Noble Group 01 (May 08 - May 10)

[winston]

Not vested. From OCBC:-

Noble Group Ltd: Value emerging

Still fundamentally strong. Shares of Noble Group Ltd (Noble) fell by 7.2% over the past week, underperforming the STI’s 5.9% decline. While weak sentiment surrounding the stock could be attributed to declining oil and commodity prices as well as fears of softening demand for commodities, Noble’s fundamentals remain unchanged. Its business model is volumedriven,
not price-driven. It is almost completely shielded from commodity price fluctuations with 96% of its inventories hedged. Meanwhile, the group has successfully expanded its volume with 1H08 tonnage growing 32% YoY, and management is confident that volumes will continue growing on sustainable demand for commodities, especially from developing countries.

Trading at steep discount to peer. Having fallen 30% since the start of the year, Noble is now trading at 7xFY08 PER. This comes in at the lower range of its 6-year historical trading band, which swung from a low of 5.6x during the post-SARS period in 2004 to a high of 21x last year. Its SGXlisted peer, Olam Int’l Ltd, is trading at 16.9x consensus PER despite posting
a smaller 53.8% growth in FY08 (June YE) earnings to S$167.7m. In comparison, Noble is commanding just 6.4x FY09 PER (Dec YE) despite posting a 194% YoY surge in 1H08 profits to US$291.1m. Given Noble’s larger earnings base and exposure to a wider variety of asset classes, the steep 62% discount is not warranted.

Enhancing its supply chain. Noble has recently invested in a grain and sugar export terminal in Brazil. While this investment is not expected to be earnings accretive, we believe that it will give the group greater control over its supply chain logistics and enhance operational efficiency, ultimately allowing it to extract more value from its supply chain operations. To recap, Noble doubled its gross profit per ton (GP/ton) in 1H08 by increasing its ownership of low cost assets. Further investments such as these will help to boost its GP/ton further.

On track to surpass estimates. Noble’s 1H08 earnings have already met 64% of our FY08 earnings estimates, putting the group on track to surpass our forecast. Lower commodity prices will ease working capital requirements on the group in 2H08. We ease our valuation parameter to the stock’s 6-year average PER of 12x (from 14x), and based on its blended FY08/09 earnings, derive a fair value estimate of S$2.53 (previously $2.99). This still represents an attractive 80% upside. As such, we maintain our BUY rating on Noble. (Lee Wen Ching)

[winston]

Not vested. From Kim Eng:-

Noble Group Ltd – The commodities supplier, which has more than doubled second-quarter profit, believes earnings may rise to a record this year as grains, coal and metal shipments grow, CEO Richard Elman said. He said demand for commodities will remain strong even as financial markets tumble, adding that it depends on how well the supply is managed.

Soyabeans tumbled to the lowest in 10 months, and corn fell to a seven-month low yesterday on concern that a spreading financial crisis may slash demand for raw materials. US lawmakers rejected a US$700bn bank rescue plan, raising concern more economies will slide into a recession.

'The world is not coming to an end,' said Mr Elman. 'Everybody needs to eat every day, they need electricity every day and they need to build homes.' The company, scheduled to report Q3 results on Nov 10, posted a 92% gain in net income to US$258.1m in 2007

[winston]

NOBLE JPMorgan initiated coverage on Noble with an "overweight" rating, saying the firm could sustain its strong return on investment capital and its transition to an asset-medium model will boost margins and help offset any slowdown in volume growth.

JPMorgan has set a price target of S$2.0 per share.

[iam802]

Media Release - Noble invests in liquid bulk fuels terminal in Brazil

http://info.sgx.com/webcorannc.nsf/ef3b ... enDocument

[iam802]

Noble up 8% on a market down day bcos of this announcement

http://info.sgx.com/webcoranncatth.nsf/ ... penelement


Key Points:
- result announced after the market closes on 10th November, 2008.
- net after tax profits of the Group from ordinary operations for this period will exceed those of any previous quarter in the Group’s history.
- Group’s cash balances have risen significantly during the quarter due in part to lower commodity prices which have required significantly less working capital.
- Cash on the balance sheet at the September quarter end was in excess of US$1.1 billion.
- Group’s available credit lines, which are in excess of US$6 billion, remain in place as they have done throughout 2008.
- Group continues to operate profitably and intend to maintain the dividend at a level at least commensurate with last year.

[winston]

Not vested.

Noble Advances in Singapore, Forecasts Record Profit (Update2) By Luzi Ann Javier and Jean Chua

Oct. 28 (Bloomberg) -- Noble Group Ltd. , the second-worst performer in Singapore's benchmark index over the past month, surged after the commodity supplier forecast record profit for the three months to September and said cash balances were increasing.

Noble, which more than doubled second-quarter profit, advanced 27 percent, to 59.5 Singapore cents, the biggest gain since April 1999. The Straits Times Index added 4.1 percent.

The credit crunch has stoked concern banks may choke off lending to commodity buyers, gumming up trade flows. Noble's stock lost 59 percent of its value over the past month as commodity prices fell on concern a global recession will undermine demand.

``Fears over the outlook for commodity demand have been overplayed and Noble's steep year-to-date decline is unwarranted,'' Lee Wen Ching, an analyst at OCBC Investment Research Pte, wrote in a note. The company's update quelled ``fears over its outlook in light of declining commodity prices.''

The Hong Kong-based company has more than $6 billion in credit lines that ``remain in place,'' the company said in the update on business conditions. Cash rose ``significantly'' to more than $1.1 billion at the end of the third quarter in part as lower commodity prices cut the need for working capital, it said.

`Record Earnings'

``Noble is on track to achieve a year of record earnings and could well surpass our $455.4 million net profit target,'' OCBC's Lee wrote. OCBC maintained its ``buy'' rating on the stock and a fair-value estimate of S$2.53.

Noble Chief Executive Officer Richard Elman said in an interview in September that earnings may rise to a record this year as grains, coal and metal shipments grow. The company, scheduled to announced third-quarter results on Nov. 10, reported profit of $290 million in the first six months of the year.

( Winston's Comment: So if they're shipping alot of grains, coal and metals, why is the BDI down as well as the price of commodities... something is not correct )

The board ``plans to maintain the dividend at a level at least commensurate with last year,'' the statement said. Noble paid a full-year dividend of 2.48 U.S. cents last year, according to Bloomberg data.

The Reuters/Jefferies CRB Index, which tracks 19 commodities, has fallen 28 percent this year. Noble has lost 71 percent of its market value in 2008 compared with the 62 percent drop in the MSCI AC Asia Pacific Materials Index.

[iam802]

seems like someone is buying for the last few days...

even when today's market start to turn, it is still pushing forward

[millionairemind]

Buy on rumours, sell on news???

November 10, 2008, 5.27 pm (Singapore time)

Noble's Q3 net profit up 145%, 9 months sales hit historic high
By ANGELA TAN

Noble Group on Monday reported net profit for the third quarter 2008 more than doubled to US$148.8 million compared to US$60.6 million in the third quarter 2007.

For the third quarter 2008 group revenue rose 66 per cent to US$9.4 billion, the third highest quarterly revenue in the group's history, and representing a substantial increase compared to the US$5.6 billion level in the third quarter 2007.

The commodities related group also witnessed the highest nine months revenue level in the group's history as all segments registered strong growth.

'The quarter's results also validate Noble's focus on its risk management systems,' Noble said in the release.

Cash levels are a record high and about 70 per cent of its debt funding possesses maturities beyond 18 months through 7 years.

Cash levels increased to US$1,101 million compared to US$803 million as of June 30, 2008 and US$671 million as of December 31, 2007. This is the highest cash level in the group's history.

Noble also reported return on shareholders' equity (average) was 33.9 per cent (28.8 per cent excluding one-off gains) for year-to-date 2008, up from 20.6 per cent for FY 2007 and well surpassing our corporate target of a 20 per cent return on equity.

[iam802]

From ML.

Downgrade to Underperform, PO of $0.70

We are downgrading Noble Group to Underperform with PO of $0.70 (from $3.15) or 0.7x book based on Gordon Growth model.

We acknowledge the stock is down 50% since Sept but we believe there is more downside risk given our prognosis that slowdown in commodity trade will stretch into 2009. We have cut our est. by 31% and expect a sharp earnings decline of 29% in 2009.

The stock traded at 0.6x-0.7x in 99/00 post-Asian Financial Crisis and 0.8x during SARS and 911. We think the stock could trade at those levels again.

We believe Noble will survive this downturn…

Concerns about its balance sheet risk and solvency are misplaced, in our view. Noble is entering into this cyclical downturn from a position of strength and a very liquid balance sheet. Moreover, the competent management team had previously guided the company through 1997/8 crisis and emerged stronger. Long-term investors (>2 years) are therefore likely to find a PBV <1.0x attractive, but we see no need to rush in.

…but expect earnings to see a sharp decline.

We are believer in Noble’s structural transformation but we see a cyclical sharp contraction of earnings in 2009.

As a global recession looms, commodities prices and lower trade volume are likely to shrink. Among Noble’s businesses, MMO (iron ore & aluminum) and Logistic (dry bulk) are the more cyclical ones that could be expected to see the biggest fall in earnings. We estimate Noble’s earnings (excl. gain from asset sale) could see a sharp decline of 29% in 2009. Stock unlikely to perform through 1H09

In our view, the stock could be stuck at the down-cycle P/B range through 1H09 at least. We estimate that the company will see earnings growth slow by 4Q and then decline by 1Q09.

Earnings recovery would be much later than that, in our view. Therefore, we expect a depressed share price for the next 6 months

[winston]

Singapore Hot Stocks-Noble rises on UBS buy rating

SINGAPORE, Dec 3 (Reuters) - Singapore-listed commodity firm Noble Group rose as much as 6.9 percent on Wednesday after UBS initiated coverage of the stock with a "buy" rating.

UBS said in a report on Tuesday that Noble's shares were attractively priced, giving it a price target of S$1.35, after it said the stock had fallen 63 percent since a June 2008 peak, versus a 47 percent fall for the benchmark Singapore index.

"We believe the company is in a strong position to capture market share," said UBS analyst Andreas Bokkenheuser.

The Reuters-Jefferies CRB index <.CRB>, a global commodities benchmark, neared 5-? year lows on Tuesday on fears of a long recession hitting demand, but UBS said Noble's global reach and economies of scale would be an advantage versus its competitors.

"Investors see Noble as a stock which may potentially bounce back," said a local trader. "Investor sentiment towards a potential bargain like Noble is high".