Nam Cheong

Nam Cheong: Maybank-KE raises EPS forecast by 23-26% over FY15-16E on positive vessel sales and contract win outlook. The 2016 building program should consist 30 vessels worth US$585m vs the previous conservative assumption of 26 vessels. There’s also a high chance of Perdana Petroleum exercising its options for two additional BTO accommodation work barges, potentially bringing total orders to 4 units worth US$168m. Nam Cheong should benefit disproportionately from a recovering OSV market on Petronas’ spending push, given its preferred builder status for M’sian OSV operators. The house remains confident that it could maintain track record of selling all its build-to-stock vessels before delivery. TP raised to $0.55, based on 2.2x P/B (previously 1.9x), on 20% assumed sustainable ROE vs 17% previously. Other houses have also been upgrading TP on the stock.