Nam Cheong

Nam Cheong: Awarded LOI to build 4 multi-purpose PSV from Bumi Armada. The contract value is approx US$130m ($165m) The PSVs will be built as part of the grp's built-to-order series in a subcontracted yard in China. All 4 will be 88.8m in length with 4.5 DWT. The sale will contribute positively from FY12 to FY15 As of Mar 2012, co’s order book stands at approx RM628m and co has a build to stock programme to anticipate rising demand for OSV. Co trades at 4.56x trailing P/E. Peers STX OSV trades at 5.41x, Swiber at 7.76x AmFrasers highlights that co is one of their top picks and will benefit from Msia’s RM300b 5 yr capex plan. Co is the dominant OSV builder with a 50% to 75% of local market share there. Reiterates Buy with TP$0.28