Avance Gas (Hold, TP: NOK194.00) - Solid outlook being priced in
US production up 9% YOY since March has supported inventories and the arbitrage (currently implying cUSD95k/day rate). With current production levels, and VLGC deliveries to slow, we see an attractive earnings outlook backed by the FFA of USD70k/day for H2e. However, the LPG growth has outpaced crude oil (up 3%) and natural gas (up 0.5%) in the same period and EIA suggests it is set to decline. Still, we estimate total DPS of NOK30 in the next four quarters (18% of the current share price excluding the Q1 DPS). We reiterate our HOLD but have raised our target price to NOK194 (172).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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