Feb 21: NOL, Genting, ARA

Shares in Singapore ended weaker on Thursday in line with regional markets. The Straits Times Index fell 2.15 points, or 0.07%. Here are some stocks and factors that could affect the market this Friday morning:

Neptune Orient Lines sank deeper into the red with a 51% increase in net loss to US$137 million for the fourth quarter ended December, led by lower revenue, a jump in administrative expenses and restructuring costs.

Genting Singapore posted a fourth-quarter earnings of $140.3 million, up 5% from $133.2 million a year earlier. Revenue fell 13% to $692.9 million.

ARA Asset Management saw net profit for the fourth quarter ended December jump 25% from $17.69 million to $22.13 million on the back of revenue rising 19% to $43.83 million.

Rex International Holding said its jointly-controlled entity, Lime Petroleum Norway AS has signed an agreement with North Energy ASA to acquire a 20% stake in a new licence in Norway, PL509CS.

Aztech Group said the group registered earnings of $6.47 million for the full year ended 31 December 2013 from $230,000 from a year ago. Total revenue for FY2013 improved by 7.8% against the same period last year to $241.15 million.

Sheng Siong Group said net profit for the three months ended December rose to $9.3 million, or 0.67 cent per share. Revenue gained 5.9% to $170.4 million during the quarter, representing a 0.5 percentage point improvement in net profit margin to 5.5%.

Jan 9: Blumont, Loyz, NOL

Singapore shares closed higher, recovering from three sessions of falls as strong US trade data bolstered sentiment across Asia. The ST Index rose 29.77 points, or 0.95%, to close at 3,150.65 on Thursday. Here are some stocks and factors that could affect the market this Friday morning:

Blumont Group, which suffered a sudden implosion in its share price in October, has canceled its proposed acquisition of Hudson Minerals Holdings, which has interests in an Indonesian iron ore exploration company.

Loyz Energy on Thursday announced that it plans to issue some 12.2 million new shares at 35.97 cents per share to partially fund its planned purchase of a 49% stake in its US unit Loyz Rex Drilling Services.

Global container shipping group, APL, which is owned and operated by NOL, said on Thursday that it would move from a geographically-organized structure to a functional one to drive its business forward. As part of the realignment, the role of current Regional and Country leads will be organized into Commercial and Operations functional leads.

Singapore will continue to grow the energy and chemicals industry, and the government stands fully behind energy and petrochemicals companies to help them succeed, Prime Minister Lee Hsien Loong said. Lee was speaking on Wednesday at the opening ceremony of ExxonMobil's Singapore Chemical Plant expansion on Jurong Island. The multi-billion-dollar expansion is the largest manufacturing investment in Singapore.


 

OCBC downgrades Neptune Orient Lines to Hold

OCBC downgrades Neptune Orient Lines (N03.SG) to Hold from Buy as "freight rate weakness can't be ignored."

The house notes that average freight rates have fallen by over 13% on quarter in 2Q13.

While the low-fuel cost environment and ongoing cost-saving initiatives are expected to benefit NOL, the house lowers its forecasts "in light of weaker freight rates and anticipation of a slightly disappointing peak season."

It cuts its target price to $1.17 from $1.38.

Rates, valuations bottoming for container shippers: UOB

UOB KayHian says that Asia-Europe container freight rates have fallen close to the cash breakeven level, but recent slot utilisation improvement offers firm support until the next rate increase.

It adds, the US$200/FEU ($246/FEU) increase in Trans-Pacific contractual rates has resulted in better profitability on TP routes. "Rates and valuations are bottoming out simultaneously, creating a buying opportunity." UOB says that the sector's 12-month forward P/B has fallen to 0.9x, and taking a one-year view, it prefers carriers with greater TP exposure such as Orient Overseas (0316.HK) and Neptune Orient Lines (N03.SG), while China Shipping Container Lines (2866.HK) is a good play for the potential AE rate recovery.

Shipbuilding stocks gain on strong China trade

Shares of Yangzijiang Shipbuilding (Holdings) rose as much as 6.5% on hopes that improving Chinese trade data would translate into more orders in the longer term.

China said on Thursday its exports grew 14.1% in December from a year ago to hit a seven-month peak, handsomely beating market expectations of a 4% rise.

“Shipping related stocks are in play because of the good Chinese trade data. With better trade, shipping could improve, which could in turn benefit the shipbuilders,” said a local trader.

Yangzijiang shares climbed 5.1% to $1.135, while rival Cosco Corp (Singapore) was up 5.1% at $1.035. Both were the third and fourth most actively traded stocks by value.

Container shipping firm Neptune Orient Lines gained 0.4%, extending Thursday's 7% gains. Hutchison Port Holdings Trust, which operates ports in China, rose 3% to $0.845.

Container shippers likely profitable in 1Q13: UOB-KayHian

1Q13 is very likely to be profitable for the container shipping sector after 1Q12’s huge losses, UOB KayHian says, noting Asia-Europe and trans-Pacific rates are now above break-even levels and cargo volume will recover in February-March on the Lunar New Year effect.

“Carriers managed to push through rate increases at the beginning of the year given good capacity discipline and the come-back of cargo volume, and there will be another round of rate increases in mid-January.”

It expects the supply-demand equilibrium to be healthier in 2013-15 as self-discipline strengthens over time.

The house expects NOL (N03.SG) to see earnings upgrades in 2013, driving up the share price, on the sale of its office building and the potential 10%-15% improvement in trans-Pacific contractual rates; “Long-term earnings drivers for NOL could be improved efficiency alongside delivery of larger vessels in 2013-15.”

It rates NOL at Buy with $1.54 target. The stock is up 2.9% at $1.25.

OCBC tips NOL as favoured shipping play

OCBC upgrades the shipping sector to Overweight. “While challenges remain and the overcapacity issue continues to linger, we are optimistic over the prospects for the industry in 2013 on the back of an improving economic situation.”

It notes shipping lines could post slight net profits at end-2012 amid efforts to manage capacity and collectively raise rates. OCBC doesn’t see any catalyst to boost bunker-fuel prices near-to-medium term as demand remains weak and liners manage costs. It tips Neptune Orient Lines (N03.SG) as its favoured play.

It notes a few major container-shipping lines reiterated plans to push general rate increases, while NOL’s cost-savings plan has saved it US$360 million ($439 million) year-to-date. “The collective effort by liners to coordinate rate increases sends a positive message that the industry is unwilling to tolerate further cuts to their profitability in order to maximise capacity utilization. While this is contingent on individual liners reining in market share ambitions, we remain optimistic that a tacit agreement to control capacity would follow through.” It rates NOL at Buy with $1.38 fair value.

The stock is up 2.2% at $1.14.

NOL's Europe service cuts not unexpected: Analyst

NOL’s decline reflects overall market sentiment, rather than its APL unit announcing it and alliance partners would suspend some Europe services, an analyst says.

“I wouldn’t really read too much into the decline,” he says. “Everyone has already factored in weakness in the trade routes.”

He adds, no one expected much of a peak season. The move does show some discipline and NOL’s efforts to address cost issues, he says. The stock is down 0.9% at $1.085.

STI +0.2%; Risk appetite restrained: UOB

Singapore’s STI is up 0.2% at 3,045.70, dialing back early gains a tad in late afternoon trade as European markets slip into the red. “Risk appetite is likely to be restrained ahead of Bernanke’s speech on Friday,” says UOB Economic-Treasury Research in a note.

In a separate note, it says “the market is increasingly cautious ahead of the Jackson Hole Symposium with sentiment tilting towards Fed Ben Bernanke disappointing the market and staying silent on QE.”

UOB KayHian technical analysis tips the index is likely to trade sideways for now; “do keep an eye on 3,020 as an immediate support and 3,090 being the resistance to break for further upside.” Volume is tepid at 914.2 million shares valued at $749.8 million; gainers top losers 1.2 to one.

NOL is one of just eight STI components in negative territory, falling 1.8% to $1.115; an analyst says it’s not a material move. Heavyweight SingTel turns negative, shedding 0.3% to $3.35. SembMarine is up 0.8% at S$5.04 after its Brazilian unit landing a US$674 million ($845 million) contract for two FPSOs from a Petrobras-related consortium.

Morgan Stanley tips sell NOL on rallies

Morgan Stanley downgrades NOL to Equalweight from Overweight. “As traditional peak season approaches an end in September-2012, we expect no major share price catalysts to drive performance in 4Q12."

It expects further earnings recovery in 2H12, with a 5% on-year rate recovery and 1% cost/unit decrease despite higher bunker prices, but it forecasts a US$47 million ($58.5 million) FY12 loss, excluding one-offs, vs US$28.5 million profit previously on a weaker 1H12. "Consensus expectations of breakeven appear optimistic" and the risk of further downgrades is high, it says.

Given macro uncertainties, it cuts its 2013-14 earnings forecasts by 53% and 15% respectively on more conservative freight-rate and volume assumptions. It cuts its target to $1.20 from $1.50, based on 0.7X FY12 P/BV from 0.9X previously, in line with regional peers. “We would be sellers into potential rallies led by earnings turnaround in peak season, but buyers on dips to 0.5X 2013e P/BV.”

NOL is +3.4% atS$1.21 at 3:40 pm.

July 3: NOL, United Engineers, Midas, Perennial China Retail Trust

Singapore stocks may rise on expectations that central banks from Washington to Frankfurt may ease monetary policy to spur economic growth.

The Straits Times Index ended 32.14 points higher at 2,910.59. In the broader market, overall volume traded was 1.19 billion shares. Gainers outnumbered losers 250 to 125.

Here are some stocks and factors to watch:

Shipping and logistics group NOL Group, which has reported losses for the past five quarters, said it intends to sell its Singapore headquarters building at Alexandra Road.

United Engineers said it won three environmental engineering contracts worth more than $70 million.

Midas Holdings said its joint venture company has secured a 860 million yuan ($172 million) contract to supply metro train sets to the Dongguan Rapid Railway R2 Line Project.

Perennial China Retail Trust has exercised its option to increase its stake in Chengdu Longemont Shopping Mall Development to 80% from 50%,for 2.24 billion yuan ($447 million).

Sin Heng Heavy Machinery said it has entered into a distributorship agreement for hydraulic crane manufacturer, Kato Works.

KSH Holdings said it intends to be a 40% stakeholder in Unique Resi Estate, which was on June 29 awarded the $31 million tender for the 21,900 sq ft freehold site at Whitley Road. Unique Resi is currently a wholly-owned subsidiary of Heeton Holdings.

The manager of K-REIT Asia, K-REIT Asia Management Limited announced the appointment of Chin Wei-Li, Audrey Marie as chairman of its board, effective July 3. Dr Chin, 54, an independent Director on NTUC Income Insurance Co-operative Singapore, takes over from Tsui Kai Chong who has served on the board since November 28, 2005.


 

Neptune Orient at 4-month low after Q1 loss

Shares of Neptune Orient Lines fell as much as 3 percent to a four-month low after the container shipping firm reported a disappointing first-quarter net loss and warned of a bleak outlook.

NOL, around two-thirds owned by Singapore state investor Temasek Holdings, reported January-March net loss of US$254 million ($317.6 million), much wider than a loss of US$10 million a year ago.   

The poor results prompted Maybank Kim Eng to cut its target price for NOL to $0.85 from $1.20, and keep its sell rating.

Neptune Orient Lines rated 'reduce' by Phillip Securities

Phillip Securities Research in a Feb 23 research report says: "NOL reported a very weak set of results due to high fuel costs and lower freight rates in the year. Net loss of US$320 million in the 4th quarter accounted for majority of losses in the year of US$478 million.

"While the Group's logistics business recorded a 6% improvement in core EBIT, its contributions are insufficient to offset huge losses from the Liner business. During the results briefing, management highlighted a cost savings goal of US$500 million for FY2012E to enhance the competitiveness of the Group's Liner business.

"We expect losses to narrow in FY2012E with the improved cost structure of the Group's new deliveries. Target price of $1.24, based on 1.0X FY12E BVPS. MAINTAIN REDUCE."

Feb 23: NOL, Genting Singapore, SIA, Olam

Singapore shares may fall on Thursday, following losses on Wall Street overnight as weak data on European business activity fanned concerns of a recession in the euro zone.

The benchmark Straits Times Index fell 0.97% on Wednesday to 2,995.59 points. Here are some stocks and factors to watch, according to Reuters:

Neptune Orient Lines, the world's sixth largest container shipping firm, will be in focus after it reported on Wednesday a larger-than-expected quarterly loss due to high fuel costs and lower freight rates.

Casino operator Genting Singapore said on Wednesday it was looking to invest in new projects after it swung to a net profit in the fourth quarter and announced its first-ever dividend.

Singapore Airlines cut its cargo capacity by 20% as global economic slowdown led to persistent weakness in demand and high jet fuel prices piled pressure on its profitability.

Commodity firm Olam said it has launched and priced the issue of Singapore dollar denominated perpetual capital securities and will raise $275 million through the offering.

Oil and gas services firm Ezion said it plans to raise net proceeds of about $95 million through a placement of 110,000 shares at $0.88 each-- a 6.6% discount to the weighted average price for trades done on Tuesday. Most of the proceeds will go towards the acquisition of offshore and marine assets.

Neptune Orient Lines rated 'hold' by Maybank-Kim Eng

Maybank-Kim Eng Research in a Feb 7 research report says: "NOL reported a 6% y-o-y increase in container shipping volumes for the six weeks from Nov 19, 2011 to Dec 30, 2011. This was helped by the burgeoning intra-Asia traffic growth.

"However, the average revenue per forty-foot equivalent unit (FEU) fell by 14% y-o-y to about US$2,265/FEU, reflecting persistent industry challenges, in particular on the long-haul routes. The recent positive macroeconomic data from the US and China may support a more sustainable rate recovery in 2H12 coupled with further capacity rationalisation.

"In the near-term however, a better buying opportunity could arise when rates are widely expected to decline post the seasonally slow CNY period. We raise our target price to $1.35, based on mid-cycle valuation of 1.0x FY12F P/BV. MAINTAIN HOLD."

Neptune Orient Lines rated 'hold' by Kim Eng

Kim Eng Research in a Dec 6 research report says: "NOL reported a large widening in its net loss to US$91.1 million in 3Q11 from US$57.0 million in 2Q11 despite revenue improvement of 2.9% q-o-q, which generally disappointed the market.

"Falling freight rates due to excess capacity on key routes and higher bunker fuel prices have combined to hurt container shipping lines. The group's quarterly losses could further widen in the off-peak season in 4Q11.

"Though current stock valuation is inexpensive, we think investors should ideally wait for more positive signs of moderating freight rate decline before taking the plunge. Target price of $1.10, based on 0.8x FY12F P/BV. HOLD (reinitiating coverage)."

Dec 5: NOL, SGX, Sim Lian, Hi-P

Singapore shares are likely to open higher today, buoyed by data showing US unemployment fell to a 2-1/2-year low and as Italy unveiled a package of austerity measures to shore up its strained finances and stave off a euro zone crisis.

The benchmark Straits Times Index gained 0.42% to 2,773.36 points on Friday.

Here are some stocks and factors to watch, according to Reuters:

Container shipping group Neptune Orient Lines (NOL) may be in focus after a German paper Die Welt reported on Saturday the firm has resumed talks about buying German rival Hapag-Lloyd (HPLG.UL), without identifying its sources.

Singapore Exchange said turnover in securities trading on its bourse fell 37% in November year-on-year to $25.4 billion, hurt by global uncertainties. Securities daily average value was $1.2 billion, down 40% from a year earlier.

More than 200 workers at a electronics plant owned by Hi-P International in Shanghai remained on strike for a third day on Friday to denounce what they said was a management plan for mass layoffs.

Sim Lian Group said its wholly-owned subsidiaries have been jointly awarded the tender for a land parcel in Singapore with a site area of 18,954.5 square metres for commercial and residential development.

UMS, which makes semiconductor equipments, said it will acquire two manufacturing companies, Integrated Manufacturing Technologies and Integrated Manufacturing Technologies Inc for $28 million in total.

Nov 1: NOL, CapitaMall Trust, Suntec REIT, Raffles Medical

Singapore stocks are expected to fall after Greek Prime Minister George Papandreou pledged to put the European Union’s agreement on financing for Greece to a referendum, reviving concerns the country will default on its debt.

The Straits Times Index dropped 1.7% to 2,855.77 at closing, its first decline in six days. Almost four stocks dropped for each that rose in the index of 30 companies. The gauge advanced 6.8% this month, the most since July 2009.

The manager of CapitaMall Trust (CMT), says 139,665,000 new units have been successfully placed through a private placement at an issue price of $1.79 per unit, raising gross proceeds of $250 million.

Neptune Orient Lines, Asia’s No. 3 container line, posted a third straight quarterly loss because of falling freight rates and higher fuel costs. The US$91.1 million ($113.9 million) loss in the three months to Sept. 23 compared with a profit of US$282.3 million a year earlier, the Singapore-based company said in a stock exchange statement today. Sales dropped 9% to US$2.21 billion.

Sound Global has won a contract to build a wastewater treatment facility in Anshan City in China’s Liaoning province.

ARA Trust Management (Suntec), the manager of Suntec Real Estate Investment Trust (Suntec REIT), has announced a $410 million plan to remake Suntec City. The remake, which is scheduled to start in mid-2012, will comprise a $230 million capital expenditure in remaking Suntec City Mall and a further $180 million on Suntec Singapore International Convention and Exhibition Centre, which Suntec REIT holds an interest of 60.8%.

Wilmar International has named Ho Kiam Kong, 52, as chief financial officer.

Property developer Tuan Sing Holdings has posted a 89% y-o-y fall in net profit for the third quarter ending September 30, 2011 to $5.19 million. Revenue fell 75% y-o-y to $47.05 million.

Catalist-traded Hartawan Holdings said it plans to buy an Indonesian gold mining firm in a reverse takeover deal worth $300 million that would see Hartawan getting new controlling shareholders.

Raffles Medical Group, the private healthcare provider in Singapore and the region, says group net profit after tax grew 10.3% to $11.8 million in 3Q2011 from $10.7 million over the corresponding quarter last year.

Falcon Energy Group has placed orders for two jack-up rigs and two multi-functional support vessels (MFSVs) to expand its scope of services for the oil and gas industry.

Singapore Exchange said it had told MF Global’s Singapore unit not to take on any more derivative positions and to reduce existing positions with immediate affect, according to Reuters.

Neptune Orient Lines rated 'buy' by Phillip Securities

Phillip Securities Research in an Oct 4 research report says: "NOL underperformed the market by 27% over the past year on concerns over free falling freight rates, overcapacity in the container shipping industry and more recently, a weakening economic outlook.

"We revised our earnings forecasts southwards and expect more severe losses in FY11E and expect only marginal profits for FY12E. Our downwards revision for FY11E is due to lower than expected freight rates for P7 to P8, which we had earlier expected to reflect uplifts from surcharges.

"FY12E is lowered on downward revisions to our volume assumptions on weaker economic outlook and trade flow expectations. "We derive our target price of $1.40 based on 0.92X FY11/12e blended BVPS of US$1.15 and translating it at an exchange rate of 1.32SGD/USD. Upside of 31%. BUY"

Neptune Orient Lines rated 'neutral' by Nomura

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."