Another abrupt change

The US Trade Representative on 17 April published revised US port fees with significant changes to the initial proposal based on industry feedback. In its current form, the fees will primarily discourage use of Chinese-controlled maritime trade services to the US, and directly affect the use of Chinese-built vessels in US ports (with several considerable exemptions to avoid harm to US trade). The previous broader fees based on fleet composition and share of Chinese-built vessels has been scrappe...

Ambea (Buy, TP: SEK130.00) - Acquiring Validia Oy

Ambea’s acquisition of Validia Oy, entering the Finnish social care market, makes good sense to us. A post-integration valuation of c7.5x EV/EBITA and tacit ROIC of c13% suggest a solid deal, and consolidating Validia Oy implies 4–5% increases to our 2025–2027e adj. EPS. We see a strong case, with robust demand, solid FCF and financials giving room for share buybacks/dividends and further possible acquisitions. We reiterate our BUY and have raised our target price to SEK130 (123).

‘The times they are a-changin’

The recurring theme at our 18th Energy & Shipping Conference was geopolitical uncertainty and a potential trade war, warranting a wait-and-see approach, particularly on the Trump 2.0 effect. The consensus view pointed to high asset values, with no rush to the yards, aligning with below-NAV valuations across most of our coverage. However, panellists generally saw less downside risk than the 25% average discount to steel for our Tanker, Dry Bulk and Gas coverage. Overall, the day highlighted uncer...

Ambea (Buy, TP: SEK123.00) - In capital-allocation mode

Q4 showed still-solid revenue, earnings and FCF generation, meeting its medium-term >9.5% EBITA margin target (Q4 LTM 9.7%) already 2024. We see a strong case, given: 1) the robust demand outlook combined with an asset-light, cash-generating model; 2) renewed execution on bolt-on acquisitions and dividends/share buybacks; and 3) an attractive valuation at 2025–2027e FCF yields of 9–10%. We reiterate our BUY and have raised our target price to SEK123 (120).

A. P. Møller Mærsk (Sell, TP: DKK10800.00) - Just too many ships

We expect Q4 to mark a turning point, with probable distributions announced and clear downside risk. Simply comparing the ratio of ships to cargo, we find there should be a significant number of ships without work versus 2019, and believe the depth of the downturn has yet to be priced in. We have downgraded to SELL (HOLD) and cut our target price to DKK10,800 (11,700).

Red Sea re-opening is well discounted

Q4 beat and '25 guidance better than feared

A playbook on US tariffs

As a response to recent news flow of potential tariffs and countermeasures, we highlight the main implications for the shipping sectors we cover. While the specifics remain uncertain, the below input might assist in gauging potential impacts of the disruptions.

A. P. Møller Mærsk (Hold, TP: DKK11700.00) - Potential for USD4bn–8bn ...

We expect the Q4 results to reflect continued strength in the container freight market, which picked up further over December–January, and have raised our 2025 forecasts. However, our 2025e EBITDA of USD6.0bn remains 17% below Bloomberg consensus. With guidance likely the main focus, we expect it to target underlying EBITDA of USD4bn–8bn. As vessel oversupply is set to continue hampering rates for a dreary long-term outlook, we reiterate our HOLD and DKK11,700 target price.

A final 2024 guidance upgrade in the making

ABGSC Shipping Daily 29 November

Container spot rates up again 3% w-o-w, contract rates flat, HAUTO signs 2-year contract with a "major international car producer", Flex LNG announces 15yr time charter for Flex Constellation

Ambea AB: 7 directors

Seven Directors at Ambea AB sold/sold after exercising options 131,142 shares at between 97.000SEK and 99.500SEK. The significance rating of the trade was 55/100. Is that information sufficient for you to make an investment decision? This report gives details of those trades and adds context and analysis to them such that you can judge whether these trading decisions are ones worth following. Included in the report is a detailed share price chart which plots discretionary trades by all the com...

Ambea (Buy, TP: SEK120.00) - Margin approaching 9.5% already

Q3 showed continued solid revenue, earnings and FCF generation, with Ambea close to reaching its medium-term >9.5% EBITA margin target (Q3 LTM 9.4%). We see a strong case, given: 1) the robust demand outlook combined with an asset-light, cash-generating model; 2) renewed execution on bolt-on acquisitions and dividends/share buybacks; and 3) an attractive valuation at 2024–2026e FCF yields of 9–11%. We reiterate our BUY and have raised our target price to SEK120 (110).

A. P. Møller Mærsk (Hold, TP: DKK11700.00) - Anchored by challenges

We fail to be excited by the largely pre-announced Q3 and recently revised guidance, but concede the valuation in Maersk looks depressed, albeit for a very good reason. More newbuild orders from the latest cash build mean another delivery wave on top of an already structurally overbuilt industry. We remain muted on the sector and reiterate our HOLD, and have lowered our target price to DKK11,700 (11,500).

New guidance already looks conservative

Solid report; FY guidance looks low

Q3'24 as pre-announced last week. Segments - Beat in all segments. Freight rates better than modelled, share up 1-3%.

A. P. Møller Mærsk (Hold, TP: DKK11500.00) - Likely topping out in Q3

While the Q3 results posted a ~USD1bn beat to our and consensus expectations likely due to stronger container shipping markets, we believe the implications for long-term estimates are limited, as its updated guidance indicates a ~USD2bn QOQ decline for Q4. Hence, the Q3 beat on a stand-alone basis would add up to 4% to the market cap, all else equal.

Guidance upgrade equals 5% of market cap

Q3'24 EBITDA of USD 4.8bn (ABGSCe at USD 4.5, cons. at USD 3.6). Increases full year guidance - Not unexpected. Higher guidance warrants a positive share price reaction.

Q3e EBITDA lifted 32%; consensus too low

YTD container demand growth of 18%. Consensus too low for Q3; potential guidance upgrade for '24. TP of DKK 14,300 (14,550) – BUY.

Ambea (Buy, TP: SEK110.00) - Continued strong execution

Q2 showed continued solid revenue, earnings and FCF growth, with the building blocks to reach the medium-term >9.5% EBITA margin target clearly visible. We see a strong case given: 1) the robust demand outlook, combined with an asset-light, cash-generating model; 2) renewed execution on bolt-on acquisitions and dividends/share buybacks; and 3) an attractive valuation at 2024–2026e FCF yields of 9–12%. We reiterate our BUY and have raised our target price to SEK110 (85).