Monday, December 30, 2013
Nam Cheong: OSK-DMG anticipates Nam Cheong to give shareholders a New Year present with some new orders. The last PSV for CY13 delivery should be sold, together with some vessels for CY14 delivery, if the pattern of selling vessels in batches holds. This will bring FY13 vessel sales to >22, exceeding FY12's record of 21. The house notes Nam Cheong will be entering 2014 in a position of strength. Its orderbook stands at a record RM1.7b , offering a high level of baseline activity that secures future quarters' profitability. Meanwhile, the large rig orderbook and tightening global OSV supply are factors that presage a healthy tailwind for Nam Cheong, which is now the largest shallow water OSV builder in the world (>12% mkt share). Nam Cheong stock combines a high 24% growth and undemanding 6.7x FY14e P/E, 6.8x EV/EBITDA, 0.12x net gearing and expected increases in dividend to yield 3% - 4.2% over FY13-15e. OSK-DMG tips as its sector Top Pick , reiterates Buy and lifts TP to $0.45.