Friday 21 February 2014

Neptune Orient Lines

UOBKayhian on 21 Feb 2014

FY14F PE (x): 20.8
FY15F PE (x): 8.0

Net loss in 4Q14; below consensus. Revenue declined 7% yoy each in 4Q13 and 2013
to US$2.3b and US$8.8b respectively, dragged by lower freight rates. Net loss widened
by 51% yoy to US$137.2m in 4Q13. Full-year loss narrowed by 82% yoy to US$76m,
below consensus of a US$22m loss. 2013 core EBIT was up 9% to a loss of US$167m.
Maintain BUY and reduce target price to S$1.20 from HK$1.30, based on 1.1x PB, which
is its mean P/B since 2010. NOL is experiencing a significant fleet renewal and operating
efficiency would significantly improve when the renewal finishes in 2015.

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