BW LPG (Buy, TP: NOK44.00) - USD3.7k/day outperformance
BW LPG expects 2018 US LPG exports in line with our forecast of 31mt, which on our LPG supply/demand model should yield VLGC spot rates of USD21k/day for 2018e or a gradual improvement from 2017e YTD of USD15k/day. By 2019e we see rates up to USD31k/day, which in our view should lead to a more substantial re-valuation of the LPG stocks. We find BW LPG attractive at a P/NAV of 0.64x and that its good spot market performance relative to Avance is not reflected in the valuation. BUY, NOK44 target price reiterated.
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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