PVT – Riding on Vietnam’s growing thirst for energy – Initiation

• PVT has a chartering profile skewed towards fixed rates, which offers protection against the current low-rate environment, while providing potential upside for recovery.
• PVT has the largest tanker fleet and LPG fleet among Vietnam carriers, and is able to ride on growing demand for fossil fuels and LPG from the civil and industrial sectors.
• The company plans to upsize and rejuvenate its fleet over the next few years to respond to Vietnam’s increasing refinery capacity and growing demand for LPG.
• In our view, PVT’s current valuation is attractive at FY19F EV/EBITDA of 4.8x vs. global tanker operators’ average (excluding PVT) of 7.2x.
• We initiate coverage on PVT with an Add rating and a target price of VND29,900.

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