Broker Name: CGS International

Date of Report: January 30, 2026

Excerpt from CGS International report.

Report Summary

• Nam Cheong Limited (NCL), an offshore services provider focused on Malaysia and the Middle East, is initiated with an “Add” rating and a target price of S\$1.87, representing a 57% upside to current price, based on 11x FY27F P/E which is at a 35% discount to peers.
• Earnings visibility is underpinned by a young fleet with 64% on long-term charters, planned expansion from 36 to 42 vessels by end-2026, and newbuild order potential as global OSV fleets age and replacement demand rises.
• Key growth drivers include higher fleet utilisation (forecast to reach 68-70% by FY26F-27F), additional revenue from new vessels (estimated RM75m p.a.), and shipbuilding orders (forecasting two third-party orders worth US\$30m in 2026).
• Recent vessel sales have enabled debt reduction and balance sheet deleveraging, with net gearing forecast to fall to 12% by FY27F and annual interest cost savings of c.RM3m.
• Potential re-rating catalysts are stronger-than-expected newbuild orders, higher fleet utilisation, and possible dividend resumption in FY26F after years of suspension.
• Risks include reduced offshore capex by oil majors, charter cancellations, or delays/failure to secure new shipbuilding contracts.
• Financials show revenue growth of 8-11% in FY26F-27F, supported by fleet additions and improved utilisation, with a 12% core net profit CAGR forecast over FY25F-27F.
• NCL’s environmental, social, and governance (ESG) efforts are evolving, focused on safety, fuel-efficient vessels, and compliance, though total emissions have risen with the scale of operations.
• The industry faces a replacement-driven upcycle due to an ageing global OSV fleet, while NCL’s strategic position and young fleet offer competitive advantages.
• Management is experienced, and the company has a track record of delivering specialised vessels to a broad customer base; balance sheet improvements may enable future dividends.

Above is an excerpt from a report by CGS International. Clients of CGS International can be the first to access the full report from the CGS International website : https://www.cgsi.com.sg