Noble Grp

Noble Grp: Noble hosted a post-results analyst luncheon, during which CEO Yusuf Alireza shared his strategy and outlook. Discussions were mostly centred on the group’s shift towards an asset-light model, its cost-saving initiatives, and Noble’s refocus on its core competencies along the supply chain by re-evaluating individual business units and pruning selectively, if necessary. House note that Noble has placed shareholder returns as one of his top priorities since being appointed as CEO in Apr 2012. These measures certainly support his push for higher returns. A lighter asset base strengthens ROA and ROE. Tighter cost mgt bolsters profits. However, the group still has a long way to go before achieving its 20% ROE target. Overall, house see room for earnings expansion from the agriculture segment’s profit recovery and incremental improvement in China’s commodity demand. Mgt believes that the worst is over in China, and demand for its products should gradually improve.