Noble Group Ltd:

Noble Group Ltd (Noble) looks on track for strong growth, having posted a64% YoY growth in revenue to US$10.1b and a 66% increase in net profitto US$99.5m in 1H07. Noble is one of the dominant players in the lucrativecarbon market (estimated to be worth €4.6b to €200b by 2010), accountingfor 25% of the total pool of Certified Emissions Reductions (CERs) issued.In terms of its traditional businesses, the operating environment remainshealthy. The global ethanol industry grew 22% in 2006 and is expected tocontinue to grow strongly, driven by the implementation of the RenewableFuels Standard blending mandate, tax subsidies and high oil prices. Pricesof agricultural products have been rising since May 2006, indicating thestrong demand for these goods. The reduction in the U.S. federal fundsrate will help to sustain economic activity, leading to continued demand forenergy-related products (coal, ethanol, corn and sugar) and constructionmaterials (iron ore). We expect Noble to benefit from the rising commoditydemand. We forecast FY07 revenue of US$19.7b and net profit ofUS$192.5m and derive a fair value estimate of S$2.20 based on 17x blendedFY07/08 PER. As Noble has run up recently, we resume coverage onNoble with a HOLD rating.