AVI (AVI) – Craving Consumption

AVI has commendably grown margins through the current bout of weak consumption. In the current low capex environment, we believe volume declines may hurt profitability. We find AVI’s portfolio tiering across its various products to be crucial to its market defensiveness, however, highlight chinks in some product tiers. We argue that AVI’s fishing business'(I&J) transformation credentials may be insufficient to avoid a reduction in their Hake Deepsea Trawl fishing rights come the 2020 Fishing Rights Allocation Process.

We provide a perspective of Green Cross’ prospects under new management and point to the need for GC to identify a core target market to which it can cater to effectively.