Nam Cheong wins $70m contracts for five vessels

Highlights buoyant OSV prospects, says OCBC.

Nam Cheong Limited announced 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, reports OCBC Investment Research.

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 andNam Cheong’s solid industry standing as a dominant OSV shipbuilder," said OCBC Investment Research, citing Nam Cheong's current cumulative order book of ~MYR1.5b and annuncing that it is mantaining its BUY rating and S$0.37 fair value rating.