Nam Cheong

Nam Cheong: UOB Kay Hian maintains Buy Call with $0.30 TP. House hosted a non-deal roadshow for Nam Cheong on 2 Oct in Kuala Lumpur. Management highlighted the key success factors behind Nam Cheong’s build-to-stock business model, and also plans to expand regional market share as a new OSV cycle unfolds. House note that Nam Cheong remains the preferred shipyard for many vessel owners due to its attractive BTS model. In addition, Nam Cheong undertakes the market risk for its customers until the vessel is sold, which usually takes place a few mths before vessel delivery only after the customer has secured a firm charter contract for the vessel. Grp has medium- and long-term plans to increase its regional market share by securing more customers in the Middle East, West Africa and Asia and believe Nam Cheong’s shipbuilding programme could increase from 18 and 19 vessels to be delivered in 2012 and 2013 respectively to 30 vessel deliveries per year in 3-5 years’ time.