Fearnley Securities has initiated coverage of Pelican Aqua with a Buy recommendation and a NOK 21 price target, implying around 41 percent upside from the company’s May equity raising price.
In a research note issued on Thursday, Fearnley said Pelican Aqua is well positioned to benefit from growing demand for wellboats as the salmon farming industry requires increasing transport capacity to support biological management, post-smolt production and fish treatments.
Pelican Aqua is developing a fleet of four 5,000-cubic metre wellboats under construction at a Chinese shipyard, with deliveries scheduled for 2029. The company also holds options for a further six vessels for delivery from 2030.
Fearnley said building in China reduces construction costs by around 35 percent compared with European yards and argued that the global wellboat market remains structurally undersupplied despite the current orderbook.
The bank estimates Pelican Aqua will trade at 6.8 times fully invested EV/EBITDA based on run-rate earnings, below historical transaction multiples for comparable assets.
Fearnley values the company using an equal weighting of a discounted cash flow model and a 10x EV/EBITDA multiple, while identifying execution, organisational build-out and charter contract negotiations as the principal risks.
