Stolt-Nielsen posts 1Q (December-February) figures next Thursday. There was a downward movement in chemical tanker rates during the period followed by weaker USD and, most importantly, proposed USTR levies on Chinese-made ships and their owners. In the Book of Revelation, seven trumpets are sounded, one at a time, to cue apocalyptic events. Let us just hope that Donald Trump(et) is not the first one – officially the tariffs are not yet imposed with the ongoing hearings and letters from major trade organizations. Nevertheless, the risk increases, while we cut our TP to NOK 340/sh, keeping Buy after the sharp share drop.

Weaker quarter guided and the rates confirmed this
Stolt-Nielsen guided a 7.5%-10% decline in the daily average TCE earnings for 1Q25, we took the midpoint as our estimate and watched the official chemical tanker rates in various regions confirming the lower-expectation QoQ theory. Nothing very dramatic, though, with the bottom line of around USD 70m projected by both us and the street, which, in any other period would be more than solid, but somewhat lower than during the last couple of years.

Levies on Chinese-build vessels proposed
At the end of February, US Government proposed to impose a fee of up to USD 1.5m on Chinese built vessels when calling US ports. This would include vessels owned or operated by Chinese companies even if they are not built in China. More importantly for Stolt-Nielsen, this would also include vessels owned or operated by international companies, even if the vessels were not built in China, provided their fleets contain other vessels built in China, or newbuilding orders in China, which SNI does have in its fleet. Non-Chinese maritime transport operators operating Chinese-built ships would pay up to USD 1.5m per port entry, according to the proposition. Companies with greater than 50% Chinese-built fleets would pay USD 1m per vessel entry regardless of origin. The fee would reduce to USD 750k if the Chinese fleet percentage was between 25% and 50% and to USD 500k if under 25%. Even if the lowest amount should be paid, this would increase the shipping cost by USD 15-25k/d for chemical tankers shipping from China or Middle East to the US, meaning 40-50% increased rates, also meaning the number of customers stepping back if possible. Notably, at the time of the writing nothing is officially confirmed, and we will not speculate on the impact with expectations to hear the company commenting during the results' presentation. For now, following the USDNOK fluctuations and the uncertainty, we reduced the Target Price to NOK 340/sh, but Buy remains as the stock sharply dropped.
Source: Norne Research