Klaveness Combination Carriers (Buy, TP: NOK112.00) - Set for tanker tailwinds
In our view, KCC’s business model is looking increasingly attractive amid macroeconomic uncertainty and more stringent fuel regulations. Furthermore, it maintains exposure to what we consider favourable tanker markets with potential positive catalysts (e.g. successful enforcement of sanctions and increasing OPEC+ volumes), while the market concerns about potential reversals of initially positive disruptions seem overdone. We reiterate our BUY, but have cut our target price to NOK112 (125).Klaveness Combination Carriers AS is a Norway-based fleet operator. The Company owns and operates combination carriers that can switch between dry and wet cargo shipments. Its fleet consists of approximately nine CABU (caustic soda/bulk carrier) vessels with the capacity to transport from approximately 72,500 deadweight tonnage (DWT) up to approximately 80,500 DWT of caustic soda solution (CSS), floating fertilizer (UAN) and molasses, as well as all form of dry bulk commodities. Furthermore, the Company has newbuilding orders for CLEANBU (clean petroleum/bulk carrier) vessels that in addition to transporting caustic soda and dry bulk products can also transport clean petroleum products. The Company's vessels operate on international trade routes, mainly in the Far East, the Middle East, Australia, Brazil and North America.
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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