Nam Cheong Ltd announced that it has sold six vessels worth a total of US$72.1m to two of its existing customers. Two 5,150 bhps Anchor Handing Towing Supply (AHTS) vessels were sold to Icon Offshore Berhad, one of Malaysia’s largest OSV group, while four Emergency Response and Rescue Vessels (ERRVs) were sold to a Singapore-based company that provides ship management and chartering services. The six vessels will be built in one of its sub-contracted yards in China with expected deliveries between 2Q13 and 4Q14. We continue to like Nam Cheong for its exposure to the buoyant offshore market in Malaysia and its close ties with Petronas-licensed companies. Its build-to-stock shipbuilding programme enables it to capture the strong domestic vessel demand, while its build-to-order business model helps lower its overall risk profile. Maintain BUY with unchanged fair value estimate of S$0.30.
Six vessels sold to two customers
Last week, Nam Cheong Ltd announced that it has sold six vessels worth a total of US$72.1m to two of its existing customers. Two 5,150 bhps Anchor Handing Towing Supply (AHTS) vessels were sold to Icon Offshore Berhad, one of Malaysia’s largest OSV group. The AHTS vessels, which are part of Nam Cheong’s build-to-stock series, will be deployed in Malaysian waters upon delivery. Four Emergency Response and Rescue Vessels (ERRVs) were sold to a Singapore-based company that provides ship management and chartering services. The ERRVs, constructed under its build-to-model model, will be deployed in North Sea. The six vessels will be built in one of its sub-contracted yards in China with expected deliveries between 2Q13 and 4Q14. With the contract wins, Nam Cheong’s order-book to date remains at RM1.3b.
Strong vessel demand
Outlook for the Malaysian offshore industry remains robust, underpinned by Petronas’ planned capex of RM300b across 2011-15. According to the management, the domestic market for small size AHTS vessels remains buoyant, especially within the shallow-water Malay basin. Nam Cheong is also seeing vessel demand arising from top-side maintenance, hook-up and commissioning and exploitation of reserve. In addition, there is also a need for older vessels to be replaced with new and higher specification ones.
Maintain BUY
Nam Cheong remains one of our preferred picks among the small-cap oil & gas space. We continue to like the group for its exposure to the buoyant offshore market in Malaysia and its close ties with Petronas-licensed companies. Its build-to-stock business model enables it to capture the strong domestic vessel demand, while its build-to-order helps lower its overall risk profile. Maintain BUY with unchanged fair value estimate of S$0.30.
Last week, Nam Cheong Ltd announced that it has sold six vessels worth a total of US$72.1m to two of its existing customers. Two 5,150 bhps Anchor Handing Towing Supply (AHTS) vessels were sold to Icon Offshore Berhad, one of Malaysia’s largest OSV group. The AHTS vessels, which are part of Nam Cheong’s build-to-stock series, will be deployed in Malaysian waters upon delivery. Four Emergency Response and Rescue Vessels (ERRVs) were sold to a Singapore-based company that provides ship management and chartering services. The ERRVs, constructed under its build-to-model model, will be deployed in North Sea. The six vessels will be built in one of its sub-contracted yards in China with expected deliveries between 2Q13 and 4Q14. With the contract wins, Nam Cheong’s order-book to date remains at RM1.3b.
Strong vessel demand
Outlook for the Malaysian offshore industry remains robust, underpinned by Petronas’ planned capex of RM300b across 2011-15. According to the management, the domestic market for small size AHTS vessels remains buoyant, especially within the shallow-water Malay basin. Nam Cheong is also seeing vessel demand arising from top-side maintenance, hook-up and commissioning and exploitation of reserve. In addition, there is also a need for older vessels to be replaced with new and higher specification ones.
Maintain BUY
Nam Cheong remains one of our preferred picks among the small-cap oil & gas space. We continue to like the group for its exposure to the buoyant offshore market in Malaysia and its close ties with Petronas-licensed companies. Its build-to-stock business model enables it to capture the strong domestic vessel demand, while its build-to-order helps lower its overall risk profile. Maintain BUY with unchanged fair value estimate of S$0.30.
No comments:
Post a Comment