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Lucky03 Elite	23-Feb-2014 04:47        Lucky03 About Contact  Quote this Post!
x 0   x 0  Alert Admin	Hutchison Port Holding US$0.63 now so bad ? The bullish remarks at the Air show is good, right ? So conflicting ... If there has been any order for new ships over the last 2 years, they are likely to replace older ships to improve fuel efficiency and better economy of scale with larger capacity. The irony is larger capacity will worsen supply ? The question remains with the retirement of older ships if of the same equivalent capacity and if they are scrapped and taken off the market or they are added back after selling to another shipper. Well, I'll never be able to tell so have to look at the macro picture for guidance. enjoylife77      ( Date: 23-Feb-2014 03:25) Posted: I read this article too. Its main point is reduction in the number of shipbuilder over time. But even if China is left with only 1 shipbuilder, nothing will change if shipper keep placing order blindly and shipbuilder keeps on building new capacity in the already saturated market. For a hint of the economy, look at the performance of Hutchison Port Holding, IPOed at US1.01. Current price? On a similar note, the recently concluded Singapore Air Show cited many bullish forecast by the official of Boeing and Airbus. Lets wait and see.
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enjoylife77 Veteran	23-Feb-2014 03:25        enjoylife77 About Contact  Quote this Post!
x 0   x 0  Alert Admin	I read this article too. Its main point is reduction in the number of shipbuilder over time. But even if China is left with only 1 shipbuilder, nothing will change if shipper keep placing order blindly and shipbuilder keeps on building new capacity in the already saturated market. For a hint of the economy, look at the performance of Hutchison Port Holding, IPOed at US1.01. Current price? On a similar note, the recently concluded Singapore Air Show cited many bullish forecast by the official of Boeing and Airbus. Lets wait and see.
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Lucky03 Elite	23-Feb-2014 03:24        Lucky03 About Contact  Quote this Post!
x 0   x 0  Alert Admin	Everyone in the shipping line know that if they don't get their act together to fix the freight rate, they will continue to bleed together. See article below from Global Seatrade. Yang Ming sees better prospects this year By Vincent Wee from Hong Kong Taiwan's Yang Ming Marine Transport Corp sees business improving steadily this year as recovering demand should lead to quarterly growth during the course of the year, local media reports said. Commenting on the relatively higher freight rates since the beginning of this year due to strong seasonal demand before the Lunar New Year holidays chairman Frank Lu said: ?The business in the first quarter this year will be slightly better than the same period last year." Lu added however that it is still challenging for the company to return to the black this year, as demand on both US and Asian routes slowed after the holiday. He pointed to the sustainability of current freight rates and the success of the Transpacific Stabilisation Agreement's $300 per feu general rate increase as the two main factors that will determine its near-term prospects. Lu also said that Yang Ming will leverage on the performance of its Kao Ming Container Terminal Corp container terminal operator unit in Kaohsiung to help raise its profitability this year. Kao Ming, in which Yang Ming holds a 47.5% stake, is to expected to complete its second-phase in June and begin operations in September. Published in Americas, Asia, Containers, Port & Logistics © Copyright 2014 Seatrade Communications Limited. Replication or redistribution in whole or in part is expressly prohibited without the prior written consent of Seatrade Communications Limited. Friday, 21 February 2014 06:45
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Lucky03 Elite	23-Feb-2014 02:34        Lucky03 About Contact  Quote this Post!
x 0   x 0  Alert Admin	Article published on Seatrade Global on Saturday, 22nd February 2014. Lucky03      ( Date: 23-Feb-2014 02:32) Posted: http://www.seatrade-global.com/news/asia/quarter-of-china-shipbuilding-capacity-to-close-in-2-years-dvb.html Quarter of China shipbuilding capacity to close in 2 years: DVB By Marcus Hand from Singapore Some 25% of Chinese shipbuilding capacity is expected to close in the next 24 months as the industry continues to grapple with oversupply according to DVB Shipping Research. With the Chinese government moving to support state-owned yards it will be the small privately owned shipbuilders that will bear the brunt of the reduction in capacity. While state owned yards are already 50% full for 2015, many smaller yards have 20% cover or less for 2015. ?Privately owned Chinese shipyards (especially small privately owned yards) are expected to experience a tough ride. Without government support forward cover with less than 20% of 2015 slots being sold. This means that the closure of these small yards without out any new orders is now inevitable,? the report warned. In total DVB Shipping Research expects to see a 25% reduction in Chinese shipbuilding capacity over the next 24 months, with a further 10% of capacity expected to face ?tremendous pressure? with survival dependent market conditions and government policies. ?Small privately owned Chinese shipyards are expected to suffer the most with almost 75% of the capacity is likely to disappear,? it said. In particular small private Chinese that are relying heavily on bulk carriers for over 50% of their orderbook are at risk. ?Although these yards are large in number, the impact from their closure in the Chinese shipbuilding industry is expected to be limited.? The small private yards that are expected to do best are those that are moving into niche shipbuilding markets such as building gas carriers and offshore supply vessels. The result will be that by 2018 30 state-owned yards will have increased their share of total capacity to 52% from 39% today according to figures from DVB Shipping Research and Clarksons. The number of small privately owned yards will meanwhile reduce dramatically from 150 today to just 19 in 2018, with their share of capacity falling to 8% from 22%. Some casualties are also expected among large privately owned yards with the number falling to 17 by 2018 from 20 at the moment, although share of capacity will increase slightly to 34% from 32%. The number of joint venture yards will remain at 10.
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Lucky03 Elite	23-Feb-2014 02:32        Lucky03 About Contact  Quote this Post!
x 0   x 0  Alert Admin	http://www.seatrade-global.com/news/asia/quarter-of-china-shipbuilding-capacity-to-close-in-2-years-dvb.html Quarter of China shipbuilding capacity to close in 2 years: DVB By Marcus Hand from Singapore Some 25% of Chinese shipbuilding capacity is expected to close in the next 24 months as the industry continues to grapple with oversupply according to DVB Shipping Research. With the Chinese government moving to support state-owned yards it will be the small privately owned shipbuilders that will bear the brunt of the reduction in capacity. While state owned yards are already 50% full for 2015, many smaller yards have 20% cover or less for 2015. ?Privately owned Chinese shipyards (especially small privately owned yards) are expected to experience a tough ride. Without government support forward cover with less than 20% of 2015 slots being sold. This means that the closure of these small yards without out any new orders is now inevitable,? the report warned. In total DVB Shipping Research expects to see a 25% reduction in Chinese shipbuilding capacity over the next 24 months, with a further 10% of capacity expected to face ?tremendous pressure? with survival dependent market conditions and government policies. ?Small privately owned Chinese shipyards are expected to suffer the most with almost 75% of the capacity is likely to disappear,? it said. In particular small private Chinese that are relying heavily on bulk carriers for over 50% of their orderbook are at risk. ?Although these yards are large in number, the impact from their closure in the Chinese shipbuilding industry is expected to be limited.? The small private yards that are expected to do best are those that are moving into niche shipbuilding markets such as building gas carriers and offshore supply vessels. The result will be that by 2018 30 state-owned yards will have increased their share of total capacity to 52% from 39% today according to figures from DVB Shipping Research and Clarksons. The number of small privately owned yards will meanwhile reduce dramatically from 150 today to just 19 in 2018, with their share of capacity falling to 8% from 22%. Some casualties are also expected among large privately owned yards with the number falling to 17 by 2018 from 20 at the moment, although share of capacity will increase slightly to 34% from 32%. The number of joint venture yards will remain at 10.
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Lucky03 Elite	23-Feb-2014 02:27        Lucky03 About Contact  Quote this Post!
x 0   x 0  Alert Admin	There was a report that I came cross sometimes back that China government is forcing consolidation of shipyards as a result of the 'dry spell'. enjoylife77      ( Date: 23-Feb-2014 01:21) Posted: Most sgx investor only know COSCO and YJZ shipyard. But do you know that there are over 1600+ shipyard, all sizes & specification, in China alone. What about SKorea, Brazil and others? There was a period when the European banks refused to lend to any shipbuilding/shipping related business. Guess what, the China bank happily step in offering loan on condition that only China's shipyard get the job. Many shipyard are busy building now even when the over supply situation is clearly visible years ago. Every month there will be new capacity into the market. That's China alone. Those older, inefficient vessel sold by NOL is not  scrapped, which means the capacity is still somewhere serving the seven sea. Rates recovering soon? From time to time , you will see a buy call from analyst because their client are badly caught with high NOL prices so they can reduce exposure. Everyone for themselves. The HQ already sold for US$200 m, what's next ?
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enjoylife77 Veteran	23-Feb-2014 01:21        enjoylife77 About Contact  Quote this Post!
x 0   x 0  Alert Admin	Most sgx investor only know COSCO and YJZ shipyard. But do you know that there are over 1600+ shipyard, all sizes & specification, in China alone. What about SKorea, Brazil and others? There was a period when the European banks refused to lend to any shipbuilding/shipping related business. Guess what, the China bank happily step in offering loan on condition that only China's shipyard get the job. Many shipyard are busy building now even when the over supply situation is clearly visible years ago. Every month there will be new capacity into the market. That's China alone. Those older, inefficient vessel sold by NOL is not  scrapped, which means the capacity is still somewhere serving the seven sea. Rates recovering soon? From time to time , you will see a buy call from analyst because their client are badly caught with high NOL prices so they can reduce exposure. Everyone for themselves. The HQ already sold for US$200 m, what's next ?
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sgng123 Supreme	22-Feb-2014 21:57        sgng123 About Contact  Quote this Post!
x 0   x 0  Alert Admin	NOL is like casino stock Big win Big lose. IT is just when u are when the winning/losing take place and the ability to ride out the downturn and enjoy the fruit when it ripe. Every big carriers in world are all in alliance with latest Taiwanese carrier  Evergreen  giving in and join CKYH alliance. This is what I called anti competition behaviours, let watch SCFI for more evidence before jumping the gun. Patience is gold. Big GRI of 500 in March, Apr and May. Now lot of carriers would be under pressure to improve profitability from their bankers, time to end rate war and start restoring freight rate to the sustainable level.
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Lucky03 Elite	22-Feb-2014 19:00        Lucky03 About Contact  Quote this Post!
x 0   x 0  Alert Admin	NOL performance is all about freight rate and cost. Freight rate itself is dependent of supply and demand. As we know, demand is expected to grow in tandem with global economic recovery and hence increase in global trade esp as US gains strength and Europe emerging from years of recession. The concern is with supply then as it is still projected to outstrip demand. Many analysts will try to project the gap with some echoing others as many will not have direct access to such data other than picking up from market source. Supply itself is dependent on new orders and older ships being retired or returned. I doubt any shipping companies will still place any order aggressively over the last 3 years. Given that it should not take longer than 3 years to deliver a ship, we may be looking at the tail end of new order deliveries. Citing COSCO and YZJ, they also do not announce as many new orders secured compared to few years back. If new order deliveries tapering down, next question is the rate of retiring older ships. That is again evident as many have announced plans to accelerate such retirement to improve efficiency and cost structure with more fuel efficient ships. We all know that in economic development, there is always tendency to over stretched in either direction and then market will readjust. 5 years ago, it was exuberant and shipping companies scramble to increase market share and ordered new ships. Today, they are all scrambling to scale back and focus on cost containment and profitability. There is now a risk again of overdoing and if the world economic recovery turns out stronger than anticipated and global trade surges, the sky is the limit ! Freight rate may see in excess of US$10k again. sgng123      ( Date: 22-Feb-2014 00:28) Posted: NOL freight rate is mostly fixed at every year May contract renewal, very heavily dependent on US economy forward guidance for the year. 2013 is bad year for US economy, US debt limit / government shutdown etc all hurt shippers prospect for the whole year so they asked for lower contract. In the end NOL get recession level rate for 2013 which did not turn out to be a recession, kind of lame get shot in the leg by negative shippers expectation. Once the rate is set, it is fixed for the whole damn year regardless of demand/supply. So 1Q14 don expect return to profit, most likely loss due to 2013 shitty contract rate but result would be better than 4Q( lowest). This year May contract renewal might see a rate restoration due to more positive prospect of the US economy by shippers ( 3Q13/4Q13 GDP growth of 4.1% and 3.2% improve prospect forward guidance). So do watch out for 2Q14, might return to profit due to rate restoration and completion of charters retirement. Container shipping = high risk business of getting the right rate for the right economy condition, very hard to predict future economy. Rate at 2Q determine whether the liners would make or break for the entire year regardless of demand/supply,  only exception is nol reduced operation cost to extreme level that even at 4Q13 recession rate still can make money then it is ok. Cost cutting is the theme now in business world, everything had to cut and let go. halleluyah      ( Date: 21-Feb-2014 14:48) Posted: tis q is the most dissappointed results as i expected it  to b better, 1q = profit US$76m 2q = loss US$35m 3q = profit US$20m 4q = loss US$137m
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Lucky03 Elite	22-Feb-2014 18:44        Lucky03 About Contact  Quote this Post!
x 0   x 0  Alert Admin	While I agree with you, it will not be difficult for anyone to strike fear by shorting NOL. The risk to whoever does that if it will be able to cover back profitably as any drop further will bring many old timers back who will find it irresrible to own a piece of NOL at such low price. Heero78      ( Date: 22-Feb-2014 14:27) Posted: To be frank, i dun see it to go down further...cost saving achieved of $1billion really not bad. Most likely stay around this range of $1. I will go in for $0.985(hopefully can get) next monday...really cheap bargain for long term. just my 2 cents spore1      ( Date: 22-Feb-2014 13:35) Posted: breaking down of 98 cents will be v bearish
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Lucky03 Elite	22-Feb-2014 18:40        Lucky03 About Contact  Quote this Post!
x 0   x 0  Alert Admin	http://www.channelnewsasia.com/mobile/video/interview-with-ng-yat/613886.html CNA interview with Ng Yat Choon in Mar 2013. He was not optimistic then but he did carried out those cost cutting and fleet renewal measures that he panned out and delivered the savings. He had stated that he was not focus on market share which means growth in revenue but profitability. It was obvious that if for every dollar of sales for some lines means loss then it was suicidal to increase them. Wonder if there will be a similar interview in 2014 and what he will say this time and if he will sound more positive :)
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sgng123 Supreme	22-Feb-2014 16:44        sgng123 About Contact  Quote this Post!
x 0   x 0  Alert Admin	When Government invested US $4B in fleet renewal program and foreign banks supported it with US $1.5B MTN tell another story. Not to mentioned they managed to slash like US $1B off operating cost in 2 years, not many logistic companies can achieve this kind of result. By the way US $470M slash through 14 new builds including the 10 delivered in 2012. There are another 14 more new ship coming to operation with 4 delivered in 3Q13 and rest in 2014. Another US $500M in pipeline for 2014 meaning 7-8% drop in operating cost, would returned ship to profit at existing freight rate and higher if rate got restored in this year contract renewal due to better global economy. Very hard to make decision whether to cut losses or continue to hold cos can swing both extreme side either big upward swing or continue in this price range. Worst is probably over for container shipping due to liners joining alliance and less competitive pricing from rivals liners. 2Q14 might finally see light at the end of a very long dark 3 years of shipping industry slump. enjoylife77      ( Date: 22-Feb-2014 06:41) Posted: When a stock drop from $5+ and got kick out of the STI component , it  is  sending you a strong message.
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Heero78 Veteran	22-Feb-2014 14:27        Heero78 About Contact  Quote this Post!
x 0   x 0  Alert Admin	To be frank, i dun see it to go down further...cost saving achieved of $1billion really not bad. Most likely stay around this range of $1. I will go in for $0.985(hopefully can get) next monday...really cheap bargain for long term. just my 2 cents spore1      ( Date: 22-Feb-2014 13:35) Posted: breaking down of 98 cents will be v bearish spore1      ( Date: 21-Feb-2014 12:10) Posted: may go further down to test 98 cent
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spore1 Supreme	22-Feb-2014 13:35        spore1 About Contact  Quote this Post!
x 0   x 0  Alert Admin	breaking down of 98 cents will be v bearish spore1      ( Date: 21-Feb-2014 12:10) Posted: may go further down to test 98 cents New123      ( Date: 08-Jan-2014 10:55) Posted: Started to move up. Looking gd to clear $1.11and go higher. http://sporeonlines.blogspot.sg/2014/01/nol.html
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enjoylife77 Veteran	22-Feb-2014 06:41        enjoylife77 About Contact  Quote this Post!
x 0   x 0  Alert Admin	When a stock drop from $5+ and got kick out of the STI component , it  is  sending you a strong message.
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sgng123 Supreme	22-Feb-2014 00:28        sgng123 About Contact  Quote this Post!
x 0   x 0  Alert Admin	NOL freight rate is mostly fixed at every year May contract renewal, very heavily dependent on US economy forward guidance for the year. 2013 is bad year for US economy, US debt limit / government shutdown etc all hurt shippers prospect for the whole year so they asked for lower contract. In the end NOL get recession level rate for 2013 which did not turn out to be a recession, kind of lame get shot in the leg by negative shippers expectation. Once the rate is set, it is fixed for the whole damn year regardless of demand/supply. So 1Q14 don expect return to profit, most likely loss due to 2013 shitty contract rate but result would be better than 4Q( lowest). This year May contract renewal might see a rate restoration due to more positive prospect of the US economy by shippers ( 3Q13/4Q13 GDP growth of 4.1% and 3.2% improve prospect forward guidance). So do watch out for 2Q14, might return to profit due to rate restoration and completion of charters retirement. Container shipping = high risk business of getting the right rate for the right economy condition, very hard to predict future economy. Rate at 2Q determine whether the liners would make or break for the entire year regardless of demand/supply,  only exception is nol reduced operation cost to extreme level that even at 4Q13 recession rate still can make money then it is ok. Cost cutting is the theme now in business world, everything had to cut and let go. halleluyah      ( Date: 21-Feb-2014 14:48) Posted: tis q is the most dissappointed results as i expected it  to b better, 1q = profit US$76m 2q = loss US$35m 3q = profit US$20m 4q = loss US$137m
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sgng123 Supreme	21-Feb-2014 15:56        sgng123 About Contact  Quote this Post!
x 1   x 0  Alert Admin	Ship doing same thing as what Singapore is doing now, restructuring and improving productivity. The world is changing and the freight rate u seeing now might be the new norm rate for the next few years. IF don cut down cost a lot then cannot survive in the shipping industry and had to exit market. Surviving shipping lines would benefit and gain more market share but freight rate would not go back to it hey day of the past 10 years. Cut Cut Cut is the way forward, more heads need to be rolled and more retrenchment needed lol. Ship operating cost had to go down another US $200 per FEU to achieve sustainable profitability ( 5% profit margin for logistic company), hope they can  achieve it in 2Q14 where the last 20 charters retired.
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halleluyah Supreme	21-Feb-2014 14:48        halleluyah About Contact  Quote this Post!
x 0   x 0  Alert Admin	tis q is the most dissappointed results as i expected it  to b better, 1q = profit US$76m 2q = loss US$35m 3q = profit US$20m 4q = loss US$137m
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enjoylife77 Veteran	21-Feb-2014 14:19        enjoylife77 About Contact  Quote this Post!
x 0   x 0  Alert Admin	Many house use the recovery theme to fool retail investor. Don't be one of them. With  current  horrendous over supplied situation and even more new vessel construction underway, do you see any recovery anytime soon? The situation will only improved if the world shipping authority imposed a COE system to control over supply.
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cccx123 Elite	21-Feb-2014 13:42        cccx123 About Contact  Quote this Post!
x 0   x 0  Alert Admin	Hold Asia Singapore Transportation Marine Reuters NEPS.SI ADR Ticker NPTOY Bloomberg Exchange Ticker NOL SP SES NEPS ISIN US6407732063 4Q results much worse than expected Neptune Orient Lines Alert 20 February 2014 Company Update Price at 20 Feb 2014 (SGD) Price target - 12mth (SGD) 52-week range (SGD) Straits Times Index Joe Liew, CFA Research Analyst (+65) 6423 8507 [email protected] Stock data Market cap (SGDm) Market cap (USDm) Shares outstanding (m) Major shareholders Free float (%) Avg daily value traded (USDm) Source: Deutsche Bank 1.00 1.00 1.22 - 0.98 3,089 2,590 2,055 2,577.1 Temasek (66%) 34 1.9 Key data FYE 12/31 Sales (USDm) 2012A 9,512 -419.4 -0.12 Figure 1: Average quarterly Revenue/TEU for the last three years 1,350 1,300 1,250 1,200 1,150 1,100 1,050 1,000 2013E 2014E 9,595 10,263 73.6 -9.5 Net Profit (USDm) DB EPS (USD) PER(x) ??? Yield (net) (%) 0.0 0.7 0.0 Source: Deutsche Bank -0.05 -0.00 NOL registered a net loss of US$76m for 2013 Excluding the US$200m profit from sale of its headquarter building in Singapore, core 2013 net loss would have been US$276m. In comparison, we had forecasted a core net loss of US$123m and latest Bloomberg core net loss forecast is US$174m. The results were materially below market expectations. 4Q 2013 net loss of US$137m was worse than last year's US$91m loss. The company blames the poor results on weak freight rates Management commented that freight rates declined throughout the year with 4Q 2013 recording one of the lowest levels the industry has seen in the last three years. NOL's average revenue / TEU in 4Q was down 8.3% y/y and for 2013 it was down 7.6% y/y. NOL?s 2013 volume was down 2.5% y/y. The weak rates offset the US$470m worth of cost savings the company claims it achieved in 2013. The cost savings did help reduce the losses y/y. (net loss of US$412m in 2012). Net gearing at the end of 2013 was 1.82x, an increase from the 1.40x a year before as the company spent US$1.3bn on capex. No dividends were declared. Outlook challenging Management expect an over-supply of capacity in the industry. Liner freight rates are expected to remain under pressure. They forecast industry capacity growth of 5.5% to be ahead of volume growth of 4.5% this year. But they did say that the new year has started slightly more encouragingly with some pickup in volume and rates. We also like the company's decision to not renew their expensive charter-in vessels (about 20 expiring in 2014) and thus end 2014 with a 6% reduction in capacity. No reason to Buy the stock At 1x 2013 P/B, we see no reason to Buy the stock. We agree that oncoming supply is a concern for the industry, despite our inhouse view of higher global economic growth this year. With continued capex commitments related to the 10 vessels to be delivered this year, we also worry about NOL's financial position. In our view, an equity issuance cannot be ruled out if the operating environment does not improve given net gearing is at the highest level since 2003. In regional shipping, we prefer the dry bulk sector over the container shipping sector.
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