In today’s briefing:
- Sembcorp Marine: Beneficiary of High Oil Price? Not so Fast
- HAL Holding/Royal Boskalis Westminster: Opportunistic Voluntary Offer
- Chiyoda – Breaking Out of Downtrend and Setup For a Pref Buyback
- H&E Equipment: Delivering On Its Long-Term Strategy
Sembcorp Marine: Beneficiary of High Oil Price? Not so Fast
- After a 35% price decline in 2021 and 11% performance YTD, we are exploring if SMM is able to capitalize on the high oil price environment.
- We will look at its recent financial performance, orderbook, and financial forecast in 2022.
- We will also look at how to value the company and the key risk with our valuation.
HAL Holding/Royal Boskalis Westminster: Opportunistic Voluntary Offer
- On 10 March, HAL Holding announced an intended voluntary public €4.2 billion cash offer of €32.50/share. Coming from a subdued period for the industry, the multiples aren’t too generous: 8.0x EV/22e EBITDA.
- A 28% premium coupled with the current volatile market environment means that the offer is most likely to succeed. HAL and associated parties now control 48.9% of the shares.
- The median-implied equity value across multiples is €36.36/share, but investors are cashing out now: a vehicle set up by HAL is buying shares in the market at the offer price.
Chiyoda – Breaking Out of Downtrend and Setup For a Pref Buyback
- Recent events in Ukraine should be highly favourable for Chiyoda as they raise the potential for LNG capex.
- US to Europe deliveries could involve significant liquefaction capacity build-out at good pricing points and even hydrogen could be in the mix.
- If orders come through and rising profit drives the share price up that could also lead to positive capital structure changes.
H&E Equipment: Delivering On Its Long-Term Strategy
- Since my first analysis of the company, H&E Equipment outperformed.
- The management has recently announced an ambitious investment program that will result in a rapid expansion of the business.
- At the same time, the business is experiencing higher utilization rates, improving margins and upward multiple repricing.
Before it’s here, it’s on Smartkarma