NOL

NOL: Detusche expect an operating loss for the coming qtr. 2Q results unlikely to be much better than 1Q core net loss of US$121m which is due to be announced after market on 7 Aug. Overall container shipping rates continued to be lackluster in 2Q. While Transpacific rates were stable, Asia- Europe rates declined on the back of weak demand and excessive supply. The Shanghai Containerization Freight Composite Index (SCFI) was 1,033 in 2Q on average versus 1,180 in 1Q. The Asia-Europe portion of the index was down 38% in 2Q versus 1Q. NOL is currently trading at 0.9x 2013E P/B, which in house view is not attractive. Hence comfortable with Hold recommendation and $1.14 TP. In regional container shipping, China Shipping Container Lines (Buy, HK$2.03) and Orient Overseas International (Buy, HK$50.10) both look more compelling with 2013E P/B valuations at 0.7x and 0.9x respectively. House have Buy recommendations on both CSCL and OOIL.