Nam Cheong

Nam Cheong: UOBK’s channel check: a) Clients deferring/slowing down capex budgets for new OSV purchase b) Gross margin expected to ease from current >20% to mid-teens for the next few quarters. With Petronas cutting its capex by 15-20%, Malaysian OSV demand is expected to slow down in tandem, thus impacting Nam Cheong’s BTS model. The impact is however mitigated by its strong reputation and growing client base outside the region. UOBK downgrades to HOLD with a target price of $0.36. Entry price: $0.27.