Avance Gas (Buy, TP: NOK48.00) - Fleet on water at hefty discount
We reiterate our BUY, while we have reduced our target price to NOK48 (50), as we now believe the stock should trade in line with the 2018–2019 range of an EV/GAV of 0.90x (0.95x). With increasing values for LPG propulsion, we believe more than 50% of the current enterprise value is in the newbuilds. The fleet on water has an average age of 9.1 years, with implied values of cUSD34m, a discount of more than 40% – unwarranted in our view.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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