NOL

NOL: Goldman Sachs upgrades NOL to Buy from Neutral and lifted TP to $1.30.

Echoing other houses, the house favors container over dry bulk and in particular Transpacific routes to outperform in 2015E, citing favourable supply-demand outlook and industry structure. NOL derives ~50% of revenues from Transpacific container segment. As such, 2015 could be turning point for the company after four consecutive years of losses.

Post disposal of APL Logistics for US$1.2b, gearing is pared down significantly to about 100%. NOL is trading at 0.7x P/B, lowest in industry while having higher-than-peers ROE sensitivity to margin, and substantial margin improvement is expected in 1Q15 and 3Q15.

Separately, riding on stronger transpacific trade volumes is also a smaller player Samudera Shipping, listed on SGX, significantly undervalued at 0.3x P/B.