Clarkcsons just released their research on AKH:
|Lighting The Path Ahead|
|Aker Horizons is a newly-formed holding company for the renewables and cleantech investments of the Aker Group, which has helped to establish some of the best-performing renewables stocks traded in Oslo, including Aker Carbon Capture and Aker Offshore Wind. The success of these spin-offs from previous Aker entities illustrates the value-creating potential in Horizons, we argue, and owning shares on the holding company level allows investors to participate in potential new ventures at the same terms as the parent company, Aker ASA. We view this exposure, as well as the underlying assets, as an attractive and diversified play on the growing renewables space. We initiate coverage of Aker Horizons with a Buy rating and NOK 62 Target Price, based on a detailed asset-by-asset valuation and including a 20% premium to reflect our view of the near-term potential for significant value creation in upcoming ventures like Aker Clean Hydrogen.|
Aker Horizons is rapidly building a renewables “powerhouse”
Despite having been established in mid-2020, Aker Horizons has built a substantial portfolio of ownership stakes across multiple clean energy technologies including onshore wind, offshore and floating wind, solar, carbon capture, battery materials and soon hydrogen. Aker Horizons recently purchased a 75% stake in Mainstream Renewable Power, which is expected to be the main earnings driver in our forecast period, as the other companies are in earlier stages of development. However, these early-stage companies like Aker Carbon Capture already boast substantial market values, and we believe their medium and long-term earnings outlooks are strong. The inclusion of multiple technologies in one holding company provides investors diversification, and we argue it also offers the portfolio companies relevant experience and relationships for further business development. For Aker Horizons, this cross-technology competence could be useful in the establishment of new strategic ventures as the energy transition continues to drive growth in the renewables economy.
New ventures drive a premium valuation
Key to our valuation thesis, Aker Horizons is expected to continue establishing and spinning-off new ventures in areas like hydrogen, a feature which offers investors exposure to potential pre-listing value creation. While it is difficult to estimate the potential value of such initiatives, we do believe that the stock will trade at a premium to the sum-value of its publicly-listed and private assets, to the extent it continues its recent track record of impressive entrepreneurship.
Initiating at Buy with a NOK 62 Target Price
We initiate coverage of AKH with a Buy rating and a NOK 62 Target Price, reflecting 45% upside potential to current pricing. Our valuation is based on a SOTP calculation of AKH’s listed subsidiaries and associated companies, while we account for potential future growth by allocating a 20% premium to our SOTP estimate, which reflects our expectation that Aker and AKH will continue to unlock potential hidden value through new ventures like Aker Clean Hydrogen.