NOL

NOL: NOL had a good 4% boost yesterday to close at $1.02, it's highest one-day gain since Sep '13, following the news report from Reuters yesterday that the group may be looking to sell its logistics division, APL. Based on NOL's target valuation of US$750-$900m (10-12x EBITDA), this translates to $0.36-$0.44/share. However, buyers are more likely to value the logistics business closer to US$600m ($0.29/share). Maybank-KE notes that the logistics unit has been a stable earnings contributor and a sale could unlock value within the group. In an all-cash sale, the group could use the proceeds to: 1) Pay down its high debt of 2.2x to 1.8x; 2) Reinvest in new vessels for longer-term growth; or 3) M&As. House opines that NOL could also return part of the proceeds to shareholders as special dividends, though these would be insignificant, given that a more prudent move would be to reduce debt. Maybank-KE maintains a Hold rating with TP of $1.05.