Inspiring more confidence

  2 more PSVs sold to customers in West Africa

 

programmes for FY12/13On track to realising its built-to-stock

  Expect robust earnings momentum hereon

  Maintain BUY with higher TP of S$0.30

Another round of vessel sale contracts.

announced that it has secured vessel sale contracts for 2

Platform Supply Vessels (PSVs) worth a total of US$52.1m

from two new West African customers. The PSVs – one is

3,000 dwt and the other 5,000 dwt – are part of its 2013

built to stock programme and will be delivered in 1Q13. With

this contract, Nam Cheong has sold 5 vessels out of its 2013

newbuilding programme, which comprises 19 vessels overall.Nam Cheong

Key strategies bearing fruit.

Cheong’s footprint in the West African market, which is

expected to be one of the key growth areas for new offshore oil

& gas developments in the future, along with the Brazilian and

Gulf of Mexico markets. Nam Cheong sold its first vessel (a

3,000 dwt PSV) into this market in August, to a different

customer. The sale of the 3 PSVs (including the sale in August) is

also in line with management strategy to focus its 2013 built-tostock

programme on the PSV market, away from AHTS vessels

as in the past.This vessel sale expands Nam

Expect robust earnings momentum, maintain BUY.

vessel sales are within expectations, there is no change to our

earnings estimates for FY12/13F. But, given the momentum in

vessel sales, we have more confidence in management’s ability

to deliver record earnings going forward. Hence, we roll over

our valuation to reflect FY13F earnings and revise up our TP to

S$0.30, based on a higher target PE multiple of 9x (from 8x

previously), still well within the usual range of 7-11x PE that we

use in valuing SGX-listed small/mid cap offshore yards.As the