Stock Name: Noble Grp
Company Name: NOBLE GROUP LIMITED
Research House: DBS Vickers
Company Name: NOBLE GROUP LIMITED
Research House: DBS Vickers
DBS Vickers reiterates its positive view on Noble Group (N21.SG), rated Buy with a $2.60 target price. It expects a FY11F earnings growth to come from agriculture and energy: Berau contribution, higher Gloucester Coal volumes, contributions from existing and soon-to-be acquired sugar refineries, oil & gas ramp up, and a strong rebound in carbon credit prices.
It says damage to Japanese nuclear reactors and some steel mill closures following the March 11 earthquake should have a minimal impact on Noble, assuming Chinese, Korean and Southern Japanese mills take-up any shortfall from affected mills on reduced power supply. “While we expect rebuilding efforts to eventually increase steel demand; this should only take place longer term.”
It says damage to Japanese nuclear reactors and some steel mill closures following the March 11 earthquake should have a minimal impact on Noble, assuming Chinese, Korean and Southern Japanese mills take-up any shortfall from affected mills on reduced power supply. “While we expect rebuilding efforts to eventually increase steel demand; this should only take place longer term.”
It adds, “no meaningful impact on thermal coal demand is expected, as we understand peak-load plants in Japan are mostly oil-fired” and while the disaster may provoke a rethink on future nuclear power generation, “there is no evidence as yet of a concerted global switch to thermal-coal plants.”
Shares are down 1.0% at $2.03.
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