Company Name: NEPTUNE ORIENT LINES LIMITED
| Research House: Maybank Kim Eng | Price Call: SELL | Target Price: 0.95 |
Maybank Kim Eng raised its target price on container shipping firm Neptune Orient Lines to $0.95 from $0.85, but kept its ’sell’ rating.
NOL shares were down 0.9% at $1.09 on Thursday and have fallen around 3% so far this year, underperforming the broader Straits Times Index.
Maybank Kim Eng said freight rates and fuel costs have shown signs of improvement and if this continues, they would help to stabilise NOL’s prospects in the near term.
The broker added that NOL might even break even for the remaining three quarters of the year after a poor first quarter. NOL reported January-March net loss of US$254 million ($324 million), much wider than a loss of US$10 million a year ago.
But overcapacity in the industry looks set to last until the end of 2013 and the global economy is still uncertain, Maybank said, adding that it is sceptical about the sector’s ability to continue relying on liner cooperation to sustain a freight rate recovery.
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