Avance Gas (Buy, TP: NOK168.00) - Dividends to come
VLGC spot rates have yet to fully recover after the US cold spell, while an outlook for reduced propane heating demand on high temperatures in the next two weeks should support inventories to stay above the 5-year average and lend a hand to the recently upward-trending US-Far East arbitrage (up c60% since trough). Hence, we expect a DPS of cNOK35 for Q1–Q2 or c25% of the current share price, based on our estimates of operating EPS of cNOK14 and cNOK21/share from additional cash proceeds available for dividends. We reiterate our BUY and have raised our target price to NOK168 (163).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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