ShareJunction - Member Posts

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Fyi.
Added Analysis on Falling Oil Price benefits freight rate profitability is not included previously.

MetalTrader3 ( Date: 09-Nov-2014 21:38) Posted:

Strategy (either#1 or 2), Tips, &Solution for NOL Management (All need follow to turn profitable):

My advise (Superior Strategy #1):
- Sell entire APL (Shipping) to different buyers.
- Retain APL (Terminal & Logistics)

This strategy will generate positive profits in hundred of millions b4 tax per quarter instantly. As only most profitable business are retained.

My Advise (Superior Strategy #2):
- Sell half of APL (Shipping) to manage undercapacity Liner Operation. This will improve liner revenue & having lesser scale of vessels & operating costs to maintain.

- Issue APL (Logistics) as IPO to retain overall control. Sell 40% of APL Logistics shares to buyer, retain 60%. Work with buyers to expand network & business.

These need to be operated simultaneously to turn profitable.

Tips for NOL Management:
- Your freight pricing department should be sacked: Your freight rate priced few hundred above HPL, OOCL, Maersk Line for many of regions. That is why customers used other carrier instead, resulting in slots not filled in NOL.

- Your previous director ordered too many new vessels amounting to 2 billions that results in subsequent years losses. This resulted in undercapacity.

Solution:
- Pls work to make your freight rate as competitive as Hapad Lloyd.
- Pls lease more new vessels to Maersk & sell more old vessels away as you don't need so much vessels

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Fyi

MetalTrader3 ( Date: 06-Nov-2014 07:36) Posted:

Dear NOL Mgmt,
My advise:
- APL Logistics (1 billion) is too little. NOL should aim for 1.2 to 1 5 billion. It will be best to release as IPO to enable flexibility & able to retain business by only selling 40%.

- For APL Shipping, a need to sell more vessels to manage undercapacity.

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Fyi

MetalTrader3 ( Date: 30-Oct-2014 16:20) Posted:

On 30 Oct- NOL heed advice & in process selling APL for 1 Billion. (As stated in my strategy before it happens).

Actualized on sales figure & prediction.

MetalTrader3 ( Date: 28-Oct-2014 17:34) Posted:

Dear NOL Mgmt & Shareholders,

NOL Fundemental
- APL (Shipping)
- APL TERMINALS
- APL LOGISTICS (May Consider for Sales)

3 Strategies for NOL (Focusing on APL Logistics)~Estimated $800 Millions to 1 Billion

1) Up Strategy: Sell APL Logistics through IPO issuance [Result: Achieve Higher Combined Value & Flexibility to NOL & Shareholders]
2) Mid Strategy: Sell APL Logistics through Buyer [Result: Achieve Potential Mid Increase Combined Value to NOL & Shareholders]
3) Down Strategy: Delaying Sales of APL Logistics [Result: Mother Share enduring turbulent market to NOL & Shareholders]

My Analysis:
There is no reason not to sell APL Logistics in this turbulent market, when cash needed in shipping downturn economic period can almost half the debts & continue improving on the operations. Since APL Logistics only make up of around 16% of profits, however it can reduce nearly 40 to 50% of debts.
Borrowing is not a wise option, and without APL Logistics:
- Lesser Assets & Manpower to maintain
- Can use 3rd Party Logistics without over reliance on APL Logistics for better cost rate

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I would prefer Strategy 2.

Strategy (either#1 or 2), Tips, &Solution for NOL Management (All need follow to turn profitable):

My advise (Superior Strategy #1):
- Sell entire APL (Shipping) to different buyers.
- Retain APL (Terminal & Logistics)

This strategy will generate positive profits in hundred of millions b4 tax per quarter instantly. As only most profitable business are retained.

My Advise (Superior Strategy #2):
- Sell half of APL (Shipping) to manage undercapacity Liner Operation. This will improve liner revenue & having lesser scale of vessels & operating costs to maintain.

- Issue APL (Logistics) as IPO to retain overall control. Sell 40% of APL Logistics shares to buyer, retain 60%. Work with buyers to expand network & business.

These need to be operated simultaneously to turn profitable.

ElvisBoo ( Date: 02-Dec-2014 16:47) Posted:

How much do APL logistics cost? If NOL decides to sell it away, will it be better as there's a lump sum funds to use, or will it be worse as there will one less money generating machine. Wise men please enlighten me.

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Oil Price is key for NOL profitability margin. With continously falling oil price (Oil Price Crisis falled till $79, had great possibility to fall till $55 to $65 by next year). Oil price is unlikely to recover till Mid 2015, supported by OPEC meeting in Jun 2015.

Sea Law (Vol 2)
The word "bunkers" has a unique meaning in international shipping. The term is universally understood to mean fuel for vessels. Without bunkers, ships cannot sail. Bunker costs can also be the largest operating expense incurred on an ocean voyage.

The bunker price category is most interesting because fuel costs can change from port to port. Price disputes usually can be avoided if parties include bunker price clauses in charter contracts.

World events can drastically affect oil prices. The 1973 Middle East War and the 1990 Persian Gulf conflict caused bunker values to vary greatly from day to day.

http://www.navlaw.com/articles/v2/bunker-fuels-often-focal-point-of-disputes.htm

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Sea Law (Vol 2)
The word "bunkers" has a unique meaning in international shipping. The term is universally understood to mean fuel for vessels. Without bunkers, ships cannot sail. Bunker costs can also be the largest operating expense incurred on an ocean voyage.

The bunker price category is most interesting because fuel costs can change from port to port. Price disputes usually can be avoided if parties include bunker price clauses in charter contracts.

World events can drastically affect oil prices. The 1973 Middle East War and the 1990 Persian Gulf conflict caused bunker values to vary greatly from day to day.

http://www.navlaw.com/articles/v2/bunker-fuels-often-focal-point-of-disputes.htm

earlybird14 ( Date: 02-Dec-2014 15:12) Posted:

Just continue live with your own world.

MetalTrader3 ( Date: 02-Dec-2014 14:42) Posted:

Dear earlybird14,
Quoted: Sending a 20 foot container to europe from china is less than 1000 USD"

● My remark: This is because of distance travelled. Do you know shipping from Singapore to Europe costs $2000 per 20ft cntr? Fyi: We use short cut in shipping (ft, cntr)

Quoted: If oil price go lower further, some shipment may change to airfreight which demand for faster delivery but affordable.

● My remark: You have poor knowledge of why people ship by Airfreight & Seafreight. - What is the cost of putting a 20ft in seafreight compared to airfreight? Airfreight is for perishable & high tech or expensive products. (Advantage: Shorter time transit & Better handling)
Seafreight is for bulky & heavy goods that are more economical to ship by sea.
Fyi: You can check statement with Logistics personnel & see if is feasible. Logistics & Supply Chain will probably disagree with this statement.

Quote: Alliance? There are more than 100 container shipping lines in the world. Top 3 Maersk, MSC and CMA want to form P3 are rejected by CHina, P2 are on the way. So, top 3 are not in any alliance. G6 only formed by 6 companies only.

● My remark: Top 3 may not be in alliance? You are wrong again. Maersk Line & MSC are in alliance.
www.seatrade-global.com/news/americas/fmc-approves-2m-alliance-of-maersk-line-and-msc.html

NOL G6 are also alliance.
* Pls do not speak just because you feel like speaking. Your fact is wrong. FYI: Shipping is either alliance or merger, or both to survive to tap on shared network & infrastructures.

I won't comment further because your shipping knowledge is all wrong

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Dear earlybird14,
Quoted: Sending a 20 foot container to europe from china is less than 1000 USD"

● My remark: This is because of distance travelled. Do you know shipping from Singapore to Europe costs $2000 per 20ft cntr? Fyi: We use short cut in shipping (ft, cntr)

Quoted: If oil price go lower further, some shipment may change to airfreight which demand for faster delivery but affordable.

● My remark: You have poor knowledge of why people ship by Airfreight & Seafreight. - What is the cost of putting a 20ft in seafreight compared to airfreight? Airfreight is for perishable & high tech or expensive products. (Advantage: Shorter time transit & Better handling)
Seafreight is for bulky & heavy goods that are more economical to ship by sea.
Fyi: You can check statement with Logistics personnel & see if is feasible. Logistics & Supply Chain will probably disagree with this statement.

Quote: Alliance? There are more than 100 container shipping lines in the world. Top 3 Maersk, MSC and CMA want to form P3 are rejected by CHina, P2 are on the way. So, top 3 are not in any alliance. G6 only formed by 6 companies only.

● My remark: Top 3 may not be in alliance? You are wrong again. Maersk Line & MSC are in alliance.
www.seatrade-global.com/news/americas/fmc-approves-2m-alliance-of-maersk-line-and-msc.html

NOL G6 are also alliance.
* Pls do not speak just because you feel like speaking. Your fact is wrong. FYI: Shipping is either alliance or merger, or both to survive to tap on shared network & infrastructures.

I won't comment further because your shipping knowledge is all wrong.

earlybird14 ( Date: 02-Dec-2014 13:52) Posted:

Shipping volume is subjected to world economic, demand and supply. it is the cheapest way to send good to oversea. Sending a 20 foot container to europe from china is less than 1000 USD. If oil price go lower further, some shipment may change to airfreight which demand for faster delivery but affordable.

Alliance? There are more than 100 container shipping lines in the world. Top 3 Maersk, MSC and CMA want to form P3 are rejected by CHina, P2 are on the way. So, top 3 are not in any alliance. G6 only formed by 6 companies only. If Alliance can work for price war avoidance, container freight rate won' t be so low as per today market.

Components for NOL, Their restructuring & cost saving doesn' t pay anything to stakeholder so far, when they declare 20million loss, some asia shipping line from Japan and Korea have declared breakeven, don' t mention about 2 billion profit from Maersk line.

Not talking bad but talking fact. NOL has a price, without selling APL logistic, NOL is fully valued now.

MetalTrader3 ( Date: 02-Dec-2014 13:28) Posted:

3 Critical Components (My version)
When oil price is lower, shipping volume is more likely to increase. [Economic Theory- cheaper freight rate]

In this era, shipping lines build alliance to increase network & facilities shared. Price war are avoided in shipping. [Maritime studies]

Component for NOL:
- Price of Bunker (Oil)- The lower it is, the better: *Major Factor to profitability margin
- Restructuring & Cost Saving
- Facilities, Manpower & Inventories Managemen

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● When oil price is high, it eats into profitability.
● When oil price is low, it boost profitability.

Comparing the period when NOL makes profit (Period of sustainable & low Oil Price) vs loss (Increasing Oil Price in past 5 years).

There is always a correlation between Oil Price & Profitability. NOL is about to enter sustainable & low Oil Price period.

earlybird14 ( Date: 02-Dec-2014 13:52) Posted:

Shipping volume is subjected to world economic, demand and supply. it is the cheapest way to send good to oversea. Sending a 20 foot container to europe from china is less than 1000 USD. If oil price go lower further, some shipment may change to airfreight which demand for faster delivery but affordable.

Alliance? There are more than 100 container shipping lines in the world. Top 3 Maersk, MSC and CMA want to form P3 are rejected by CHina, P2 are on the way. So, top 3 are not in any alliance. G6 only formed by 6 companies only. If Alliance can work for price war avoidance, container freight rate won' t be so low as per today market.

Components for NOL, Their restructuring & cost saving doesn' t pay anything to stakeholder so far, when they declare 20million loss, some asia shipping line from Japan and Korea have declared breakeven, don' t mention about 2 billion profit from Maersk line.

Not talking bad but talking fact. NOL has a price, without selling APL logistic, NOL is fully valued now.

MetalTrader3 ( Date: 02-Dec-2014 13:28) Posted:

3 Critical Components (My version)
When oil price is lower, shipping volume is more likely to increase. [Economic Theory- cheaper freight rate]

In this era, shipping lines build alliance to increase network & facilities shared. Price war are avoided in shipping. [Maritime studies]

Component for NOL:
- Price of Bunker (Oil)- The lower it is, the better: *Major Factor to profitability margin
- Restructuring & Cost Saving
- Facilities, Manpower & Inventories Managemen

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I believe NOL is standing in golden period of sustainable oil price era (Current Oil price $79, then have a great opportunity to drop till $55 to $65).

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Oil Price is likely to continue till Jun to July, with OPEC scheduled on Jun next year. Oil & Gas companies made billions by jacking oil price up in past 5 years, which made oil cost unsustainable for many companies depending on Oil.

Oil crisis (Falling Oil Price) will rejuvenate many companies (Air & Shipping), allowing them to make profitable margin from their transportation of goods. In this era, alternative energy source like shale oil have entered the market to compete with oil. Thus, a competitive oil price benefits global economy. Oil tycoon will just reduce their operations. Economy should have sustainable oil price (low).

earlybird14 ( Date: 02-Dec-2014 13:03) Posted:

If oil price fall to below 50 dollars, it will burst a lot of oil & gas companies which are highly debted and cause another 2008 crisis. 1988 oil crisis will repeat again. do your own due diligent to know what happen in 1988 when oil price crash from 40 to 10 dollar.

MetalTrader3 ( Date: 02-Dec-2014 12:58) Posted:

New Updates @ 2 Nov
Oil price may fall to $50 by next year, which made companies dependent on Oil profitable.

If Oil price falls to $50, impact of shipping revival (uprise to profitability) next year will be great.

mobile.bloomberg.com/news/2014-12-01/billionaire-shale-pioneer-says-drilling-will-slow.htm

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3 Critical Components (My version)
When oil price is lower, shipping volume is more likely to increase. [Economic Theory- cheaper freight rate]

In this era, shipping lines build alliance to increase network & facilities shared. Price war are avoided in shipping. [Maritime studies]

Component for NOL:
- Price of Bunker (Oil)- The lower it is, the better: *Major Factor to profitability margin
- Restructuring & Cost Saving
- Facilities, Manpower & Inventories Management

earlybird14 ( Date: 02-Dec-2014 13:08) Posted:

3 critical components for NOL to increase their operation margin, shipping volume, container vessel chartered rate and fuel oil bunkering price. If low oil price create economic crisis, shipping volume will be reduced, price war will come in, even with low fuel oil bunkering price, NOL also hardly to be profitable.

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Oil Related Updates
OPEC seemed to be letting non-OPEC countries resolve the market surplus and surprised the industry by not scheduling another meeting until June 5.

Remark: I believe oil price will continue declining & not recover until June to July period. Many sectors (Air & Shipping) are likely to benefits from -50% oil price only oil price fall till $50.

www.washingtonpost.com/business/economy/2014/12/01/904984b2-7971-11e4-9a27-6fdbc612bff8_story.html

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New Updates @ 2 Nov
Oil price may fall to $50 by next year, which made companies dependent on Oil profitable.

If Oil price falls to $50, impact of shipping revival (uprise to profitability) next year will be great.

mobile.bloomberg.com/news/2014-12-01/billionaire-shale-pioneer-says-drilling-will-slow.html

MetalTrader3 ( Date: 01-Dec-2014 22:48) Posted:

My Night Analysis:

● Bunker & Network Related (76% Cost Saving in YTD14). As Bunker consist of major cost saving, -30% Oil price drop will add on to 76% of Cost Saving.

My remark: Bunker dropped 30% from $100 to below $69.65, based on current oil price @ 1 Dec translate to:

○ estimated 8 to 10% more Bunker saving for NOL (to contribute to 4Q 2014- 1 mth)
○ estimated 25 to 28% more Bunker saving for NOL (to contribute to 1Q 2015 )

Link (Bunker & Network Related (76% Cost Saving in YTD14)
http://infopub.sgx.com/FileOpen/NOL%20Q3%202014%20Results%20Presentation.ashx?App=Announcement&FileID=321359

● Oil Price (5 Years Low)- Dropped below $70, Bank Estimate will fall lower to $60
http://www.bbc.com/news/business-30276353

My remark: Oil price will unable to recover within few months. Consistent falling of oil price. Hitting $55 to $60 range remains possible due to USA alternative shale oil cheaper source.

Conclusion: Bunker price eat into shipping profitability from rising estimated $60 to $100 in past 5 years. Currently, Bunker price dropping below $70 great possibility to drop within $55 to $60 range. Shipping Turnaround is likely in 2015 onwards.

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Edited typo error:
10 Nov- I predicted combined Value of NOL will rise above my NOL prediction ($1.065) within 3 years - amended to 2 years @ 1 Dec.
* Reduced from 3 years to max 2 years (@ 1 Dec)- (10 Nov 2014- 10 Nov 2016).
● Reputation Bet to FundamentalHero & Kyoto2008 's queries- I will retreat from sharejunction forever if prediction do not come true.

26 Nov b4 opening- I indicate the song power had begun.
26 Nov- NOL moved up strongly & closed @ $0.81. I indicate that bits & bits of song lyrics will be revealed.
1 Dec- closed @ 0.84. I foresee rise till $0.87/more within 9 days (12 Dec).

Song:
https://www.youtube.com/watch?v=pMkRmH8dpgw&list=FLIGZIWveB2xf_-PhUBfo0Mg&index=

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10 Nov- I predicted combined Value of NOL will rise above my NOL prediction ($1.065) within 2 years. (10 Nov 2014- 10 Nov 2016).
* Reduced from 3 years to max 2 years (@ 1 Nov)
● Reputation Bet to FundamentalHero & Kyoto2008 's queries- I will retreat from sharejunction forever if prediction do not come true.

26 Nov b4 opening- I indicate the song power had begun.
26 Nov- NOL moved up strongly & closed @ $0.81. I indicate that bits & bits of song lyrics will be revealed.
1 Dec- closed @ 0.84. I foresee rise till $0.87/more within 9 days (12 Dec).

Song:
https://www.youtube.com/watch?v=pMkRmH8dpgw&list=FLIGZIWveB2xf_-PhUBfo0Mg&index=

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My Night Analysis:

● Bunker & Network Related (76% Cost Saving in YTD14). As Bunker consist of major cost saving, -30% Oil price drop will add on to 76% of Cost Saving.

My remark: Bunker dropped 30% from $100 to below $69.65, based on current oil price @ 1 Dec translate to:

○ estimated 8 to 10% more Bunker saving for NOL (to contribute to 4Q 2014- 1 mth)
○ estimated 25 to 28% more Bunker saving for NOL (to contribute to 1Q 2015 )

Link (Bunker & Network Related (76% Cost Saving in YTD14)
http://infopub.sgx.com/FileOpen/NOL%20Q3%202014%20Results%20Presentation.ashx?App=Announcement&FileID=321359

● Oil Price (5 Years Low)- Dropped below $70, Bank Estimate will fall lower to $60
http://www.bbc.com/news/business-30276353

My remark: Oil price will unable to recover within few months. Consistent falling of oil price. Hitting $55 to $60 range remains possible due to USA alternative shale oil cheaper source.

Conclusion: Bunker price eat into shipping profitability from rising estimated $60 to $100 in past 5 years. Currently, Bunker price dropping below $70 great possibility to drop within $55 to $60 range. Shipping Turnaround is likely in 2015 onwards.

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$1 is achievable within 3 years as stated in my prediction. It may occurs sooner due to multiple factors involved.

isaacsgx ( Date: 01-Dec-2014 18:05) Posted:

Looks like this counter got further upside. I am waiting for $1! Do u think this TP achievable?

MetalTrader3 ( Date: 01-Dec-2014 17:26) Posted:

Luckily none here is my disciple, else I will kick him out in 1 day.

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Luckily none here is my disciple, else I will kick him out in 1 day.

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Traders are different from normal people.
People are fearful on their holding.

Those that are fearful can sell to other interested in buying.

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At current trend, APL analysts may be calculating the significant oil price drop vs translated current savings. The falling oil price is a great opportunity that NOL is tapping as it relies oil for its bunker.

More details will be updated tonight.