Nam Cheong Limited reported its 1Q14 results this morning, with revenue soaring 73.5% YoY to MYR407.3m and PATMI jumping 98.7% to MYR71.1m. This constituted 22.8% and 29.1% of our FY14 forecasts, respectively. Even after adjusting for exceptional items, estimated core PATMI came in at MYR66.0m (+118.9% YoY), forming 27.0% of our full-year earnings projection and ahead of our expectations.

Both of Nam Cheong’s core segments performed well, with revenue for its Shipbuilding and Vessel Chartering division surging by 68% and 274% YoY, while gross profit also spiked up by 94% and 131%, respectively. As such, 1Q14 gross profit came in at 21.2%, above the 18.6% achieved in 1Q13. We will provide more details after the analyst briefing. Maintain BUY, but our fair value estimate of S$0.42 is under review.

Source: OCBC Research - 15 May 2014