NOL

NOL: Strong improvement in Jun performance may lift share price to head back above $2.00 resistance. The liner shipped 29% more volume to 221,900 boxes. Average revenue was 32% higher at US$2,892 per FEU as freight rates improved in major trade lanes, esp Transpacific, intra-Asia routes. Compared to May, average revenue +4.5%, while volume +4.4%. For 1H10, its shipping volumes grew 39% yoy while average revenue per FEU is up 11%.

Morgan Stanley highlights that given its strong proactive mgmt team & healthy balance sheet, NOL is well- positioned to ride out the volatile demand conditions & capitalize on low ship values to replace expiring chartered-in ships with lower-cost owned vessels; has Overweight call with $2.35 target.