HAV – Buyback, Strong CF and Hiked Margin Guidance. Update from Kyoto Investor Day

HAV Group (HAV) reported another strong quarterly results. I enclose below a summary from Fearnley report today. I also include a brief summary of Kyoto Group capital market day. Finally, I enclose Pareto take on Bioinvent short term opportunity. Pareto analyst is very bullish Bioinvent, so we are.

Top ideas from Fearnley Energy conference 24/11/21:

In the introduction, Fearnley analysts presented a few top ideas – interesting investment cases that presented in the conference. The below were mentioned:

  • Scatec Solar – analysts likes Scatec diversification into hydro. Buy with PT 195
  • Kyoto Group – thermal energy batteries producer, that last week announced its first sales. Buy with PT 90
  • Acer Carbon Capture – sell recommendation due to recent high price appreciation – it now trades at 4 times 2025 sales.
  • Technip Energies – trading at cheap multiples. PT 21 EURO. Trades at 9xP/E. Similar companies trade at 15x P/E. It is a doubling candidate.

HAV Q3 Report – Fearnley securities summary:

The bold emphasis added.

HAV Group (Buy, TP NOK 25)

All in all, a solid report from HAV this morning, with continued strong cash flow and hiked margin guidance. HAV reported 3q21 revenues of NOK 81m, which is down from NOK 304m last quarter and well below our NOK 147m estimate with the drop largely due to less trading. EBITDA was NOK 14.5m, in-line with FSest. NOK 14m. Else, we note continued strong cash flows with YTD FCF of NOK 229m (incl. NOK 162m in WC movements), which increased HAV’s cash position to NOK 406m from NOK 334m last quarter. Notably, HAV has managed to increase its cash position by NOK >370m YTD. External backlog now totals NOK 542m, which is up from NOK 468m last quarter providing strong visibility going forward. The increase follows strong orders in NES and NGT, partly offset by a drop in HAV Design.

On the outlook, HAV sees continued strong fundamentals for maritime cleantech. Further, HAV maintains the NOK 850-950m revenue target, which is in-line with FSest. NOK 905m. However, with a YTD EBIT of NOK 67m, HAV expects the full-year EBIT margin to be in-line with YTD 3q21, meaning roughly 10% vs. previous guiding at c. 7%. As such, we expect to see strong numbers coming out of 4q21. Note, at the midpoint, this implies NOK 207m in revenues for 4q21 and NOK 20m in EBIT to bring full-year EBIT in-line with YTD margins. This compares to FSest. NOK 12m in EBIT for 4q21, and we thus see some 11% upside on our FY’21 EBIT estimate.

Further, we highlight the announcement that HYARD (owns c. 66% of the shares in HAV) announced to distribute an extraordinary dividend of up to 50% of its holding in HAV (subject to EGM on Dec-14th). Distributed is expected to shareholders on Dec-27th. I.e., HYARD is going to offer up to 33% of the total shares in the company, meaning that HYARD’s ownership in HAV will max. go down to c. 33% from the current 66.46%. Whilst we expect some downwards sales pressure on HAV, very positive longer-term in terms of increasing liquidity (free float will increase by up to 33%). Notably, HAV announced this morning a 3.5m share-buyback programme representing c. 10% of shares outstanding in the company

The company is presenting today at 10.00 CET. The reply is available from their www. Link below: https://channel.royalcast.com/landingpage/hegnarmedia/20211126_1/

Link to their Q3 presentation:

Update from Kyoto Group Investor day on 25/11/21

Fearnley Securities summary:

Kyoto Group (Buy, TP NOK 90/sh)

  • Recap from the Capital Markets Day

Kyoto held their capital markets day yesterday at Salt in Oslo with an update on the market and on operational progress. Importantly, the company secured their first contract with Aalborg Forsyning this week for the installation of the first battery at Nordjyllandsværket (NJV). NJV is one three coal fired power plants in Denmark providing around 1.4 TWh of heat and power annually. The plant has committed to phasing out coal by 2028. In terms of near-term growth, KYOTO highlights the metal- and energy industry as prospects in Europe. Further, the initial target markets are Norway, Denmark, UK, Germany and Spain.

The company has set an ambitious target towards 2025 reaching several hundred batteries installed, CAPEX < 40 EUR/kWh and being a billion NOK revenue company. In terms of key developments on the way, we note a doubling of the organization next year, explore M&A opportunities and financing and develop the next generation of the Heatcube.

Pareto Securities update on Bioinvent

BINV – BioInvent, Buy TP SEK 115: We continue to see a unique and short-lived discount to BioInvent’s share price due to two bigger upcoming triggers in December (possibly 11-13th and latest on 17th). In December we will get additional data from BINV’s lead drug BI-1206 in two programs. BI-1206 showed strong data in NHL in January and a bit more this November, which makes as confident that the higher dose cohorts to be reported in December will be (at least as) positive too. Further, based on insights from a Novartis-Beigene drug Tislelizumab, an anti-PD-1 checkpoint inhibitor with Fcγ interaction-minimizing properties, we are confident that BI-1206+Pembrolizumab (Keytruda) will have an effect in the much bigger area of solid tumors (data to be reported on December 17th). We re-iterate our Buy rating with a TP of SEK 115.

Bioinvent invited investors to their Key Opinion Leader Webinar on BI-1206. Registration link below:

Our family office is long all three stocks

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The goal of the blog is to provide investment ideas for further research. I/we have a beneficial position in the shares discussed above either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it. I have no business relationship with any company whose stock is mentioned in this article. The article does not represent investment advice.

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