ONE WEEK trade in AKH and AKSO

AKSO – Buy ahead of CMD
Trading update today with strong underlying figures, but COVID-related one offs of NOK 350m appears to steal the headline as the stock is trading 4% lower. There is no continuation of these one-offs into 1Q20 according to the company. We believe AKSO has taken out the trash ahead of the CMD and Q4 results on 15 Feb, so focus will forward-looking on Renewables and potential dividends. Underlying EBITDA today was NOK 470 vs 354m consensus. Order intake was NOK 6.8bn vs 6.6bn our estimate. Today’s update was all backward-looking, at the CMD on 15 Feb we expect focus will be on the strong project pipeline within subsea (NCS and Brazil) and renewables through Aker Carbon Capture and Aker Offshore Wind. The pipeline has grown to NOK 76bn from 42bn largely due to renewables and low carbon projects. Through an improved revenue profile; NOK 1.5bn in cost synergies; and 60% reduction in capex, we expect NOK 600m/1.1bn FCF 2021/22 which together with NOK 450m net cash paves the way for a 2021 dividend. Buy ahead of 15 Feb.

AKH – Buy ahead of AKER’s Q420
On 17 Feb, AKER will announce their new clean hydrogen venture ‘Aker Clean Hydrogen’ which will sit in Aker Horizon’s portfolio. Current NAV in AKH is NOK 24/share vs 43 share price. However, that assumes MRP is booked at cost. If we use peer group pricing on MRP, AKH’s NAV increases to NOK 47/share which includes zero value on Aker Clean Hydrogen, only NOK 100m on Rainpower and zero value on SuperNode. We believe Aker Clean Hydrogen will increase NAV further following the announcement on 17 Feb. Additionally, we see potential for a lot of newsflow from portfolio companies near-term, especially the ones which have yet to be listed. Worth a look.

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