Avance Gas (Buy, TP: NOK103.00) - Still-strong outlook
We expect US LPG exports to continue to thrive on rich inventories and sparse domestic demand, potentially offering additional cargoes and supporting freight rates. With second-hand values rising (c40% above 2018–2019), and the forward market indicating cUSD60k/day (our estimate cUSD48k/day) for the rest of 2023, we find Avance Gas well placed to leverage the market tailwinds and see potential upside to 2023e EBITDA. We reiterate our BUY and have raised our target price to NOK103 (91).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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