Nam Cheong

Nam Cheong: OSK DMG found from house analysis that street estimates of Nam Cheong (NCL) are too low. FY13F net profit forecast of Rm181m is 10% above the average estimate, which is predicated on gross margin narrowing to 18.65%. The twin effects of a higher-margin vessel mix and the recent charter of NCL’s 12,000bhp AHTS at an estimated 50% gross margin should arrest any margin slide. House expect consensus upgrades following the company’s 2QFY13F results, and reiterate BUY call.