Nam Cheong

Nam Cheong: Nam Cheong's share price continues its push towards new all-time highs, convincingly breaking past the $0.40 resistance mark to a new high of $0.42 today, partly fuelled by a recent slew of contract wins worth a total of US$176m in the last week. Despite share price nearing its all-time high, management recently conducted two share buyback transactions via the open market, buying back 2m shares at $0.375 on 23 May and 3.5m shares at $0.385 on 16 Jun, which could signal management’s positive outlook and confidence in the company. Separately, we highlight that a few houses had recently readjusted their TP on the counter upwards, after their initial TPs were met, yet we would not be surprised to see further re-rating should Nam Cheong maintains its robust order win momentum. Nam Cheong is supported by a robust order book of ~RM1.7b which provides revenue visibility over the next three years, while its dominant position in Malaysia’s offshore vessel (OSVs) ship building industry enables it to secure a steady slew of contracts from major client Petronas. Nam Cheong trades at 8.6x forward P/E. The street has eight unanimous Buy ratings on the counter with consensus TP of $0.47 and an indicative dividend yield of 1.3%.