NOL

NOL: mgt notes 3Q peak season has not been good. Says, peak season surcharges were delayed and the quantum has been lower than earlier expectations; it appears as if customer demand in US and Europe has been weak and subdued. Cautions that the peak season may be shorter than usual this year. Adds, the visibility of fwd bookings has been poor, with no visibility beyond a month, vs visibility of 2-3mths in prior yrs.
Deutsche notes NOL’s comments are consistent with other industry players. Says its views of 4Q are more bearish than NOL’s and expects pretty severe rate pressures again for that quarter. Believes rates dropping below cash break-even is a real possibility. Forecasts US$133m net loss for FY11 (1H11 recorded US$67m net loss), worse than consensus’ US$85m net loss forecast. Notes, despite the stock trading at 0.8x FY11E P/B, it is not time to buy yet. The stock traded to a trough of 0.7x P/B in the 2008 global financial crisis. Keeps at Hold with TP $1.04.