Nam Cheong Limited reported 4Q13 revenue of MYR406.2m, representing a YoY increase of 7.1%. PATMI jumped 42.8% to MY70.5m, such that FY13 revenue and PATMI grew by 43.5% and 50.6% to MYR1,257.5m and MYR205.6m, respectively. The latter exceeded our FY13 forecast by 9.8%. Nam Cheong saw record order wins of 24 vessels in FY13 which amounted to ~US$500m, surpassing its 2012 record of 21 vessels sold. Its order book value stood at MYR1.5b, as at 26 Feb 2014. A special dividend of 0.5 S cent/share was declared, on top of a first and final dividend of 0.5 S cent/share, bringing total FY13 DPS to 1 S cent, and translates into a yield of 2.9%. Looking ahead, Nam Cheong remains positive on Petronas’ plans to rejuvenate mature assets and develop marginal oilfields. We believe the global replacement cycle of aging OSV fleet will also aid Nam Cheong’s order wins momentum ahead. We will provide more details after the analyst briefing. Maintain BUY, but place our fair value estimate of S$0.37 under review.

Source: OCBC Research - 26 Feb 2014