Index Rebal/Special Situations, Quiddity Advisors

Janaghan Jeyakumar, CFA

Index Rebal/Special Situations

Quiddity Advisors

Pan-Asia Catalysts/Events

Event-Driven

<ul>
<li>In this insight, we take a look at the names leading the race to become ADDs/DELs for the STOXX Europe 600 and EURO STOXX Indices for the September 2022 Rebalance.</li>
<li>Based on current rankings, there could be around 11 ADDs/DELs in the September 2022 Rebalance.</li>
<li>The completion of the <a href="https://www.smartkarma.com/entities/avast-plc" target="_blank" data-smartkarma-citation="entities:33815:1" rel="noopener">Avast PLC (AVST LN)</a> and <a href="https://www.smartkarma.com/entities/meggitt-plc" target="_blank" data-smartkarma-citation="entities:22044:1" rel="noopener">Meggitt PLC (MGGT LN)</a> deals could result in intra-review changes in September 2022.</li>
</ul>


In this insight, we take a look at the names leading the race to become ADDs/DELs for the STOXX Europe 600 and EURO STOXX Indices for the September 2022 Rebalance.
Based on current rankings, there could be around 11 ADDs/DELs in the September 2022 Rebalance.
The completion of the Avast PLC (AVST LN) and Meggitt PLC (MGGT LN) deals could result in intra-review changes in September 2022.


STOXX Europe Quiddity Leaderboard Sep 2022: 11 ADDs/DELs, Sandvik-Alleima, and More

Equity Research Analyst, Maritime sector, Drewry Maritime Financial Research

Ankush Kathuria CFA, FRM

Equity Research Analyst, Maritime sector

Maritime Sector, Equity & Credit Research

Drewry Maritime Financial Research

With no ties to other players in the shipping, finance or banking world, we provide a uniquely impartial view of the markets and companies we cover. Our parent organization, Drewry is a leading independent provider of research services to the maritime and shipping industry, employing over 100 professionals across an international network of offices in London, Delhi, Singapore and Shanghai. Combining our market-leading resources with seasoned sector expertise DFRS offers a highly differentiated and comprehensive range of investment and financial research services to lenders and prospective investors in publicly listed maritime and shipping companies. The full service of reports, supporting resources and sector orientated webinars provides our clients with the most complete picture of the organisations under coverage as is possible. We have been charting and analysing the world’s maritime markets for more than 40 years. This unrivalled intelligence and understanding provides the foundation of our research service. Our analysts have access to one of the most up-to-date, comprehensive and reliable sources of market insight and research data available today. We look at globally listed companies within the following sectors: Port Operators, Container Shipping, Container Manufacturing & Leasing, LNG Shipping, Dry Bulk Shipping and Tanker Shipping. Combine in-depth sector expertise with financial analysis focusing on over 50 stocks globally.

Equity Bottom-Up

Earnings to expand with recovery in tanker market: Euronav (EURN) has realised spot rate of USD 34,959pd for VLCCs and USD 20,553pd for Suezmaxes in 4Q18 as freight rates improved on major trading routes due to firm seasonal demand. Elevated scrapping activity in 2018 also lead to a sharp surge in freight rates across vessel classes in the latter months of the year. EURN reported TCE revenue of USD 192.9m for 4Q18, which is in line with our estimate of USD 196m. TCE revenue for 4Q18 surged 84% y/y primarily on the back of improved vessel earnings and an expanded fleet after the acquisition of Gener8. TCE revenue is estimated to grow by 54.9% to USD 717.7m in 2019, as a result of the acquisition of Gener8 and improved vessel earnings, whereas EBITDA is expected to surge 117.7% to USD 392.3m. The company is expected to report net income of USD 7.5m in 2019, which would increase further to USD 173.8m in 2021. The pay-out is expected to increase from a minimum of USD 0.12 per share to USD 0.47 in 2021. Accordingly, we maintain our Attractive stance on the company’s stock and assign a fair value of USD 9.75 per share

Earnings to expand with recovery in tanker market: Euronav (EURN) has realised spot rate of USD 34,959pd for VLCCs and USD 20,553pd for Suezmaxes in 4Q18 as freight rates improved on major trading routes due to firm seasonal demand. Elevated scrapping activity in 2018 also lead to a sharp surge in freight rates across vessel classes in the latter months of the year. EURN reported TCE revenue of USD 192.9m for 4Q18, which is in line with our estimate of USD 196m. TCE revenue for 4Q18 surged 84% y/y primarily on the back of improved vessel earnings and an expanded fleet after the acquisition of Gener8. TCE revenue is estimated to grow by 54.9% to USD 717.7m in 2019, as a result of the acquisition of Gener8 and improved vessel earnings, whereas EBITDA is expected to surge 117.7% to USD 392.3m. The company is expected to report net income of USD 7.5m in 2019, which would increase further to USD 173.8m in 2021. The pay-out is expected to increase from a minimum of USD 0.12 per share to USD 0.47 in 2021. Accordingly, we maintain our Attractive stance on the company’s stock and assign a fair value of USD 9.75 per share

Euronav NV - Ready to Reap the Rewards of Gener8 Acquisition

Transport Sector, China and Asia-focused Research

Charles De Trenck

Tanker shares probably showed up on many aggressive investor stock screens in the last couple of days. But the trade has been on a couple of times recently. And just about came back to its recent starting point a few days ago, in some cases. That is how steep some of the sell-offs were. But the overall original trade probably started when oil made its big decline. We can delineate the trades pretty clearly, while also observing some names that have moved quickly against those still languishing somewhat. We look at some recent performances, better versus weaker trades.

Tanker shares probably showed up on many aggressive investor stock screens in the last couple of days. But the trade has been on a couple of times recently. And just about came back to its recent starting point a few days ago, in some cases. That is how steep some of the sell-offs were. But the overall original trade probably started when oil made its big decline. We can delineate the trades pretty clearly, while also observing some names that have moved quickly against those still languishing somewhat. We look at some recent performances, better versus weaker trades.

Ongoing Coverage: Tankers in Sweet Spot of Negative Correlation to Oil... Share Rebounds

Equity Analyst

Nikesh Shukla

The worst is behind us We believe that we have reached the bottom of the crude tanker shipping market. While we don’t expect rates to reach anywhere close to the levels seen in 2015 later this year, we believe that the ingredients are in place for the market to see a gradual improvement in vessel earnings over the next two years. Beyond that, an improvement in earnings will be predicated how the orderbook evolves as well as on OPEC’s production levels which are currently not at a level sufficient to employ crude tankers at profitable levels.

The worst is behind us We believe that we have reached the bottom of the crude tanker shipping market. While we don’t expect rates to reach anywhere close to the levels seen in 2015 later this year, we believe that the ingredients are in place for the market to see a gradual improvement in vessel earnings over the next two years. Beyond that, an improvement in earnings will be predicated how the orderbook evolves as well as on OPEC’s production levels which are currently not at a level sufficient to employ crude tankers at profitable levels.

Is It Time to Bottom-Fish Crude Tanker Stocks?

Shipping, specifically LPG tanker shipping, made headlines this week with a takeover offer via an all-stock transaction from <a href="https://www.smartkarma.com/entities/21082" target="_blank" data-smartkarma-citation="entities:21082:1">BW LPG Ltd (BWLPG NO)</a> (in Norway, but controlled by the Singapore-based Sohmen-Pao family) for US-listed <a href="https://www.smartkarma.com/entities/19102" target="_blank" data-smartkarma-citation="entities:19102:1">Dorian Lpg Ltd (LPG US)</a>.For a quick summary of the proposed combined company of BW LPG and Dorian LPG please read the media <a href="https://www.hellenicshippingnews.com/bw-lpg-looks-to-acquire-hadjipateras-led-dorian-lpg-in-a-deal-worth-1-1-billion/" target="_blank">media stories</a> first. Then, for more on the offer direct from BW, please refer to the <a href="http://www.bwlpg.com/Media/May-2018-(1)/BW-LPG-PROPOSES-TO-COMBINE-WITH-DORIAN-IN-ALL-STOC" target="_blank">summary proposed offer</a>.BW LPG is already the largest VLGC (very large gas carrier) player, but there are good reasons for BW LPG to move on Dorian LPG. And there may be additional drivers coming into play.We look at recent history and current issues &amp; drivers in our update.

Shipping, specifically LPG tanker shipping, made headlines this week with a takeover offer via an all-stock transaction from BW LPG Ltd (BWLPG NO) (in Norway, but controlled by the Singapore-based Sohmen-Pao family) for US-listed Dorian Lpg Ltd (LPG US).For a quick summary of the proposed combined company of BW LPG and Dorian LPG please read the media media stories first. Then, for more on the offer direct from BW, please refer to the summary proposed offer.BW LPG is already the largest VLGC (very large gas carrier) player, but there are good reasons for BW LPG to move on Dorian LPG. And there may be additional drivers coming into play.We look at recent history and current issues &amp; drivers in our update.

Shipping Consolidation: BW LPG Bids for Dorian LPG in $1.1bn EV Valuation

United States

Euronav NV is a shipping company. The Company is engaged in the ownership, operation and management of tankers for the carriage of crude oil.

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Euronav NV (EURN US)

STOXX Europe Quiddity Leaderboard Sep 2022: 11 ADDs/DELs, Sandvik-Alleima, and More

I see 11 ADDs/DELs based on current numbers but there are several other names that are only a small price change away from becoming ADDs/DELs

Janaghan Jeyakumar, CFA

Euronav NV - Ready to Reap the Rewards of Gener8 Acquisition

Earnings to expand with recovery in tanker market: Euronav (EURN) has realised spot rate of USD 34,959pd for VLCCs and USD 20,553pd for Suezmaxes...

Drewry Maritime Financial Research

Is It Time to Bottom-Fish Crude Tanker Stocks?

The worst is behind usWe believe that we have reached the bottom of the crude tanker shipping market. While we don’t expect rates to reach anywhere...

Drewry Maritime Financial Research

Shipping Consolidation: BW LPG Bids for Dorian LPG in $1.1bn EV Valuation

Shipping, specifically LPG tanker shipping, made headlines this week with a takeover offer via an all-stock transaction from BW LPG Ltd (BWLPG NO)...

Charles De Trenck

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STOXX Europe Quiddity Leaderboard Sep 2022: 11 ADDs/DELs, Sandvik-Alleima, and More

I see 11 ADDs/DELs based on current numbers but there are several other names that are only a small price change away from becoming ADDs/DELs

Janaghan Jeyakumar, CFA

Euronav NV - Ready to Reap the Rewards of Gener8 Acquisition

Earnings to expand with recovery in tanker market: Euronav (EURN) has realised spot rate of USD 34,959pd for VLCCs and USD 20,553pd for Suezmaxes...

Drewry Maritime Financial Research

Ongoing Coverage: Tankers in Sweet Spot of Negative Correlation to Oil... Share Rebounds

Tanker shares probably showed up on many aggressive investor stock screens in the last couple of days. But the trade has been on a couple of times...

Charles De Trenck

Is It Time to Bottom-Fish Crude Tanker Stocks?

The worst is behind usWe believe that we have reached the bottom of the crude tanker shipping market. While we don’t expect rates to reach anywhere...

Drewry Maritime Financial Research

Shipping Consolidation: BW LPG Bids for Dorian LPG in $1.1bn EV Valuation

Shipping, specifically LPG tanker shipping, made headlines this week with a takeover offer via an all-stock transaction from BW LPG Ltd (BWLPG NO)...

Charles De Trenck