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OSK DMG also recommend to Buy, with TP $0.35
Today reached a high of 0.29, hope it can hit the 0.30 soon. Holding significant lots of it.
DBS super promoting this stock.. time to sell into strength..so many analysts upgrading TP
Nam Cheong announced another round of vessel sales worth
US$70.5m for 2 PSVs and 1 accommodation work barge
(AWB) to be delivered between 1Q14-4Q14. The AWB was
sold to a subsidiary of Malaysian contractor Perdana
Petroleum, a repeat customer who had earlier bought 2
similar vessels in April 2013. 1 of the PSVs were sold to an
existing Asian customer, who had earlier bought 4 PSVs in
May 2013, and the other PSV was bought by new customer
EDT Offshore, a specialist OSV operator based in Cyprus. Nam
Cheong is well on track to achieve its sales target of 19
vessels in FY13 and 25 in FY14. Orderbook now stands at
about RM1.5bn. This underpins robust net profit CAGR of
20% for the Group in FY13/14. Maintain BUY with TP of
S$0.36. Expect further near term catalysts from a strong
showing in 2Q13.
Nam Cheong: sold three vessels (2 PSVs, 1 accommodation work barge) worth a combined US$70.5m to three customers. The three vessels are being constructed as part of the group’s build-to-stock series in two of its subcontracted yards in China. They are scheduled for delivery btwn 1Q-4Q14, and expected to contribute positively to the group’s FY13-14 financials. Year to date, Nam Cheong has sold 16 vessels vs 7 vessels over the same period last yr. Given the robust industry momentum, mgt believes it is on track to surpass its record high of 21 vessel sales achieved last yr. As at end Jun 2013, Nam Cheong’s order book stood at an estimated RM 1.3b for recognition up to 2015. The stock trades at 9.7x P/E.
analysts reports are out..time to sell into strength..
Nam Cheong Limited (NCL SP) BUY
Price/Tgt: S$0.275/S$0.34 Mkt Cap: US$458.1m 3-mth daily volume: US$1.9m 1-Yr Hi/Lo: S$0.295/0.176
Scores with US$70m Sale of 3 Vessels
Analysts: Tan Jun Da / Nancy Wei Tel: (65) 6590 6616/6628
What’s New?
· Sold 2 PSVs and 1 accommodation work barge. Nam Cheong has sold 2 platform supply vessels (PSVs) and 1 accommodation barge worth a total of US$70.5m. One of the PSVs was sold to an existing customer who bought four PSVs from Nam Cheong in May 13, while the other PSV was sold to a subsidiary of EDT Offshore, a new customer in Cyprus. The accommodation work barge was sold to a subsidiary of Perdana Petroleum.
· Strong orderbook underpins earnings visibility. With these contract wins, Nam Cheong’s orderbook stands at RM1.5b, providing strong earnings visibility for the next three years.
· Surpassed record vessel sales in 2012. Ytd, Nam Cheong has sold 16 build-to-stock vessels worth US$311.6m, exceeding the US$293.2m worth of vessel sales in 2012 (excluding 4 build-to-order multi-purpose PSVs worth US$130m, to be recognized from 2013-15).
Our Take
· Brisk PSV sales mitigate oversupply concerns. Ytd, Nam Cheong has already sold 11 of its 18 PSVs under its 2013 and 2014 shipbuilding programme, easing concerns that its build-to-stock PSVs may be hit by a potential oversupply. Recently, there have been concerns that vessel class may have been over-built. Management is cognizant of potential PSV oversupply concerns but pointed out that the supply glut will mainly affect the large 5,000dwt and multi-purpose PSVs, which Nam Cheong has limited exposure to.
· Beneficiary of Petronas’ aggressive capex scheme. We continue to like Nam Cheong for its leadership in a high barrier-to-entry Malaysian market (50-75% market share), which will experience a structural ramp-up in E& P spending on the back of Petronas’ aggressive capex plan. Under this scheme, the national oil company will invest RM50b-55b annually over the next five years, 35-50% higher than the 5-year average for 2007-11.
Valuation/ Recommendation
· Maintain BUY. Our target price of S$0.34 is based on 9.7x FY14F PE (2014F EPS: 8.8 sen or 3.5 S cents). Our target PE is 1.3SD above peers’ long-term PE mean of 7.0x, which we think is justified given Nam Cheong’s dominant 50-75% market share in a high barrier-to-entry market.
ozone2002 ( Date: 24-Jul-2013 09:12) Posted:
high vol today on the gd news.. good chance to sell on news..gd luck dyodd
Last:0.285 Vol:9257k  +0.01 |
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high vol today on the gd news.. good chance to sell on news..gd luck dyodd
Last:
0.285 Vol:
9257k +0.01
diam diam cheong! :)
one risk that nam cheong has is they pre build before orders come in..
so they may get stuck with lot of inventories if orders do no come flowing in..
but for now seems like orders are streaming in..
gd luck dyodd
jiejie ( Date: 23-Jul-2013 19:16) Posted:
NEWS RELEASE NAM CHEONG SECURES ANOTHER CONTRACT WIN FOR THREE VESSELS WORTH US$70.5 MILLION IN JUST TWO MONTHS - On track to surpass record high of 21 vessel sales achieved in 2012 - One Platform Supply Vessel sold to a subsidiary of an existing customer, a leading oilfield services company based in Asia
Second PSV sold to a new customer in Cyprus,EDT Offshore, a well establishedoffshore marine services company
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Guess the company will reach sale number of about 28 vessels this year.
Will the stock go up tmr?
NEWS RELEASE
NAM CHEONG SECURES ANOTHER CONTRACT WIN FOR THREE VESSELS WORTH US$70.5
MILLION IN JUST TWO MONTHS
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On track to surpass record high of 21 vessel sales achieved
in 2012
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One Platform Supply Vessel sold to a subsidiary of an existing customer, a leading oilfield services company based in Asia
Second PSV sold to a new customer in Cyprus,EDT Offshore, a well establishedoffshore marine services company
DBS advocating this stock which in my opinion is an undervalued gem based on the fundamentals
DBS TP is $0.36
Last:0.28 Vol:1186k -
gd luck dyodd
CHIONG AH 28c!!!! :) up 5 % today..
let's go..nam cheong cheong cheong
gd luck dyodd
CIMB initiates coverage with O/p Call and $0.35 TP. House note that by turnover, Nam Cheong is Msia’s largest OSV builder. The group has over 20 years of track record in building OSVs and has delivered over 80 vessels since 2007. Using Chinese yards to support its build-to-stock business model, Nam Cheong has achieved a 3-year average gross margin of 19% vs. Singapore peers’ 9%. In terms of ROE, it achieved a 3-year average of 30% vs. Singapore peers’ 7%. Although build-to-stock is not unique to Nam Cheong in Msia, the company stands out with its close relationships with Malaysian OSV owners. Malaysia’s Petronas has budgeted RM300b (US$100b) in E& P spend over 2012-17, up 70% from the previous five years, to arrest a production decline and boost reserves. Initiatives such as marginal and deepwater field developments as well as enhanced oil recovery mean more work for the Malaysian OSV sector. Given the improving OSV market, Nam Cheong has launched its most ambitious newbuild programme to date, which should propel earnings growth. Although its share price surged 96% in 2012, Nam Cheong trades at 6x CY14 P/E on a 3-year EPS CAGR of 15%. SG OSV builders are trading at 7x on flat earnings. Also, cross-sectional P/B to ROE regression analysis shows that the stock is relatively undervalued.
Shipyard in insurer’s clothing
Using Chinese yards to support its build-to-stock business model, Nam Cheong is like an insurer, underwriting customers’ construction and market risks. For the risks it takes on, Nam Cheong enjoys high vessel sales as well as superior profitability and returns vs. Singapore peers.
Given Malaysian E& P spend and a raising OSV market, we project a 3-year EPS CAGR of 15%. The group has bolstered its balance sheet and its newbuild programme is backed by long-term debt. Hence, liquidity risks are mitigated if the OSV market plunges. We initiate Nam Cheong with an Outperform and target P/E of 8x CY14 (15% premium to peers’ average). Potential catalysts are stronger-than-expected vessel sales and earnings beat.
Malaysia’s largest OSV builder
By turnover, Nam Cheong is Malaysia’s largest offshore support vessel (OSV) builder. The group has over 20 years of track record in building OSVs and has delivered over 80 vessels since 2007. Using Chinese yards to support its build-to-stock business model, Nam Cheong has achieved a 3-year average gross margin of 19% vs. Singapore peers’ 9%. In terms of ROE, it achieved a 3-year average of 30% vs. Singapore peers’ 7%. Although build-to-stock is not unique to Nam Cheong in Malaysia, the company stands out with its close relationships with Malaysian OSV owners.
Rosy outlook
Malaysia’s Petronas has budgeted RM300bn (US$100bn) in E& P spend over 2012-17, up 70% from the previous five years, to arrest a production decline and boost reserves. Initiatives such as marginal and deepwater field developments as well as enhanced oil recovery mean more work for the Malaysian OSV sector. Given the improving OSV market, Nam Cheong has launched its most ambitious newbuild programme to date, which should propel earnings growth.
Still cheap vs. peers
Although its share price surged 96% in 2012, Nam Cheong trades at 6x CY14 P/E on a 3-year EPS CAGR of 15%. Singapore OSV builders are trading at 7x on flat earnings. Also, our cross-sectional P/BV to ROE regression analysis shows that the stock is relatively undervalued.
Nam Cheong |
COMPANY NOTE |
NCL SP / NMCG.SI |
Current |
S$0.27 |
SHORT TERM (3 MTH) |
LONG TERM |
Market Cap
|
Avg Daily Turnover |
Free Float |
Target |
S$0.35 |
US$446.4m |
US$1.98m |
49.7% |
Prev. Target |
N/A |
S$567.8m |
S$2.48m |
2,103 m shares |
Up/Downside |
28.2% |
Conviction| |
| |
Buy when there is a weakness in the price now.. gd value
truly a gd analyst..buying into nam cheong.. gd luck dyodd
| Terence Wong: " Am selling OCEAN SKY, MARCO POLO buying NAM CHEONG" |
Written by Terence Wong, CFA (OSK-DMG)
Monday, 24 June 2013 18:00
Excerpts from report today byTerence Wong, co-head of research at OSK-DMG Terence Wong, CFA. MY MODEL portfolio came off by 0.9% WoW (week-on-week), which was slightly better than STI’s 1.2% decline.The poor showing was due largely to the possibility of a premature tapering of the QE by the Fed.
I will be making a few changes to my portfolio:
> Ocean Sky (Sell 1.2m shares at SGD0.176). The dividends that I have been waiting for has finally been dished out – SGD0.024 in all.
When I bought into the stock, I thought that the mouth-watering yields of over 10% would have been a big draw.
But investors thought otherwise. After taking into account the dividend collected, I will have made no gains with this investment.
> Switching out from Marco Polo Marine (Sell 500k shares at SGD0.375) into Nam Cheong (Buy 750k shares at SGD0.265). Marco Polo was another disappointment. Given the improvement in charter rates and the implementation of the Indonesian cabotage law, I would have expected more from the shipcharterer/builder. Fundamentals still remain sound, but I believe Malaysia-based ship-builder Nam Cheong will likely outperform on the back of strong orders from national oil company Petronas.  |
check out DBS target price for this stock.. gd luck dyodd
Stock Picks – Small /Mid Cap
Rec’n Price ($)
14 Jun
Target Price
($)
Nam Cheong Buy 0.275 0.36
ozone2002 ( Date: 18-May-2013 10:33) Posted:
very good returns for a growth stock
gd luck dyodd.. business returns as good as Vard.
ozone2002 ( Date: 28-Aug-2012 10:01) Posted:
been advocating this stock since Jun..
finally it's above 20c.. & top volume..
DBS also aggressively promoting this stock..
gd fundamentals.. gd margins..
gd luck dyodd. |
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keeping it for good:)
aputako ( Date: 04-Jun-2013 13:47) Posted:
| Agreed. This one is a profit company. Can buy and keep. My view. |
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Agreed. This one is a profit company. Can buy and keep. My view.
Excerpts from analysts' reports
OCBC Investment Research raises fair value of Nam Cheong to 35 cents.Analysts: Chia Jiunyang, CFA, and Low Pei Han, CFA
Petronas had pledged to spend RM300b in capital expenditure over 2011-15, 80% more than the previous 5-year period.
We believe this will likely result in increased investments across the Malaysian offshore oil & gas industry.
Already, Nam Cheong is seeing a healthy pick-up in order wins (FY11: 13 vessels FY12: 21 vessels) and it has recently expanded its shipbuilding programme to 28 vessels for FY14F (FY13: 19 vessels).
Its large order-book of RM1.3b, for 26 vessels delivered over FY13-15F, helps to mitigate its risk by providing a base level of earnings.
Given the strong growth profile, we find current valuation (FY13F PER of 8.6x) attractive.
We now raise our FV to S$0.35 (previously S$0.30) on a higher PER of 11x. Maintain BUY.
will It hit 30 cents this week??
Dipped Bit this week
