Nam Cheong/ Marco Polo Marine

Nam Cheong/ Marco Polo Marine: Nam Cheong maintains its strong contract win momentum with the addition of US$90m worth of contracts, as well as the formation of a JV with Marco Polo Marine to expand its services into the chartering space. The new contracts, expected for delivery in 2014, includes a platform supply vessel for repeat client- Bumi Armada, an accommodation work vessel for the JVCo and two anchor handling towing supply vessels to a new Vietnam-based customer and Malaysia-based repeat customer. Closely following the sale of six vessels in the past two months and the 17 sold year-to-date, the new contracts raises Nam Cheong's cumulative order book to a healthy RM2b ($790.1m) consisting 29 vessels with deliveries through 2016. In addition, the 50/50 JV with Marco Polo Marine is intended to combine Nam Cheong's shipbuilding capabilities and Marco Polo Marine's chartering expertise, to seize opportunities in the region, underpinned by the rising rig count and strong utilisation rates in the OSV sector. At the current prices, Nam Cheong ($0.48) is valued at 10x forward and Marco Polo Marine ($0.345) at 8.3x. Latest broker recommendations: OCBC maintains Buy with TP of $0.55