NOL

NOL: CS cuts earnings estimates for FY14 and FY15, and reduced TP to $0.95/share (from $1.15/share). House lowered rating to Neutral and expects a sale of its logistics unit to rekindle some interest in the name. Despite moderating capex substantially in 2014, net gearing of 213% continues to be at the upper end of credible corporate levels and tackling this no doubt underpins the company's efforts to sell its logistics unit. CS believes that this is worth about twice its book value (or around $1.2b), the sale of which could generate a profit of $600m and would carve about 25% off NOL's net debt. No timeline for this transaction has been publicly announced although media reports (Bloomberg, 30 Oct) cite CJ Korea Express as a probable bidder. However, house suspects that NOL might yet be tempted back to the yards to place orders given the absence of deliveries from 2015 onwards and the 19 vessels that it is redelivering to charter-parties both this year and next.