Nam Cheong: Secures US$70m contracts for five vessel sales
Nam Cheong Limited announced this morning that it has clinched contracts worth a total of US$70m for the sale of four units of Emergency Response and Rescue Vessels (ERRVs) and one unit of Anchor Handling Towing Supply (AHTS) Vessel. The ERRVs are constructed under Nam Cheong’s build-to-order model, while the AHTS is constructed under its build-to-stock model.
These five vessels were sold to Nam Cheong’s existing customer, Sentinel Marine, with the deliveries scheduled to take place in 2015 and 2016. As a recap, Nam Cheong also secured
US$66m worth of orders recently on 30 Dec 2013, and we believe this highlights the buoyant prospects in the OSV sector and Nam Cheong’s solid industry standing as a dominant OSV shipbuilder. Its cumulative order book is now ~MYR1.5b. We maintain our BUY rating and S$0.37 fair value on Nam Cheong.
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