For DBS analyst Ho Pei Hwa, the transactions have catalysed an increase in target price to $1.90 from the previous $1.60. In her April 22 report, she states that Nam Cheong has made another “breakthrough” with sale of the newbuild Geotech offshore support vessel (OSV).
The way Ho sees it, while the asset sales likely reduce recurring charter income by around 3-4%, this is more than offset by the potential for newbuild activities as she sees the sales as evidence of an emerging newbuild cycle on the back of improving OSV fundamentals.
She also points out the company’s strengthening balance sheet as its net gearing has “improved dramatically” from 0.6 times in FY2024 to below 0.1 times as of April 2026, halving restructured debt to around RM285 ($91.7) million in just over two years.
While Nam Cheong’s stock price has grown more than ten-fold over the past two years, Ho is confident that the counter can reach further highs, describing that its rally “still has further legs”. With high oil prices and rising energy security concerns sustaining demand for oil and gas infrastructure, including storage terminals and production related facilities, she believes Nam Cheong will be able to capitalise on opportunities in this space.
Ho values Nam Cheong at 12 times of P/E, up from the previous 10 times. Her current forecasts have only factored in four newbuild projects announced earlier this year, and further newbuild wins would prompt earnings upgrades and share price re-rating.
As at around 10:10 am on April 22, Nam Cheong shares have risen by four cents or 2.6% to $1.58.
