Nam Cheong is up 3.5% at $0.205 after landing two contracts for the sale of two accommodation work barges valued at a total US$59 million ($73.4 million) to long-term repeat customer Perdana Petroleum.
The rise is definitely on the contracts, says Yue Jer Lee, an analyst at OSK Research. “Even though the contracts are within expectations, the stock is currently underpriced. It’s helping it find its way closer to fair value.” He says he’s not changing his forecasts. The contracts bring Nam Cheong’s year-to-date orderbook to MYR1.06 billion ($425 million) vs MYR757 million last year. It sold five vessels in less than two weeks.
The company noted Malaysia’s national oil company Petronas has budgeted MYR300 billion capex for 2011-2015.
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