Nam Cheong

Nam Cheong: Nam Cheong’s executive chairman, Datuk Tiong Su Kouk has raised his total interest in the counter to 50.50% (7.15% direct and 43.36 deemed) from 50.47%, after his spouse, Datin Wong Bak Hee purchased 650,000 shares at $305,500 representing an average price of $0.470 on 26th Aug ‘14. According to the Business Times, this is the first time since Mar ’12 where the chairman has recorded his first on-market trade, He previously acquired 800,000 shares at 19¢ apiece during 14th Mar to 16th Mar ’12. The last purchase by the chairman may signal management’s positive outlook on the company. In June this year, Nam Cheong had 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, at around the “than all-time high”. The group’s share price subsequently rallied another 25 to 30% to current levels. Nam Cheong’s recent 2Q14 results were ahead of street estimates, aided by one-off gains, otherwise core earnings came in within expectations. Net profit surged 55% y/y to RM63.3m on revenue of RM378.8m (+38%), buoyed by progressive recognition of vessel sales (RM355.6m, +37%) and higher chartering revenue (RM23.2m, +44%) from the addition of two new vessels. Management remains upbeat about prospects for the E&P sector with global spending projected to reach a new record of US$723b in 2014 and US$1t by 2017. Ytd, the group has bagged order wins for 13 vessels worth US$290m, lifting order book to RM1.7b (up from RM1.4b in 1Q14), with deliveries up to 2015. Nam Cheong currently trades at 9.4x forward P/E. The street has seven Buy and 1 Hold rating on the counter with consensus TP of $0.53.