How Nam Cheong turned from market darling to dreaded heartbreaker

Can it tide through the downturn?

Nam Cheong has fallen from grace. While it used to break record after profit record in the past, the shipbuilder has now become a consistent disappointment when it comes to meeting earnings forecasts.

According to a report from CIMB, Nam Cheong's core shipbuilding and ship chartering operations failed to deliver good results in the third quarter, impacted by the current oil price downturn.

On a year-to-date basis, Nam Cheong has only sold two vessels, and CIMB analysts do not expect any more sales this year.

"From three consecutive record-breaking years in terms of vessel sales and earnings (2012-14), Nam Cheong has now the unenviable record of breaching its worst performance. Its previous worst performance was in GFC (2009) when it sold four vessels," said the report.

However, Nam Cheong should be able to weather the storm thanks to its well-spaced debt maturity profile.

"Studying its debt maturity profile, we believe that Nam Cheong should be able to tide through the downturn," CIMB said.