NOL

NOL earlier-than-expected return to profitability may push shares higher. Increased shipping volumes (+32% boxes), higher freight rates (+22%) lifted revenue by 53% yoy to $2.12bn and enabled container shipping group to book 2Q10 net profit of US$100m vs US$146m loss year earlier & US$98.5m loss in 1Q10 and beating full year street estimates of US$68m. The company had earlier predicted losses to continue until 1H10 but is now guiding for sharp improvement going into peak 3Q10.

2Q10 performance brings 1H10 bottomline to US$1.2m profit vs loss US$390.8m year earlier. No interim dividend declared but NOL plans to pay final dividend worth 20% of FY10 net profit. At S$2.13, stock trades at 1.5X P/B. First resistance at $2.18, support at $2.05.