter Group (Buy, TP: NOK3.60) - Asset sales could unlock value
We have updated our estimates to reflect near-term rate revisions and updated fuel spreads. For Q1, we expect EBITDA of USD3.8m, 12% below Bloomberg consensus (results due prior to market open on 26 May). In our view, recent speculation about a potential divestment of Hunter Group’s remaining VLCCs for USD95m each underlines the potential value in the stock – we calculate this would equate to a NAV/share of NOK3.9. Hence, we have upgraded to BUY (HOLD) and lifted our target price to NOK3.6 (3.1).Hunter Group is developing the Badger Explorer, a revolutionary technology for exploration and verification of hydrocarbon prospects, without the risks, cost and complexity of drilling an exploration well with a rig. The Badger Explorer tool acquires exploration data as it drills, and once installed at its target depth, can continue to monitor subsurface parameters to enhance development and production activities.
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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