NOL

NOL: CIMB maintains U/p with $1.10 TP. House raised loss estimates for NOL in 2013 as believe the very weak spot rates in 2Q13, which are below 2Q12 levels for the Asia-Europe and transpacific trades, will hurt performance. Also, the transpacific annual contracts were likely renewed at flat levels. Although NOL indicated during house conference that it is likely to perform better in 2013 than in 2012, think that the improvement could be marginal as cost reduction efforts are offset by the weaker market. House also reduce profit forecasts in 2014-15. Stay Underperform and target price remains based on an FY13 P/BV of 1.1x (2011 historical average). De-rating catalysts include spot rate erosion after the 1 July rate hikes.