NAM CHEONG LTD

Value investors should take note of Nam Cheong (28 cents). It's a solid business.

This morning's announcement shows the record-breaking path it has placed itself in.

NAM CHEONG CLOSE TO SETTING NEW RECORD WITH LATEST MAJOR SALES

- Four Platform Supply Vessels sold for approximately US$120 million (approximately S$150 million) to a new customer;

- Customer is an emerging offshore marine services company based in Latin America;

- Cumulative order book hits RM1.7 billion (approximately S$669 million);

- Total sales of 20 vessels for 2013 is close to record high of 21 vessel sales achieved in 2012;

- Sales to contribute positively to FY2013 and FY2014 earnings.

OSK-DMG continues to track Nam Cheong closely, coming out with a report with each major announcement. Strangely, Nam Cheong stock stubbornly clings to SGD0.28. OSK has a BUY rating with TP raised to SGD0.385

Huge Contracts Close 3Q With A Bang

NCL announced that it has sold four platform supply vessels (PSVs) for USD120m to a new customer in Latin America. This brings its orderbook to a record MYR1.7bn. At USD30m/vessel, the PSVs’ prices are well above expectations. Order momentum has clearly swung up, and we expect more large contracts in 4QFY13. Maintain BUY, with our TP raised to SGD0.385.

Expanding customer base; record orderbook. This news is doubly positive, with NCL making further inroad into the Latin American market and hitting a record orderbook of MYR1.7bn (estimated MYR1.6bn unrecognised), giving the
company revenue visibility for the next 15 months. Upcoming contracts will extend this visibility further.