Firstly, they expect Nam Cheong’s fleet of offshore support vessels (OSV) to enjoy better utilisation rates to around 68% for FY2026 and 70% FY2027, bringing in more cash from chartering. They also note that around 64% of its current 36-strong OSV fleet is under long-term charter, signalling earnings visibility. Both are also optimistic that the six vessels under construction could add 5% to 7% of revenue growth or around RM75 million annually.
CGS International is expressing confidence in shipyard Nam Cheong by initiating coverage of the counter and rating it as an “add” with a target price of $1.87, representing 68 cents or 57% upside from its Jan 30 closing price of $1.19.
Analysts Meghana Kande and Lim Siew Khee are bullish on Nam Cheong’s prospects for three reasons: stronger fleet utilisation and fleet expansion; newbuild replacement cycle opportunities; and balance sheet flexibility. They project Nam Cheong’s revenue to grow y-o-y by 8% and 11 % respectively for FY2026 and FY2027.
