Norne Securities starts coverage of land-based fish farmers. Only two get BUY recommendations

Aslak Berge

But companies will quickly fall into a profit position, investment bank predicts.

The investment bank Norne Securities published its first sector report on Monday morning for land-based salmon farmers. The 51-page report highlights eight companies, five of which are listed and three are on their way there.

Norne is taking up coverage on all five land-based fish farmers on Oslo Stock Exchange, but only two of them, Salmon Evolution and Andfjord Salmon, received a BUY recommendation. The remaining three received HOLD recommendations.

For Salmon Evolution, analyst Mindaugas Čekanavičius emphasised that the company has “unmatched access to fresh seawater, expertise, renewable energy and established infrastructure.”

The price target is set at NOK 9, based on a discounted cash flow analysis. Salmon Evolution is estimated to earn money from operations as early as 2023, with EUR 15 million. In 2030, the company is expected to rake in EUR 140 million in EBIT. The company currently has a stock exchange value of just under EUR 200 million.

Andfjord Salmon’s price target is set at NOK 65. According to the analysis, Andfjord will earn a total of EUR 21.6 million in EBITDA in 2023 – the year after the first smolt release. After that, earnings will rise steeply – to EUR 130 million in 2030.

For market leader Atlantic Sapphire, Norne had a HOLD recommendation, based on “significantly higher costs related to water supply from the warm United States”, as well as unspecified “technological issues”. Despite its lukewarm recommendation, Norne expects Atlantic Sapphire to make money from its operations as early as next year. The price target is NOK 105.

Danish Nordic Aqua Partners was also given a neutral recommendation, with a price target of NOK 75. The reservation here is “higher risk associated with the Chinese market”. Nordic Aqua Partners is expected to harvest its first fish in China in 2024, and will make money immediately, Norne predicted.

Proximar Seafood was given a price target of NOK 10 and a HOLD recommendation. The appeal here is “higher risk related to the Japanese market – both due to geographical location and related to price premiums”. Proximar will harvest its first fish in 2024, and Norne also expects a comfortable profit, of EUR 12 million, in the same year. Over the next four years, operating profit is estimated to increase to EUR 110 million. That’s three times more than the company’s stock market value today.

The report also presented Nordic Aquafarms, AquaCon and Bulandet Miljøfisk. The investment bank has been engaged as an adviser to the latter.


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