London: Drewry Maritime Equity Research has initiated coverage on the global container liners’ sector with three major Asian container lines: Orient Overseas (OOIL), Neptune Orient Lines (NOL) and China Shipping Container Lines (CSCL).
For NOL, even as it addresses its cost structure, the turnaround, Drewry maintained, is unlikely before 2014. Drewry expects NOL to remain loss making at core levels this financial year and its weakened balance sheet and high net gearing remain a key concern.
One plus is that Drewry has identified APL Terminals as a “hidden gem” in the company’s asset portfolio.
“An opportune divestment of terminal assets even while retaining control will potentially unlock and add tremendous value for shareholders,” Drewry suggested. Drewry accord fair value in its base case for APL Terminals of $720m with a high case valuation reaching as much as $1bn. Drewry’s fair value for NOL is S$1.22 implying a 14% upside. [20/06/13]
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