Nam Cheong

Nam Cheong: In its second contract announcement for the yr, Nam Cheong has secured RM 223.6 (US$72.1m) in sales contracts from Icon Offshore Berhard, one of Msia’s largest OSV grp, bringing its order book to RM1.3b, underpinning earrings visibility for the next 4 yrs. Ytd grp has secured abt RM626.6m worth of contracts. The contracts are for 2 AHTS and 4 units of emergency-response and rescue vessels. The vessels were sold to two of its existing customers and are scheduled for delivery between 2q13 and 4Q14. and are expected to contribute positively to the earnings of the group for FY13 and FY14. Nam Cheong’s share price has been pretty muted, despite a recent strong qtrly earnings, and latest set of contract wins could just be what is needed to give share price a kicker. To recap, Petronas has guidance for among the highest capex plans in the region and Asia over the next few yrs, and Nam Cheong stands as a direct beneficiary from the expected O&G boom in Msia. OCBC maintains Buy with $0.30 TP.