Transport Sector, China and Asia-focused Research

Charles De Trenck

Event-Driven

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

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

Tsakos Energy Navigation Ltd / Equity Bottom-Up

Tsakos Energy Navigation LTD ( TNP US) - Profits Vanished During the Quarter<ul><li>
Top line below our estimate; company posts losses: Tsakos Energy Navigation’s (TNP’s) operating revenue dropped 23% y/y in 3Q16 to USD 109.2m (lower than our estimate of USD 117.7m) even though the company added three newbuild Aframaxes and two LRs to its fleet. The fall in revenue was primarily on account of a 31% y/y decline in the average TCE rates to USD 17,608pd as well as five dry-dockings during the quarter. The…</li></ul>

Tsakos Energy Navigation LTD ( TNP US) - Profits Vanished During the Quarter
Top line below our estimate; company posts losses: Tsakos Energy Navigation’s (TNP’s) operating revenue dropped 23% y/y in 3Q16 to USD 109.2m (lower than our estimate of USD 117.7m) even though the company added three newbuild Aframaxes and two LRs to its fleet. The fall in revenue was primarily on account of a 31% y/y decline in the average TCE rates to USD 17,608pd as well as five dry-dockings during the quarter. The…

Tsakos Energy Navigation LTD ( TNP US) - Profits Vanished During the Quarter

Pacific Basin Shipping / Equity Bottom-Up

DRYS has now spiked (before suspension) more than 2000% post Trump and as the BDI (Baltic Dry Index) popped above 1,000. Most of the trading activity in US shipping names has happened over the last two days. As a result, we had multiple TV segments on CNBC on Wednesday on these shares. The <a href="http://blogs.wsj.com/moneybeat/2016/11/16/unmoored-from-reality-dryships-halted-after-1500-post-election-rally/" target="_blank">WSJ</a> also took to writing on the topic for generalist readers. …This funky stock roller coaster, as well as longer-term stock holds are quickly recapped further below.The worst shipping companies, including…

DRYS has now spiked (before suspension) more than 2000% post Trump and as the BDI (Baltic Dry Index) popped above 1,000. Most of the trading activity in US shipping names has happened over the last two days. As a result, we had multiple TV segments on CNBC on Wednesday on these shares. The WSJ also took to writing on the topic for generalist readers. …This funky stock roller coaster, as well as longer-term stock holds are quickly recapped further below.The worst shipping companies, including…

Shipping Stocks Go Bananas, the Worst Rising the Most

Tsakos Energy Navigation LTD ( TNP US) - Changing Our Stance And Downgrading To Neutral<ul><li>
Earnings lower than consensus, but in line with our estimates: Tsakos Energy Navigation’s (TNP’s) operating revenue declined 22.2% y/y in 2Q16 to USD 119.9m (slightly above our estimate of USD 115.7m), even though the company added four newbuilds to its fleet, primarily because the average TCE per ship dropped 19% y/y to USD 21,602pd. The TCE revenue of USD 94.8m is in line with our estimate of USD 93.7m.…</li></ul>

Tsakos Energy Navigation LTD ( TNP US) - Changing Our Stance And Downgrading To Neutral
Earnings lower than consensus, but in line with our estimates: Tsakos Energy Navigation’s (TNP’s) operating revenue declined 22.2% y/y in 2Q16 to USD 119.9m (slightly above our estimate of USD 115.7m), even though the company added four newbuilds to its fleet, primarily because the average TCE per ship dropped 19% y/y to USD 21,602pd. The TCE revenue of USD 94.8m is in line with our estimate of USD 93.7m.…

Tsakos Energy Navigation LTD ( TNP US) - Changing Our Stance And Downgrading To Neutral

In this note: 1) some interesting reversals, 2) some updates on stock pick performances, 3) other updates and items of note. A few enclosures added.Of all the interesting things that happened over the last few weeks, to me, were two reversals most investors would have not gone for until they happened. Ultimately, it was a story about the market expecting key commodities to retreat, only to find the reverse.Interesting piece from Rickards last week is discussed.

In this note: 1) some interesting reversals, 2) some updates on stock pick performances, 3) other updates and items of note. A few enclosures added.Of all the interesting things that happened over the last few weeks, to me, were two reversals most investors would have not gone for until they happened. Ultimately, it was a story about the market expecting key commodities to retreat, only to find the reverse.Interesting piece from Rickards last week is discussed.

Interesting Counter-Intuitive Reversals Last Few Weeks (Breakouts…Positions…Key Notes)

United States

Tsakos Energy Navigation Ltd. owns and operates a fleet of tankers.  The fleet includes VLCC, suezmax, aframax, panamax, and handymax tankers suitable for transporting crude oil, refined petroleum products, and other liquids.  The Company's technical manager is Tsakos Columbia ShipManagement.

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Tsakos Energy Navigation Ltd (TNP US)

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