Klaveness Combination Carriers (Buy, TP: NOK137.00) - Harvesting stead...

The Q1 report revealed strong operations to maximise the value of the company’s unique three-legged market position, providing attractive exposure to upside potential in strong shipping markets, while diversifying possible downside risk. Bulkers and tankers are seeing a constructive supply story over the coming years, while regulations monetise KCC’s unrivalled efficiency. Thus, we find KCC remains undervalued and we reiterate our BUY. We have raised our target price to NOK137 (124).

Continue to trade where rates are best

Q2e up on guidance, reiterating our long-term outlook. ABGSCe 47% above cons. for ’25e net profit. TP NOK 156 (147) – P/NAV 0.90x.

Much as expected

Q1'24 EBITDA of USD 38m, TCE pre-announced. Q2'24 average fleet TCE earnings in-line with ABGSCe. Much as expected, stock flat today.

Yard response and dry bulk qualms

Our trip to South Korea and China revealed Chinese shipbuilders are seeking growth to take on Korea’s established yards who are facing constraints. An eagerness to add capacity is one of our takeaways, as well as a gloomy outlook for Chinese real estate, which in our view should inevitably weigh on dry bulk demand.

Dry bulk: It's the fleet growth, stupid!

Rates have now appreciated, but new orders have not followed, and low fleet growth is enough for continued optimism.

More upside from the dry bulk market

It's the fleet growth, stupid! ABGSCe 46% above cons. for ’25e net profit. TP NOK 147 (125) – P/NAV 0.91x.

A brewing challenge for the yards

Our 17th Annual Energy & Shipping Conference was well attended by investors and industry executives showcasing the still-growing interest for the sectors. Limited yard capacity is fuelling high newbuilding prices and raising freight rate expectations for the vast fleet renewal necessary in the coming decade. Long lead times underpin a bullish supply story for much of shipping in the coming years, albeit exposed to geopolitical risks affecting trade patterns. Our overall impression was general op...

Klaveness Combination Carriers (Buy, TP: NOK124.00) - Superior, high-q...

Despite negative revisions for our 2024e, we continue to believe KCC is still set for superior yields compared to its tanker and dry bulk peers, while retaining dynamic exposure to both dry bulk and product tanker markets and a superior risk profile. We reiterate our BUY, but have trimmed our target price to NOK124 (127).

Klaveness Combination Carriers (Buy, TP: NOK127.00) - Extending its st...

KCC looks set to report another quarter of strong earnings amid soaring product tanker rates and healthy dry bulk earnings, solidifying its solid distribution potential. Also, the valuation has improved to a P/NAV of ~0.9x (0.6–0.7x historically), as solid cash-generation capacity comes in to focus, in our view. We reiterate our BUY and have raised our target price to NOK127 (100).

Klaveness Combination Carriers (Buy, TP: NOK100.00) - Combination trad...

Q3 was another strong quarter, with a big dividend beat and ~15% run-rate yield. We see upside potential from KCC’s caustic soda shipment fixtures for 2024, which have generated sound returns for its CABUs YTD, and from the effects of KCC shifting more of its exposure to tanker trading (guided at 65–70% for 2024), which we believe is ‘by the book’ and raises its earnings potential for the year. We reiterate our BUY and NOK100 target price.

Klaveness Combination Carriers (Buy, TP: NOK100.00) - Delayed dry bulk...

While the product tanker market is firing on all cylinders, we have pushed our expectation of a meaningful dry bulk rebound into 2026. We still find KCC well placed, with exposure to strong product tanker rates and healthy mid-size bulker markets. We now find its return potential more modestly priced at a dividend yield of ~11%, EV/EBITDA of 7x, and P/E of 6.8x on our 2024–2025e. We reiterate our BUY, but have lowered our target price to NOK100 (104). The Q3 results are due at 07:00 CET on 31 Oc...

Klaveness Combination Carriers (Buy, TP: NOK104.00) - Delivering on hi...

Our slight estimate revisions leave us ~25% below 2024–2025e consensus EBITDA, which has KCC trading at an average EV/EBITDA of 4.2x (6.2x on our estimates). This implies FCF covering ~36% of the current EV despite the newbuild capex, and using current dry bulk and clean tanker spot rates for all of 2024 (roughly in line with our estimates) still suggests a DPS of USD0.75. This would be a meaningful 12% yield in the current market and a bullish outlook. We reiterate our BUY, but have cut our tar...

Northern Lights

Klaveness Combination Carriers (Buy, TP: NOK109.00) - Tanker trade pro...

The value of KCC’s business model is being brought into the light as soft dry bulk values are dragging on peer group NAVs, while its NOK114/share NAV (0.64x P/NAV) is largely unchanged since end-Q1 on still-strong tanker values. We believe softer H2 dry bulk prospects could incentivise KCC to shift more exposure into the tanker trade, and boost earnings with further upside to a strong product tanker rate forward curve. We reiterate our BUY, but have cut our target price to NOK109 (116), mainly o...

Klaveness Combination Carriers (No_rec, TP: NOK) - Recommendation and ...

Given DNB Markets acted as Joint Bookrunner in the recent private placement and will act as Manager in the contemplated subsequent offering of shares, we have withdrawn our recommendation and target price on Klaveness Combination Carriers.

Klaveness Combination Carriers (Buy, TP: NOK136.00) - Dynamic dual exp...

KCC’s Q1 results were mostly pre-announced, but the share price rose on the strong proposed DPS of USD0.40 for Q1 (23% run-rate yield) offsetting softer CLEANBU fixtures. This weighs on our near-term estimates prior to an expected bounce-back in Q3. Still, we consider KCC undervalued at a P/NAV of 0.58x and 2023–2025e EV/EBITDA of 4.7x, and we note dynamic dual exposure to bullish long-term market fundamentals for dry bulk and tanker. We reiterate our BUY and have raised our target price to NOK1...

Northern Lights

Northern Lights

Klaveness Combination Carriers (Buy, TP: NOK132.00) - Clean tanker tai...

Clean tanker tailwinds

Generally an optimistic bunch

DNB hosted its 16th annual Energy & Shipping Conference. On day two, we hosted sector panels and presentations for dry bulk, LPG, car carriers, LNG and tankers with senior management representatives from 29 shipping companies. A resurging Chinese economy coupled with tight supply outlook, strong demand growth potential and regulations putting pressure to remove older vessels were among the common themes. Overall, the discussions showcase optimism across the sectors.