Avance Gas (Buy, TP: NOK28.00) - Improvements on the horizon
Avance Gas wraps up the year with strongest operating performance relative to our VLGC TCE benchmark since 2015. Its liquidity position is strong enough to withstand historically low spot rates until Q4 2019 in a bear-case scenario, but we believe the company will generate cash from H1 2018. US production growth looks strong YTD and supports our view of improving utilisation and rates for VLGCs from 2018. We reiterate our BUY recommendation and NOK28 target price.Avance Gas Holding is principally engaged in the transportation of Liquefied Petroleum Gas ("LPG"). Co. operates a fleet of 14 Very Large Gas Carriers, providing transportation services to oil majors and traders of LPG on a global basis. Co. transports LPG from the Middle East and the U.S. Gulf or U.S.loan facility from BCBloan facility from BCB(excludes dividends satisfied by issue of shares) East Coast to destinations in Europe, South America and Asia.
DNB Markets is the investment banking arm of DNB Bank ASA and is focused primarily on the Nordic region, as well as internationally on niches such as global shipping, energy and related services, and seafood. DNB Markets offers services in FICC, Equities and Investment Banking advisory from offices in Oslo, Stockholm, London, Singapore and New York. Equity research coverage is offered on c250 Nordic companies. DNB was ranked no.2 in Extel Nordic Research 2017. The DNB Markets’ Credit and FICC Macro & FX Research teams are repeatedly highly rated by Prospera Nordic Institutional Investor Surveys.
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