Report
Jørgen Lian
EUR 87.07 For Business Accounts Only

Avance Gas (Hold, TP: NOK108.00) - Near all-time high asset valuation

The forward curve indicates persistently strong earnings momentum for 2023 onwards with TCE rates above USD50k/day for 2024–2025, which would imply the stock is trading at a 20% dividend yield. We find the stock fairly valued at current levels, which on its 0.95x EV/GAV implies a 5-year VLGC value at a mere ~7% discount to the all-time high. With downside risk to US export growth, we consider the risk/reward dynamics balanced in light of where we believe we are in the LPG shipping cycle. We reiterate our HOLD but have raised our target price to NOK108 (96).
Underlying
AVANCE GAS HOLDINGS LTD

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.

Provider
DnB Markets
DnB Markets

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.

 

Analysts
Jørgen Lian

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