Lead Analyst, Drewry Maritime Financial Research

Victoria Saraglis

Lead Analyst

Maritime Sector, Equity & Credit Research

Drewry Maritime Financial Research

With no ties to other players in the shipping, finance or banking world, we provide a uniquely impartial view of the markets and companies we cover. Our parent organization, Drewry is a leading independent provider of research services to the maritime and shipping industry, employing over 100 professionals across an international network of offices in London, Delhi, Singapore and Shanghai. Combining our market-leading resources with seasoned sector expertise DFRS offers a highly differentiated and comprehensive range of investment and financial research services to lenders and prospective investors in publicly listed maritime and shipping companies. The full service of reports, supporting resources and sector orientated webinars provides our clients with the most complete picture of the organisations under coverage as is possible. We have been charting and analysing the world’s maritime markets for more than 40 years. This unrivalled intelligence and understanding provides the foundation of our research service. Our analysts have access to one of the most up-to-date, comprehensive and reliable sources of market insight and research data available today. We look at globally listed companies within the following sectors: Port Operators, Container Shipping, Container Manufacturing & Leasing, LNG Shipping, Dry Bulk Shipping and Tanker Shipping. Combine in-depth sector expertise with financial analysis focusing on over 50 stocks globally.

Equity Bottom-Up

Vulnerable to the seasonality reflected in LPG freight rates during the second quarter of 2018, the company recorded a net loss of USD 3.2m, compared with net income of USD 0.7m in the previous quarter. Moreover, net income dropped from the USD 2.3m attained in the second quarter of 2017. On a positive note, the company has managed to control its vessel operating expenses at USD 7,500pd.The company revealed that it expects to contribute a capital of USD 155m – lower than the USD 200m projected earlier, for the construction of the ethylene export terminal until 2020, of which USD 15m has been paid out of cash resources, and the remainder is expected to be financed through debt facilities. Furthermore, the company continues to believe that the refrigeration unit will become operational by the fourth quarter of 2019.

Vulnerable to the seasonality reflected in LPG freight rates during the second quarter of 2018, the company recorded a net loss of USD 3.2m, compared with net income of USD 0.7m in the previous quarter. Moreover, net income dropped from the USD 2.3m attained in the second quarter of 2017. On a positive note, the company has managed to control its vessel operating expenses at USD 7,500pd.The company revealed that it expects to contribute a capital of USD 155m – lower than the USD 200m projected earlier, for the construction of the ethylene export terminal until 2020, of which USD 15m has been paid out of cash resources, and the remainder is expected to be financed through debt facilities. Furthermore, the company continues to believe that the refrigeration unit will become operational by the fourth quarter of 2019.

Journey to Ithaca - A Long One for Handysize LPG Owners?

Transport Sector, China and Asia-focused Research

Charles De Trenck

Event-Driven

Shipping, specifically LPG tanker shipping, made headlines this week with a takeover offer via an all-stock transaction from <a href="https://www.smartkarma.com/entities/21082" target="_blank" data-smartkarma-citation="entities:21082:1">BW LPG Ltd (BWLPG NO)</a> (in Norway, but controlled by the Singapore-based Sohmen-Pao family) for US-listed <a href="https://www.smartkarma.com/entities/19102" target="_blank" data-smartkarma-citation="entities:19102:1">Dorian Lpg Ltd (LPG US)</a>.For a quick summary of the proposed combined company of BW LPG and Dorian LPG please read the media <a href="https://www.hellenicshippingnews.com/bw-lpg-looks-to-acquire-hadjipateras-led-dorian-lpg-in-a-deal-worth-1-1-billion/" target="_blank">media stories</a> first. Then, for more on the offer direct from BW, please refer to the <a href="http://www.bwlpg.com/Media/May-2018-(1)/BW-LPG-PROPOSES-TO-COMBINE-WITH-DORIAN-IN-ALL-STOC" target="_blank">summary proposed offer</a>.BW LPG is already the largest VLGC (very large gas carrier) player, but there are good reasons for BW LPG to move on Dorian LPG. And there may be additional drivers coming into play.We look at recent history and current issues &amp; drivers in our update.

Shipping, specifically LPG tanker shipping, made headlines this week with a takeover offer via an all-stock transaction from BW LPG Ltd (BWLPG NO) (in Norway, but controlled by the Singapore-based Sohmen-Pao family) for US-listed Dorian Lpg Ltd (LPG US).For a quick summary of the proposed combined company of BW LPG and Dorian LPG please read the media media stories first. Then, for more on the offer direct from BW, please refer to the summary proposed offer.BW LPG is already the largest VLGC (very large gas carrier) player, but there are good reasons for BW LPG to move on Dorian LPG. And there may be additional drivers coming into play.We look at recent history and current issues &amp; drivers in our update.

Shipping Consolidation: BW LPG Bids for Dorian LPG in $1.1bn EV Valuation

Operating revenue continues to expand slightly despite low rates; increasing expenses create drag: Navigator Holdings reported operating revenue of USD 77.8m in the first quarter of 2018, marginally higher than the USD 77.3m of operating revenue reported in the first quarter of 2017. The increase in revenue was marginal even though the company increased its weighted average fleet from 34.6 in the first quarter of 2017 to 38 vessels. Additionally, the company crossed the fourth quarter of 2017…

Operating revenue continues to expand slightly despite low rates; increasing expenses create drag: Navigator Holdings reported operating revenue of USD 77.8m in the first quarter of 2018, marginally higher than the USD 77.3m of operating revenue reported in the first quarter of 2017. The increase in revenue was marginal even though the company increased its weighted average fleet from 34.6 in the first quarter of 2017 to 38 vessels. Additionally, the company crossed the fourth quarter of 2017…

Hopes Tied to Ethylene Terminal as Oversupply Shadows Handysize Earnings

Technical Analyst, Vermilion Research

Joe Jasper

Technical Analyst

Technical and Quantitative Research

Vermilion Research

Vermilion’s objective is to deliver timely, actionable, and unique technical research to professional investors through the application of our various technical indicators.

Our research strategists seek to highlight securities which we believe are at major inflection points, based on our various technical and quantitative indicators, and offer asymmetric risk/return profiles. Our unique research methodology, centered on relative strength, enables our strategists to deliver superior investment recommendations.

Our process begins by organizing the universe of actively traded stocks into discrete sectors, then into industry groups. We then apply our technical and quantitative tools to identify developing price trends. Once attractive trends are identified within a selected sector or group, we screen for individual stocks which we believe offer the best risk/reward profile. We provide a historical perspective that often reveals, through our long-term charts, how price patterns often repeat themselves over time.

Technical Analysis

Commodities and related stocks are on the rise. Crude oil, industrial metals, and lumber prices are all breaking out to new highs and related energy and materials stocks are reaping the benefits. We expect their outperformance to continue. In this week's report we highlight commodities and actionable associated stocks.

Commodities and related stocks are on the rise. Crude oil, industrial metals, and lumber prices are all breaking out to new highs and related energy and materials stocks are reaping the benefits. We expect their outperformance to continue. In this week's report we highlight commodities and actionable associated stocks.

Opportunities in Global Energy & Materials Stocks

Equity Research Analyst, Maritime sector, Drewry Maritime Financial Research

Ankush Kathuria CFA, FRM

Equity Research Analyst, Maritime sector

Thematic (Sector/Industry)

<ul><li>Vessel oversupply, which was the major cause of distress for LPG ship owners in 2017, will moderate over the next couple of years and will pave the way for recovery. We believe LPG shipping is past its cyclical bottom and the market imbalance should improve soon. Hence, we have turned positive on the sector, and that should reflect in share prices.</li><li>We expect tonne-mile vessel demand to outpace growth in tonne-mile supply, helped by the improved vessel utilisation rates on the back of growing long-haul LPG trade. Strengthening market conditions will also boost freight rates. In turn, the recovery in freight rates will support asset prices that could tick upwards if the recovery is robust in winter.</li><li>Valuations for LPG shipping stocks are attractive, and with fundamentals for 2018 getting better, we believe it is opportune to accumulate LPG shipping stocks. The LPG shipping stocks are trading below their net asset values. At current share price, we believe the upside potential is material and the probability of a downside is limited. Hence, we recommend investors to accumulate LPG shipping stocks and have accorded an Attractive rating to BW LPG (BWLPG NO), Navigator Holdings (NVGS US) and Stealth Gas (GASS US).</li></ul>

Vessel oversupply, which was the major cause of distress for LPG ship owners in 2017, will moderate over the next couple of years and will pave the way for recovery. We believe LPG shipping is past its cyclical bottom and the market imbalance should improve soon. Hence, we have turned positive on the sector, and that should reflect in share prices.We expect tonne-mile vessel demand to outpace growth in tonne-mile supply, helped by the improved vessel utilisation rates on the back of growing long-haul LPG trade. Strengthening market conditions will also boost freight rates. In turn, the recovery in freight rates will support asset prices that could tick upwards if the recovery is robust in winter.Valuations for LPG shipping stocks are attractive, and with fundamentals for 2018 getting better, we believe it is opportune to accumulate LPG shipping stocks. The LPG shipping stocks are trading below their net asset values. At current share price, we believe the upside potential is material and the probability of a downside is limited. Hence, we recommend investors to accumulate LPG shipping stocks and have accorded an Attractive rating to BW LPG (BWLPG NO), Navigator Holdings (NVGS US) and Stealth Gas (GASS US).

LPG Shipping Outlook – Past the Bottom of the Cycle

United States

Navigator Holdings Ltd. owns and operates a fleet of handysize liquefied gas carriers. It also provides international seaborne transportation and regional distribution services of liquefied petroleum gas, petrochemical gases and ammonia for energy companies, industrial users and commodity traders. The company currently operates twenty one handysize gas carriers, with three additional vessels and seven confirmed new buildings, making a total fleet of thirty owned handysize gas carriers and one chartered-in vessel. Navigator Holdings was founded in 1997 and is headquartered in London, the United Kingdom.

Price Gauge
52-week Range	0.00 - 0.00
Market Cap (USDm)	0.00
P/E	0.00
Dividend (Yield)	0.00

Navigator Holdings (NVGS US)

Journey to Ithaca - A Long One for Handysize LPG Owners?

Vulnerable to the seasonality reflected in LPG freight rates during the second quarter of 2018, the company recorded a net loss of USD 3.2m,...

Drewry Maritime Financial Research

Shipping Consolidation: BW LPG Bids for Dorian LPG in $1.1bn EV Valuation

Shipping, specifically LPG tanker shipping, made headlines this week with a takeover offer via an all-stock transaction from BW LPG Ltd (BWLPG NO)...

Charles De Trenck

Hopes Tied to Ethylene Terminal as Oversupply Shadows Handysize Earnings

Operating revenue continues to expand slightly despite low rates; increasing expenses create drag: Navigator Holdings reported operating revenue of...

Drewry Maritime Financial Research

Opportunities in Global Energy & Materials Stocks

Commodities and related stocks are on the rise. Crude oil, industrial metals, and lumber prices are all breaking out to new highs and related...

Vermilion Research

LPG Shipping Outlook – Past the Bottom of the Cycle

Vessel oversupply, which was the major cause of distress for LPG ship owners in 2017, will moderate over the next couple of years and will pave...

Drewry Maritime Financial Research

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)