Seanergy Maritime Holdings Corp.

SHIP Details

Seanergy Maritime Holdings Corp. (NASDAQ: SHIP) is an international shipping company that provides marine transportation for dry bulk commodities, primarily iron ore and coal. It owns a fleet of sixteen Capesize vessels, with a combined cargo-carrying capacity of 2.83 million deadweight tonnages (dwt) and an average fleet age of 11.4 years.

Share Repurchase Program: On August 11, 2021, SHIP's board approved a plan to repurchase up to USD 17 million of its common shares, representing around 10% of the market value as of August 10, 2021.

Fleet Expansion: On July 27, 2021, SHIP announced the delivery of the M/V Friendship, a 2009-built Capesize vessel with a capacity of 0.18 million dwt, on July 27, 2021, which was partially financed by a USD 13.0 million loan facility. It is the fifth Capesize vessel to be delivered in FY21. In addition, SHIP secured a Time Charter (T/C) for the new vessel with NYK Line, a leading Japanese corporation, for a period of 17 to 24 months.

Q2FY21 Results: The company reported a growth of 207.81% in net vessel revenue to USD 27.83 million for Q2FY21 (ended June 30, 2021) compared to USD 9.04 million in Q2FY20, attributable to an increase in current charter rates and the acquisition of four new vessels in 2021. SHIP reported adjusted EBITDA of USD 11.29 million in Q2FY21 vs. USD (1.85) million in Q2FY20. Net income was USD 1.96 million in Q2FY21, in contrast to a net loss of USD 11.29 million in Q2FY20. As of June 30, 2021, the company had a cash balance (including term deposits and restricted cash) of USD 56.39 million and total debt of USD 220.03 million.

Key Risks: Fuel is the primary driver of SHIP's operating expenses, the price of which is highly volatile and unpredictable. Hence, any lag in the supply of the requisite quantity or unfavorable pricing could distort the company's overall performance. In addition, SHIP's top two customers accounted for 41% of its FY20 vessel revenue. Hence, the loss of any of these key customers could hurt the company's financials.

Outlook: As of July 29, 2021, SHIP had fixed ~94% of the fleet expected Q3FY21 operating days at an average Time Charter Equivalent (TCE) of USD 28,880 per day, 63% higher than H1FY21.

Valuation Methodology: EV/Sales Multiple Based Relative Valuation

 (Analysis by Kalkine Group)

• % Premium/(Discount) is based on our assessment of the company's NTM trading multiple after considering its key growth drivers, economic moat, stock's historical trading multiples versus peer average/median, and investment risks.

SHIP Daily Technical Chart (Source: REFINITIV)

Stock Recommendation: SHIP's stock price has increased 23.04% in the past month and is currently trading close to the lower-end of its 52-week range of USD 0.39 to USD 2.45. The stock is currently trading close to its 50 and 200 DMA levels, and its RSI Index is at 63.94. We have valued the stock using the EV/Sales-based relative valuation methodology and arrived at a target price of USD 1.06. Considering the uptick in the stock price, we believe the current price adequately reflects the business fundamentals and recommend a "Sell" rating on the stock at the current price of USD 1.26, up 0.40% as of September 01, 2021, 11:39 AM ET.

* All forecasted figures and Industry Information have been taken from REFINITIV.

* The reference data in this report has been partly sourced from REFINITIV.

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