Broker: CGS International
Date of Report: April 22, 2026
Excerpt from CGS International report.
Report Summary
Stock: Nam Cheong Limited (NCL SP)
Action: Add (Buy)
Target Price: S$1.92
Current Price: S$1.54
Key Highlights & Actionable Insights:
- Capital Recycling Strategy: Nam Cheong Limited (NCL) continues to unlock value by selling two vessels for US\$36.7m, with proceeds redeployed into shipbuilding. This supports future growth and reduces leverage.
- Discipline in Asset Management: The sale of a newbuild multi-purpose vessel (originally earmarked for NCL’s own fleet) and an older vessel demonstrates disciplined capital allocation, securing attractive upfront returns amid oil price volatility.
- EPS Upgrade: FY26F EPS raised by 7%, mainly due to stronger yard revenues and interest cost savings from faster debt repayment. Small reductions to FY27F/28F due to absence of chartering income from sold vessels.
- Valuation: Target price maintained at S\$1.92, based on 11x FY27F P/E, about 20% below global OSV peers due to NCL’s smaller scale.
- Re-rating Catalysts: Fleet expansion, unexpected shipbuilding orders, and further vessel disposals could drive upside. Downside risks include lower-than-expected utilisation and margin pressure from higher costs.
Implications:
NCL’s strategy of capital recycling and disciplined asset sales underpins near-term returns and positions the company for future expansion, supporting its Add (Buy) call and price target of S$1.92.
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/
