TotalEnergies is proceeding with its production rights application. Total has applied for environmental authorization as part of the production right application for Block 11B/12B. It is a next step to production on the 11B/12B.

Fearnley Securities note from today

• TotalEnergies takes next step on Block 11B/12B

TotalEnergies has applied for environmental authorization as part of the production right application for Block 11B/12B which is now available for public comment that can be read here. It is positive for AEC which owns indirectly 10% of Block 11B/12B that TotalEnergies moves forward. On our estimates, Block 11B/12B has a NPV of USD 479m risked to AEC. The newly published document highlights that TEEPSA, in addition to bring on producing wells, intends to conduct further exploration on the block with both exploration and appraisal drilling that supports our value for the remaining prospects in the Paddavissie Fairway and Kloofpadda. The proposed development will allow South Africa, as one of top 20 global greenhouse gas emitters, to transition away from its reliance on coal. The next big trigger for the stock will be the disclosure of gas offtake term for Luiperd Phase 1 that we have modelled to USD 48 per boe.

LInk to the TotalEnergies environmental authorization filing:

Click to access 2.%20221128_TEEPSA_ESIA_Block11B12B_NTS_Brochure_Eng.pdf

Disclosure: 

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. Please do your own research before making any investment action.

This is the second installment of our best ideas for 2023. Mintra more than doubled this year, but is still 50% below its IPO price. Sparebank and Pareto analysts have Mintra as one of the top ideas. It is still one of the cheapest against peers, nicely profitable and cash generating, net cash positive, new deal accelerates growth from 1Q23 and two its largest shareholders are most likely about to take Mintra private. The Norweigan take private premiums exceeded 60% this year. Doubling candidate for 2023.

Mintra introduction

• Mintra provides e-training courses for crews on ships and energy platforms
• Mintra was hammered during Covid times as crews stopped rotating. Mintra should be booming now, as shipping and energy have the best times ever
• The share price is up 100% from February low, but the growth of the business will be reflected only with a delay for reasons described below.
• Mintra is reporting on semiannual basis. The 1H22 revenues did not reflect the growth
• Mintra is generating FCF of 80m NOK per year
• Market cap is 900 mil NOK; they have net cash of 100 mil NOK, EV is 800 mil Nok
• Mintra is trading at roughly 3.5 times revenues. Mintra is one of the cheapest stocks in the Scandinavian peer universe.
• Mintra has one of the highest EBITDA margin while trading at one of the lowest EV/Sales multiples vs peers.

• Mintra was listed in late 2020 at 9.7 NOK. The share price is up 100% from February low and trades at 5.0 NOK.
• Mintra shares is accumulated by two Scandinavian investors – Tadjur and Ferd, that own 42%. They are buying stock in the market. They usually work with private companies. Both analysts that cover the stock believe they will take Mintra private.
• Pareto securities showed a slide at this week’s conference that shows that the average going private premium in Scandinavia has been over 60%. This indicates a return potential for the stock

My discussion with the company

The shipping and energy boom is reflected with a delay:

• On some of the contracts, the increase in the use is reflected only with a time delay. The largest customers such as Shell or BP, sign annual contracts, which are flat-fee all you can eat contracts. Such contracts are a minor part of Mintra’s revenues. The increased use of the Mintra e-learning platform is reflected only when the contract is renewed.

• The contracts with other customers have a flat access fee + fee per use. Such contracts reflect the increased traffic faster than the above fixed annual contracts.

• Mintra is gaining new customers. They gain approximately 60 new customers in 1H23.

• The most significant new customer is BSM which operates 650 vessels. Currently, Mintra clients operate 1700 vessels. Such contracts are charged by Mintra per vessel basis. The BSM deal should therefore increase Mintra client fleet by 40% – the maritime revenue increase should be by a similar level. This will be reflected in Mintra numbers during 1Q23.

• The e-learning space has been dominated by three players. Mintra, Netvision (acquired this year by Ocean Technologies), and Adonis. Adonis is losing market share due to its technology handicap. Mintra gained several customers of Adonis recently. The industry is likely to consolidate.

• Mintra two largest shareholders are industrial holdings Todjur and Ferd. They control 42% of Mintra. They are buying in the market. They mostly work with private companies. They wanted to buy Mintra even when it was a private company. It is assumed they will take Mintra private.

• The CEO has 2 mil shares in Mintra; he is in the same boat as the other shareholders. The other shareholders are unlikely to support the buyout unless it is above the IPO issue price.

• The Norwegian buy out premiums this year have been very significant.
See a slide from Pareto presentation from early November 22.

In summary:

• Mintra is cheap vs peers while having one of the highest EBITDA margin vs peers
• Mintra is profitable and is generating strong CFs
• Mintra growth is about to accelerate – just the BSM contract will increase the fleet Mintra provides trainings to by 40%. Onboarding starts on 1/1/23.
• All analysts that cover the stock believe that the two largest shareholders will take Mintra private. Average take private premiums exceed 60%.
• The stock should rerate further in the next 12 months. Either due to the growth acceleration and price re-rating or due to being taken private. Both scenarios should be very good for its shareholders.

Our trading strategy

We are fully invested in Mintra up to our individual stock limit. We believe that 2023 should be the year we exit Mintra. Our base case is the stock should double.

Disclosure: 

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. Please do your own research before making any investment action.

Xbrane is a leading Swedish biosimilar with a 1.9 billion SEK market capitalization and 1.6 billion SEK enterprise value. Xbrane has an EU approval for launch of Ximluci, a Lucentis Biosimilar. The product lunch is scheduled for 1Q2023. Expect material re-rating as the sales come in. 3-4x times return candidate over 2 years horizon.

Norweigan brokers are bullish on Xbrane:

1. DNB has a price target of 160-180 SEK. DNB forecasts 2023 Revenues of 349 million SEK and EBITDA of 100 million SEK.
2. Pareto has a price target of 245 SEK. Pareto forecasts 2023 Revenues of 898 million SEK and EBITDA of 550 million SEK.

Pareto summary of their case for Xbrane:

1. the European launch of Ximluci ahead in Q1 2023,
2. a differentiated platform,
3. outstanding partners,
4. a growing pipeline without growing costs (due to partners),
5. 5-10x undervalued compared to peers Formycon and Alvotech and
6. a good cash position, we see green times ahead for Xbrane’s share price.

We thus reiterate our Buy rating on XBRANE with a target price of SEK 245.

Summary from recent presentations/Capital markets day:

Xbrane product launch strategy for Ximluci (Lucentis biosimilar)

1. Stada is doing all the sales, marketing, and Sales support in Europe
2. Xbrane supports Stada and ensures Stada prepares and invests adequately in the lunch
3. Stada is PE owned, its owners are very commercial. Communication is very good.
4. Xbrane is responsible for the production
5. Xbrane started production already in July (post-patent expiry)
6. The launch is in Q1 next year
7. By then, Xbrane will be in a position to supply Stada with the quantity they require
8. Stada will not start selling in all countries at the same time – the product will be available gradually in all EU countries
9. Lucentis is reimbursed; therefore, its biosimilars are automatically reimbursed in all EU countries where  Lucentis is reimbursed
10. Xbrane presentations include graphs of biosimilars market share penetration in time
11. In general, biosimilars reach market share 60-70% market share within three years
12. Xbrane believes Lucentis will lose 40% of its volumes to biosimilars within 12 months of the launch (as has happened in recent launches of biosimilars in Europe)
13. Xbrane’s base case is that Biosimilars will have 75% share of Lucentis volumes within 3 years. Xbrane believes they will have 1/3 of that = 25% share of Lucentis volumes
14. Xbrane will file the US application before end of this year. It will take 12 months to get it approved. Start of US sales expected in early 2024.
15. Xbrane has a very strong partner for the US – Bausch and Lomb.

Our strategy

We are very bullish on Xbrane. We have a small position now. We will build a material position by the end of Q1. We have made material profits on trading Xbrane in 2021. I believe we will make more significant profits in 2023/24.

Disclosure: 

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. Please do your own research before making any investment action.

Linkfire delivered strong report. It is down 90% since its IPO in 2020. Retail sold the stock on concerns about the capital raisings. The Linkfire recapitalisation happened last week. We have reached bottom, I believe. The company is delivering. One of our top ideas for 2023.

Beating expectations across the line

Linkfire reported a strong Q3’22 report today, that came in above expectations on topline, gross profit and EBITDA. Currency tailwinds continue to help the company, where particularly a strong USD played a great effect in the quarter, but even adjusting for the currency tailwinds growth was strong at ~43% y/y on the topline. More importantly though, the cost reductions that are being implemented are showing good effect, resulting in a 62% EBITDA improvement q/q, which we view as very promising. Main takeaways•    Revenue at DKK 14.6m (up 65% y/y), on a constant currency basis revenue was at ~13m (up 43% y/y)•    Gross profit at DKK 11.4m (78% GM) vs PAS at 9.9m (75% GM). On a constant currency basis the gross profit was 10m, which is a 54% y/y improvement•    EBITDA came in at DKK -6.2m vs PAS at -7.2m, driven by mainly staff reductions and other cost savings•    Linkfire will continue to focus on implementing operational cost-reductions, and has also revised its budget process and is increasing its focus on cash flow metrics•    Net cash flow in the quarter was DKK 0.4m, driven by a large goodwill write down, significantly positive WC due to increases in contract liabilities and trade payables and some proceeds from borrowings•    All in all, a strong report from Linkfire, that shows that the company is on the right track to reach full year profitability for FY’23•    Webcast at 10.00 CET, link here Company specific metrics•    Consumer connections up 51% y/y at ~577m, RPM on a constant currency basis down y/y to DKK 6.46 (8.62), as a result of increased partner traffic that is not yet optimized for monetization

Africa Energy announced dry well on 2B prospect. Pareto: “The Gazania-1 exploration well was dry, lowering our risked valuation by SEK 0.5/share or ~10%. We find the ~40% negative share price reaction excessive.. The main value driver in Africa Energy remains progress on the development of its discovered resources on Block 11B/12B offshore South Africa. To our understanding, operator TotalEnergies is pushing for the project to supply gas-to-power (better ESG story), prolonging time to reach a final deal on gas sales, now expected in early 2023. We find the current valuation to be an attractive entry point and think the current pricing can trigger M&A interest.“

Pareto research front page summary:

Unfortunate, but no dealbreaker (BUY reiterated)

The Gazania-1 exploration well was dry, lowering our risked valuation by SEK 0.5/share or ~10%. We find the ~40% negative share price reaction excessive considering Africa Energy’s limited spend on the prospect (USD 5m cost vs USD 150m valuation impact). The main value driver in Africa Energy remains progress on the development of its discovered resources on Block 11B/12B offshore South Africa. To our understanding, operator TotalEnergies is pushing for the project to supply gas-to-power (better ESG story), prolonging time to reach a final deal on gas sales, now expected in early 2023. We find the current valuation to be an attractive entry point and think the current pricing can trigger M&A interest. BUY reiterated – TP down to SEK 3.60 (4.50) due to the dry well, higher WACC for all our covered companies and a potential modest funding need.   Dry well at Gazania-1 exploration prospect The exploration well targeting the Gazania-1 prospect on Block 2B offshore South Africa was dry. We valued the upside potential of SEK 2.5-3.0/share at SEK 0.5/share in our risked valuation (NAV), which makes the negative SEK 1.60/share price excessive in our view. For context, Africa Energy spent USD 5m on the well compared to a negative valuation impact of USD 150m. Garzania-1 should be seen as an option (created by AEC at limited cost) that disappointed, but now also creates an attractive entry point for due to the large share price decline. Progress on the development of Block 11B/12B is still the main value driver The main value driver in Africa Energy remains progress on the development of the vast gas discoveries offshore South Africa. We had hoped for a gas sales agreement this year after the Application for Production Right was submitted in Sept’22. However, our understanding is that operator TotalEnergies is pushing for improved economics and inclusion of gas to power as part of the development. Agreement is expected early next year. If realized, this will build a stronger ESG story as South Africa today gets 80-90% of its power from coal and are experiencing regular blackouts. Target Price down to SEK 3.6/share – BUY reiterated  We estimate Africa Energy’s risked valuation (NAV) at SEK 3.6/share based on a long-term gas price of USD 7/mcf in South Africa and WACC of 15%, which is up from 10% to reflect higher global interest rates. Still, this implies that Africa Energy trades at a 55% discount to our SOTP. Combined with increased interest for gas resources, we think this makes Africa Energy an increasingly attractive acquisition candidate. We continue to think that M&A is most likely post securing the gas sales contract which should also trigger a repricing of the stock. However, current strong energy prices may move potential M&A forward in time. Africa Energy had USD 7m of cash at the end of Q3 and Gazania-1 cost the company USD 5m due to extended drilling time (Africa Energy was carried by partners if drilling had stayed on time). This is likely to trigger a modest need for capital, reduced by the company’s low-cost base of USD 1.0-1.5m/quarter (1 year of G&A equal less than 3% of market cap), that we think can be easily secured form the company’s historically supportive shareholder base. We lower our TP to SEK 3.60 (4.50) and reiterate our BUY recommendation.

Disclosure: 

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. Please do your own research before making any investment action.

Norway introduced Salmon Tax, that would affect the whole Norwegian Salmon industry at the end of September. Share prices went down by 30-40%. The opposition attacked the measure. Minister of Finance is meeting the largest Salmon producers this Friday. The tax consultations are due to be completed by 4th January. Tax compromise is very likely.

Our family office bought into the trade. 2/3 of the position is Salmar, 1/3 of the position is Mowi. Our target upside is 20%. Investment horizont is 4-6 weeks.

Disclosure: 

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. Please do your own research before making any investment action.

This has been a good quarter, and our business activities progressed as expected

Main highlights:

• Skive progressing well
• The rollout of the next generation large-scale plant called Mkt 2 on track
• Progress in the UK
• Construction of Esbjerg on track
• On track with our goal to initiate two large projects per year

Saipem cooperation moving ahead – generated significant interest from major petrochemical companies

Skive is moving forward with confidence

• Skive continues to progress in operating costs, capacity, and stability
• All four lines are now equipped with self-generated gas (NCG) heating – this improvement has significantly improved our operating costs and CO2 emissions
• Positive cash flow in Q4 2022
• New offtake agreement renegotiated and improved
• Two lines are used for testing, and two lines are for production
• See my previous post – Quantafuel: “We are running at utilization levels we never achieved before” for further details

Dubai

• The final decision on Dubai FEED study – final investment decision early next year

Sunderland

• Approval of planning application expected early next year
• Started negotiations with feedstock suppliers
• CBRE financial advisor engaged to secure funding commitments

Kristianslund

• Limitations in available feedstock result in positive cash flow by mid-2023
• A negative result of only 5 million NOK in 1H23

Esbjerg

• Denmark has no such sourcing facility today – a game changer for Denmark + key advantage for the large chemical recycling plant
• Construction is progressing within the schedule
• Commissioning in late 2023
• Trying to structure financing at Esbjerg level – limited funds should be needed from QFUEL

My take.

Positive quarter. All projects are progressing well. Saipem is a big deal. It generated significant interest in QFUEL from big global players. QFUEL is very cheap now, it is trading at levels well before Skive got into operation. I hear rumors that one of the big players may take up the whole financing. If that is true, big positive for QFUEL. We are buyers. The risk now is, that one of the large players would take the company private. We would at these levels.

Disclosure: 

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. Please do your own research before making any investment action.

How to visit Skive

I spoke to Quantafuel last week briefly. They said several things that they said before, but may not be fully reflected or understood by the market. I am posting below my interpretation of some of the comments.

Quantafuel set up a page with videos from Skive. Basically short guided tour of Skive. Recommended. Link below:

https://www.quantafuel.com/media#/videos

Our take from the conversation:

Skive

• Two lines are running close to full capacity – as stated in the press release last week.
• QFUEL have never reached that level of utilization before. Major improvement vs utilizations they achieved for example when they announced Proof of Concept. Anyone can compare the figures from the Proof of Concept press release with the utilization figures released last week.
• The other two lines should be in operation in the second half of November. Therefore, in December QFUEL should be running on all four lines.
• Automatization of the process is increasing. That will increase the efficiency and reduce interruptions.
• As Lars said on Q2 call Skive importance is in generating QFUEL knowhow that distinguishes QFUEL from its competitors. The next generation plants will be a lot simpler but would not be possible without Skive learnings.
• Skive should be self sufficient to run on pyrolysis gasses (NCG). That is a major step forward, that enables a positive cash generation in Skive. This issue was discussed in several analysts reports. Pareto in their report from 31/10/22 stated: “The upgrade (to NCG) is likely to significantly reduce the opex at Skive, which we believe will lead to improved margins and ultimately cash flow positive operations from Skive in December“
• I saw on Twitter a post by a Skive engineer that was asking his circle for electricity generator that can run on special gasses. That indicates that Skive may produce excess gasses to generate electricity.
• Skive has no problem to source plastic – there is a lot of plastic offered.

Saipem licensing deal is a big deal

• “Saipem is the best news ever – they are giving their brand name behind.”
• The market did not fully appreciate how important the deal is

Dubai is progressing well

Disclosure: 

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. Please do your own research before making any investment action.

Fearnley Securities published an update on Africa Energy. Very bullish report. I enclose below my summary of their main points from the 18 page long research:

From E To E&P In Global Hotspot

Entering development in South Africa at Block 11B/12B and Block 2B. Drilling of Gazania-1 a major short-term trigger. A discovery could fast track development at Block 2B.

“A new world-class gas and oil play” is what TotalEnergies (TTE) named the Brulpadda discovery in 2019. Then, a year later TTE discovered the even larger Luiperd. Both discoveries are in Paddavissie Fairway at the massive Block 11B/12B (19,000 km2) offshore South Africa. AEC has an indirect 10% WI in Block 11B/12B, that are moving into development (Production Right filed) under the attractive South African tax law. AEC will stay in for development that in full could bring a NPV of USD 300-400m (Phase I and II). Furthermore, Gazania-1 is currently being drilled at Block 2B, the same basin as TTE`s 1.4bnboe Venus discovery. We argue a Gazania project could bring a NPV of USD 484-806m, vs. the MCap of USD 327m. We estimate NAV of USD 868m (Unrisked 1,687m), and raise our TP to SEK 5.0/sh (SEK 4.5/sh, 09.03.2021) based on AEC`s promising development opportunities in South Africa. Buy reiterated with 92% upside to TP.   Short-term triggers ahead A major trigger is the disclosure of commercial gas terms (host government sole offtaker) for the Luiperd EPS project that we conservatively estimate to USD 40/boe. As South Africa is currently 90% powered by coal, the Luiperd project is also a play opener for a South African gas market. Another major trigger is the results of Gazania-1 drilling that is expected mid-November. A discovery in line with our expectations (gross 349 mmboe) would serve as catalyst for the share price. Though we believe AEC will stay in for development at both Block 2B and 11B/12B, potential exits are possible to finance further exploration or development at AEC`s “preferred” block. We see a partial farm-out at Block 2B as most likely, as the field partners need a more mature operator with a track record.   Valuation – Buy TP SEK 5/sh Our NAV-based valuation at 10% WACC derives our TP of SEK 5/sh. We base the valuation on three developments in South Africa at Blocks 2B & 11B/12B. The un-risked value potential under our base case reserve estimate (net 405mmboe WI) comes out at SEK 9.7 /sh, though we stress that positive revisions to these estimates hold the potential to lift that figure meaningfully higher.

Other Recent Investments:

We have entered back into Xbrane today in the capital increase transaction. We have also subscribed to the new shares of Biovica. I wrote here several times on these opportunities, see previous blog posts for details.

Disclosure: 

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. Please do your own research before making any investment action.

Pareto publish their Top Ideas portfolios for Norway and Sweeden. I select from their top 20 stock ideas the ones we like:

Pareto Ideas Summary:

BioInvent – BUY, TP SEK 134 (115)
Closing Q2 with liquid funds of SEK 1.2 bn + SEK 536m from the Exelixis milestone payment and the latest directed issue to specialists like Forbion (so total of SEK 1.7 bn), BINV is among the best capitalized biotech companies in Europe backed by one of the best shareholder bases. After a series of positive clinical trial data in both liquid and solid tumors in 2021 and 2022, BioInvent continued to deliver new clinical data in September with the most exciting (based on scientific rationale and in-vivo & human PK/PD data) program BI-1808 (TNFR2 targeting antibody) having its first safety and single-agent efficacy data released. Based on these progresses we released an update on Sep 26 and increased our target price to SEK 134 (115). We expect that pipeline progression and strong cash position to keep the share price stable in tough times (as it did this year) and to increase when healthcare indices stabilize and even more so if they experience a bit of a relief rally.

Vicore Pharma – BUY, TP SEK 97
In the middle of VICO’s 108% YTD rally on the basis of stellar data in IPF patients, VICO’s share price took a volatile break in September. The COVID-19 program termination induced a -30% stock reaction, which was a great trading opportunity as we pointed out in our newsflash on Sep 21, and then the stock went back up closing September neutrally. After this volatile break, the stock is poised to continue much further in October and November. Why? We expect an IPF readout in late October / early November, analogue to February’s but with close to x2 as many patients, which will cement the drug’s profile in our view (due to the very high, unprecedented effect size reported in these patients i.e. lung function gains in the hundreds of milliliters). As a reminder, drug sales in IPF reached around USD 4 bn last year, comprised of two drugs, one from Roche (Esbriet) and one from Boehringer Ingelheim (Ofev). Despite the two drugs on the market, the median survival after diagnosis is 3-5 years (the drugs are only slightly slowing the decline in lung function in a fraction ). Vicore’s drug, for the first time ever, has shown gain in lung functions in IPF patients that reached the hundreds of milliliters / instead of short-term stabilization or slower decline as competitors. The efficacy demonstrated by Vicore’s drug in the February 2022 readout drug showed a lung function gain of +251mL at week 24 & +751 mL at week 36 – unprecedented and we believe this will soon be further reinforced.

HAFNI – BUY, TP NOK 60
Product tanker rates have gone through the roof as the Ukraine war is sending much-needed diesel volumes long-haul while inventories are running dangerously low. Hafnia delivered a solid Q2 (run-rate P/E 3x) as MRs just finished their best quarter since Q4’04. Q3 will be even better and bookings suggest Q3 EPS of USD 0.53 for run-rate P/E 2x in HAFNI – which alone beats out the mayhem we saw during 2020. Our current NAV of NOK 57 is pushed towards NOK 70 by YE’22 when including Q4 earnings and values up 5% (which might already be history). 2023 estimates are down ~20% y/y despite a healthy tonne-mile demand outlook and virtually no fleet growth – and will be revised higher. The Russia-switch of 1m bpd have not really starting impacting yet, with sanctions coming into force 5 Feb 2023 – and Hafnia is perfectly positioned with a large and healthy levered fleet. BUY / TP NOK60

KOG – BUY, TP NOK 375

We include KOG in our monthly portfolio amid upbeat earnings potential near-term, along with massive contract potential and attractive financials long-term. For Q3, we expect higher activity levels for KM, and positive product mix for KDA to secure solid earnings. With a >NOK 53bn firm backlog and a solid balance sheet, rising defence budgets and improving maritime business, nearly all stars are aligned for KOG. As such, market fundamentals are supportive, and profitable growth set to carry on for the longer. While capital allocation suggests increasing shareholder return ahead. Therefore, risk-reward are on the upside, in our view, where KOG is attractive in an increasingly uncertain world. BUY / TP NOK 375

Disclosure: 

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. Please do your own research before making any investment action.