Nam Cheong

Nam Cheong: OCBC ups TP to $0.35 from $0.30. House note that Petronas had pledged to spend RM300b in capital expenditure over 2011-15, 80% more than the previous 5-year period. 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 MYR1.3b, for 26 vessels delivered over FY13-15F, helps to mitigate its risk by providing a base level of earnings.