BW LPG Limited

Section 1: Company Overview and Fundamentals

Company Overview:

BW LPG Limited (NYSE: BWLP) is a Singapore-based owner and operator of liquefied petroleum gas (LPG) vessels, owning and operating very large gas carriers (VLGCs) with a total carrying capacity of over three million CBM. The Company's business includes LPG shipping, product services and infrastructure. It owns and operates a fleet of LPG-powered VLGCs. Its VLGCs are retrofitted with LPG dual-fuel propulsion technology. It provides customers with integrated LPG delivery services.

Kalkine’s Dividend Income Report covers the Company Overview, Key positives & negatives, Investment summary, Key investment metrics, Top 10 shareholding, Business updates and insights into company recent financial results, Key Risks & Outlook, Price performance and technical summary, Target Price, and Recommendation on the stock.

Price Performance:

• BWLP's share price has dropped by 8.22% in the past three months. Similarly, in the long term, the stock has recovered by 13.53% over the past six months.

• The stock is leaning towards the lower band of its 52-week range of USD 22.31 and 52-week low price of USD 7.86, with the current price near an important support zone of USD9.50-USD 10.00, therefore expectations of upward movement in case these levels hold.
• The price is currently between its short-term (50-day) SMA and long-term (200-day) SMA, with the current RSI of 50.07, near mid-levels, with expectations and potential of upward movement.      

1.2 The Key Positives, Negatives, and Investment summary

1.3 Top 10 shareholders:

The top 10 shareholders together form ~60.39% of the total shareholding, signifying concentrated shareholding. BW Group Limited and Hemen Holding Limited are the biggest shareholders, holding the maximum stake in the company at ~30.39% and ~9.33%, respectively.

1.4 Dividend payments with impressive dividend yield:

BW LPG Limited (NYSE: BWLP) announced a Q1 2025 cash dividend of USD 0.28 per share, approved by the Board, as reported on May 19, 2025, reaffirming its dedication to delivering consistent shareholder value. The dividend, representing a 75% payout ratio of Shipping Net Profit After Tax (NPAT), will be distributed to shareholders with a record date aligned with standard market practices, and payment expected shortly after the announcement, consistent with prior distribution timelines such as the Q4 2024 schedule, which had payments around late March 2025. This quarterly dividend translates to an annualized dividend yield of 10%, based on the share price at the end of March 2025 or 15.47% as of May 27^th 2025, making BWLP an attractive option for income-focused investors. The Company’s financial strength, underpinned by a Q1 2025 NPAT of USD 46 million, operational cash flow supporting a liquidity position of USD 633 million, and strategic fleet optimization with 79% of Q2 2025 fleet days fixed at USD 35,000 per day, ensures the sustainability of this dividend despite a slight reduction in net leverage to 31%. With no reinvestment option, this mandatory distribution, alongside BWLP’s robust performance in the Very Large Gas Carrier (VLGC) market and a projected 2025 shipping profitability of USD 161 million from its time charter and fixed portfolio, positions the company as a compelling choice for dividend investors seeking both yield and growth in a dynamic LPG market.

1.5 Key Metrics

BW LPG Limited (NYSE: BWLP) achieved significant revenue growth from USD 811.73 million in 2020 to USD 3,563.75 million in 2024, reflecting a CAGR of 44.7%, driven by fleet expansion and global LPG demand, while operating income rose modestly from USD 269.05 million to USD 355.33 million (CAGR 5.7%), peaking in 2023, though the operating margin declined sharply from 33.1% to 10.0% due to rising costs such as dry-docking and financing, as noted in Q1 2025 with a USD 25,000 per day cash breakeven, underscoring the need for cost optimization despite a strong financial position with 31% net leverage and USD 633 million in liquidity as of Q1 2025.

Section 2: Business Updates and Financial Highlights

2.1 Recent Updates:

The below picture gives an overview of the recent updates:

2.2 Insights of Q1FY25:

Section 3: Key Risks and Outlook:

Section 4: Stock Recommendation Summary:

4.1 Technical Summary:

 Price Performance:

• BWLP's share price has dropped by 8.22% in the past three months. Similarly, in the long term, the stock has corrected by 13.53% over the past six months.

• The stock is leaning towards the lower band of its 52-week range of USD 22.31 and 52-week low price of USD 7.86, with the current price near an important support zone of USD9.50-USD 10.00, therefore expectations of upward movement in case these levels hold.
• The price is currently between its short-term (50-day) SMA and long-term (200-day) SMA, with the current RSI of 50.07, near mid-levels, with expectations and potential of upward movement.  

4.2 Fundamental Valuation

Valuation Methodology: Price/Earnings Per Share Multiple Based Relative Valuation    

Markets are trading in a highly volatile zone currently due to certain macroeconomic issues and geopolitical tensions prevailing. Therefore, it is prudent to follow a cautious approach while investing.

Note 1: Past performance is not a reliable indicator of future performance.

Note 2: The reference date for all price data, currency, technical indicators, support, and resistance levels is May 28, 2025. The reference data in this report has been partly sourced from REFINITIV.

Note 3: Investment decisions should be made depending on an individual's appetite for upside potential, risks, holding duration, and any previous holdings. An 'Exit' from the stock can be considered if the Target Price mentioned as per the Valuation and or the technical levels provided has been achieved and is subject to the factors discussed above.

Note 4: The report publishing date is as per the Pacific Time Zone.

Technical Indicators Defined: -

Support: A level at which the stock prices tend to find support if they are falling, and a downtrend may take a pause backed by demand or buying interest. Support 1 refers to the nearby support level for the stock and if the price breaches the level, then Support 2 may act as the crucial support level for the stock.

 Resistance: A level at which the stock prices tend to find resistance when they are rising, and an uptrend may take a pause due to profit booking or selling interest. Resistance 1 refers to the nearby resistance level for the stock and if the price surpasses the level, then Resistance 2 may act as the crucial resistance level for the stock.

Stop-loss: It is a level to protect against further losses in case of unfavorable movement in the stock prices.