Stock Name: NOL
Company Name: NEPTUNE ORIENT LINES LIMITED
Nomura Research in an Aug 23 research report says: "NOL P7 monthly container revenue continued to sequentially decline (-11% y-o-y, the first month of double-digit negative growth). However, average freight rate sequentially rebounded (+1.8% p-p) due to cargo mix and bunker surcharges.
"We expect volumes and freight rates to sequentially improve in August due to partially successful peak season surcharge. This along with lower bunker prices will lead to lower 3Q losses, but we still expect 2H11 losses. With NOL reporting a 1H11 net loss of US$67 million, our earnings are under review given we are only estimating a full-year loss of US$73 million.
"Our revised price target of $1.65 is based on sum-of-the-parts valuation. We value the shipping business using mid cycle minus 1 standard deviation of 0.7x for FY11F and apply a 8x EV/EBITDA multiple to the port business. NEUTRAL."
Company Name: NEPTUNE ORIENT LINES LIMITED
| Research House: Nomura | Price Call: HOLD | Target Price: 1.65 |
Nomura Research in an Aug 23 research report says: "NOL P7 monthly container revenue continued to sequentially decline (-11% y-o-y, the first month of double-digit negative growth). However, average freight rate sequentially rebounded (+1.8% p-p) due to cargo mix and bunker surcharges.
"We expect volumes and freight rates to sequentially improve in August due to partially successful peak season surcharge. This along with lower bunker prices will lead to lower 3Q losses, but we still expect 2H11 losses. With NOL reporting a 1H11 net loss of US$67 million, our earnings are under review given we are only estimating a full-year loss of US$73 million.
"Our revised price target of $1.65 is based on sum-of-the-parts valuation. We value the shipping business using mid cycle minus 1 standard deviation of 0.7x for FY11F and apply a 8x EV/EBITDA multiple to the port business. NEUTRAL."
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