Noble Group rated OUTPERFORM

Macquarie Research in a Jan 23 research report says: “Expectations of softer prices led the company to lower inventory levels: in 3Q08, inventory was US$2.1 billion, –14% q-o-q, with 94% of this classified as readily marketable or hedged inventory. The quarterly net profit was also achieved with Noble's VAR (value at risk) in the daily range of 2.64–1.74% of shareholders’ funds.

“Cash levels rose by 37% q-o-q to US$1.1 billion in 3Q08, helped by a US$1.5 billion reduction in current assets, ex cash (led by prepayments, which fell by 30% q-o-q). The nominal net gearing ratio in 3Q08 fell to 108% from 132% 2Q08. We expect a 20% contraction in overall volumes for FY2009, with net profit of US$293 million, –43% y-o-y. Twelve-month price target of $1.35 based on a PER methodology. Noble currently trades at a FY2009E PER of 7x and a P/BV of 1.1x. OUTPERFORM.”

Source :The Edge Singapore