Recent surge in share price. The share price has risen by about 20% since our last report on 2 September 2009. We would like to highlight that NOL is still expected to post a full year loss of US$633m in FY2009F. Although we are anticipating a recovery in 2010, it is projected to report a loss of US$131m in FY2010F. It is only in FY2011F that we expect a profit of US$208m.
Dowgrade from Buy to Hold with fair value at S$2.12. We have a fair value of S$2.12 for the stock. This works out to 1.2 times book value for FY2009F. We derive our fair value based on expectations that NOL will start recovering from the downturn in FY2010F. Due to limited upside of 11.6% to our target price, we downgrade the stock from buy to hold.
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