Excerpt from CGS International report.
Report Summary
- Stock: Nam Cheong Limited (NCL SP)
- Action: Add (Reiterate)
- Target Price: S\$1.92 (24.7% upside from current price S\$1.54)
- Key Idea: Nam Cheong is unlocking value through its capital recycling strategy, recently selling two vessels for US\$36.7m to fund new shipbuilding activities and reduce leverage. The sales, including a newbuild multi-purpose vessel and an older AHTS, highlight disciplined capital allocation and strong OSV (offshore support vessel) demand, even amid oil price volatility and geopolitical uncertainty.
- Earnings Revision: FY26F EPS raised by 7% on stronger shipbuilding revenues and interest savings from faster debt repayment.
- Valuation: Target price of S\$1.92 is based on 11x FY27F P/E, about 20% below global OSV peers, reflecting NCL’s smaller scale.
- Actionable Insight: Investors are advised to Add NCL with a target price of S\$1.92, given upside from further vessel disposals, fleet expansion, and higher shipbuilding orders. Downside risks include lower utilisation or higher costs.
- Ticker: NCL SP
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.cgs-cimb.com/
