NOL

NOL: (S$0.98) Selldown on completion of APL Logistics sale
NOL tumbled to a low of $0.975 (-3.9%) at mid-day, steeper than the average 1% loss for regional liner peers.

The weak performance came on the back of new vessel orders by German firm Hapaq-Llyod as the world's fourth largest ocean carrier continued the fight for market share.

Separately, NOL completed the sale for APL Logistics to Kintetsu World Express for an estimated US$1.2b, subject to adjustments for net cash and net working capital of the logistics business.

Post-sale, NOL's net gearing is expected to halve from a staggering 2.2x to 1.1x, but still above peers' average of 0.58x.

However, prospects remain grim as overcapacity in the liner industry is expected to continue in 2015 and amid a competitive freight rate environment even as bunker prices stabilise.

With the recent sell-off wiping out 19% of its market cap since 28 Apr, NOL is now trading at a 24% discount to the street's 12-month average TP of $1.22.

Bloomberg consensus has 8 Buy and 10 Hold ratings on the counter.