Nam Cheong

Nam Cheong: Recall last Friday, Nam Cheong signed LOIs worth US$186m for the sale and charter of 12 such vessels with five customers. There are options for eight more. Maybank-KE guides that these orders are a strong positive for the stock, especially in the wake of volatile oil prices. Nam Cheong has covered a large part its 2016 production output with the 20 vessels. Its subcontracting model allows it to scale up quickly and it has plenty of time to take its 2016 output to a higher level, while strong take-up by a reputable list of customers is an endorsement of its design. Maybank-KE is maintaining its Buy call with a TP of $0.55.