NOL

NOL: Deutsche has 3Q12 results preview. House expect a qoq profit recovery. Expect a strong turnaround from a loss of US$118m in 2Q 2012 back to a net profit in 3Q as the spot rate increases in 1H take full effect. Transpacific route performed positively in 3Q with liners in the region telling house that vol and rates performed well, and they had a good 3Q peak season. Given recent AE rate declines, 2012 earnings forecast looks a little optimistic. 4Q outlook : capacity discipline should halt rate declines in AE. NOL is currently trading around 1x 2012E P/B. Overall, house prefer dry bulk shipping over container shipping, because of lower valuations and a more compelling supply/demand scenario next year. Top Buy picks are China Shipping Development and Pacific Basin.