Nam Cheong

Nam Cheong: yday announced that it entered into a JV with BT Bahtera Niaga Internasional to own and operate OSVs in the lucrative Indonesian market. OSK-DMG notes that under cabotage law, charter rates spiked up 33% in Indonesia last year. The house estimates that today, a vessel under 30% equity financing can fetch a whopping 44% ROE, which will allow Nam Cheong to boost its high-margin recurring charter income. Also the JV could provide a new source of orders and shopbuilding profits, assuming it takes on three new smaller AHTS vessels a year. OSK-DMG continues to like Nam Cheong as a industry with low valuations. Reiterates Buy with higher TP of $0.38.