Nam Cheong: Latest victim of a contract cancellation after Petra Offshore, a subsidiary of Malaysia's Perdana Petroleum, terminated its agreement for a accommodation work barge.
- Contract previously signed in Jun '14 and was worth up to US$42m (including options).
- While oil price pressures are likely to persist in the near to medium term, the O&G sector may see further downside pain.
- Although valuations look cheap, there is little reason for investors to buy in now as the earnings downgrade cycle will likely continue.
Maybank KE's last rating on Nam Cheong was a Sell with TP of $0.12.