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Nam Cheong Ltd Wants To Be Triple-Listed: What Does It Mean For Its Investors?

By Stanley Lim, CFA - October 21, 2014

Nam Cheong Ltd (SGX: N4E) is a leading offshore support vessel (OSV) builder based in Miri, Malaysia. The word &ldquo leading&rdquo is used appropriately here as Nam Cheong has been responsible for around 15% of global OSV production this year. According to an interview with The Edge Malaysia, Nam Cheong claims that it is the second largest builder of OSVs in this region with a 7% market share.

more details: http://www.fool.sg/2014/10/21/nam-cheong-ltd-wants-to-be-triple-listed-what-does-it-mean-for-its-investors/

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21-Oct-2014 11:18

Nam Cheong / Nam Cheong

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Married deal of 1.7mil shares done at 42.5cts. Looking very good now.

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21-Oct-2014 10:26

Nam Cheong / Nam Cheong

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I am expecting mid-Nov.

Citrine ( Date: 21-Oct-2014 10:23) Posted:

Hi Mr/Ms Sheerluck. May I know when is Q3 results? M vested...Thank you..

sheerluck ( Date: 21-Oct-2014 10:19) Posted:

Big buying in anticipation of an exceptional Q3 results. Hope NCL can break 50cts on Q3 results.

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21-Oct-2014 10:19

Nam Cheong / Nam Cheong

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Big buying in anticipation of an exceptional Q3 results. Hope NCL can break 50cts on Q3 results.

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20-Oct-2014 11:02

Vard / Vard Holdings

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Majors risks:

- Poor O& G outlook for deep water.

- Issues with brazilian yard taking ages to resolve and is still costing VARD lots of money.

- Tax issue in Brazilian still on-going.

Since they expect a marginally negative EBITA, I expect its net loss to be worse than that in Q2 FY13 where they suffered a net loss of -44mil NOK on +121mil NOK EBITA.

That Q2 loss is mainly due to the provision they have made for their Brazilian yard. It is prudent of them but I suspect they will actually need to use the provision since that yard is still problemtic till now. This round is worse because EBITA is going to be negative to begins with

I recall they are going to made provision for that Brazil tax issue but changed their mind. I suspect if they still go ahead with it, their full-year will be a loss.

The last round it reported a loss (Q2 FY13), its price dropped from $1+ to less than $1. When the actual results came out, analysts started reversing their call from buy to sell and it got hammered down to 76cts (so losing more than 25% in value). Many people got stuck.

This round, analysts got smarter and reduce TP before actual results are out. However, when the actual numbers are out, they are not going to be pretty.

Whether the current bashing down is the main course or just an appetiser really depeneds on the market. Beware that shortists are looking for any legitimnate reason to profit.

Not a call to buy/sell. Pls DYDD.

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20-Oct-2014 10:13

Nam Cheong / Nam Cheong

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7mil buy-up at 40.5cts. Seems like there are $$$ who are confident that NCL can go much higher than 40.5cts.

ballball58 ( Date: 20-Oct-2014 10:07) Posted:

Wonder who it is. Must be one of the bb as vol is large

rlong8288 ( Date: 20-Oct-2014 10:02) Posted:

Someone is pushing out 500 lots each time at 0.405

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20-Oct-2014 09:29

Nam Cheong / Nam Cheong

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NCL up 2.5% but Swiber also up 2.5%. Made sense?

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20-Oct-2014 09:16

Courts Asia / Courts Asia

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Courts current share price is near the holding cost of its major shareholder SRG which is 44cts. I suppose if its gets lower than 44cts, SRG will need to book accounting loss. SRG might want Courts mgmt to do something about it.

Courts recent volume is so low that coy share buy-back can push up the price quite easily. Well why not sit back and let Courts share buy-back do the job for retail investors.

My two-cents.

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20-Oct-2014 09:11

Nam Cheong / Nam Cheong

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If i rem correctly, NC Lis a RTO from some company called Eagle something.

tyrtok ( Date: 20-Oct-2014 08:49) Posted:

curious. anyone know what happened to this counter in oct 2010? what induce the sudden dropped in price? m & a?

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17-Oct-2014 16:38

Nam Cheong / Nam Cheong

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It is definitely risky now. The risk with NCL is its business model. The LOI is actually very useful in that it tells the market that NCL can still sell vessels. This step is important. However a confirmation of sale will really seal it for NCL. However, the long-erm question still remains: Will NCL still be able to sell vessels after this and if oil price continues to drop. So far NCL has not disappointed the market in its ability to clinch deal. On the other hand Market expectation of NCL is also high.

I don' t think it is realistic to expect a few more LOI within the next few weeks. If there are, it will really be a miracle and testiment of NCL connection and relationship with its customers.

Now I mentioned earlier that OSV works on the supply side of the OSV and part of the reason oil price drop is because no one is slowing production. But market seems to think that long-term wise the drop in oil price will inevitably affect production. I am assuming this reason for the massive sell-off.

So if oil price up because of demand (or globa growth). Long-term short-term is good for OSV.

If oil price up because supply drop (or production slowed), it actually may not be good news for OSV.

If oil price drop because supply didn' t slow down, it may not be a bad news for OSV.

Basically simply down-grading OSV on oil price without understanding demand/supply properly is not doing OSV justification. But the market is the boss. If it says down what can I say.

My two-cents.

hp3000 ( Date: 17-Oct-2014 15:43) Posted:

The problem is if go in now 0.38 or 0.385 also can' t ensure monday price will be up or down.

Think now buying any stock also very risky.

sheerluck ( Date: 17-Oct-2014 15:34) Posted:

First O& G sector too negative.

Second is a LOI.

Cannot complain if the cheong is small.

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17-Oct-2014 15:34

Nam Cheong / Nam Cheong

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First O& G sector too negative.

Second is a LOI.

Cannot complain if the cheong is small.

hp3000 ( Date: 17-Oct-2014 15:16) Posted:

Haha where got cheong ???

1 week ago it high is 0.45 now only 0.38 to 0.385.

Most stock recover abit after days of loss.

If DJI contine to down few hundred pts .... then the lau sai come again.

Yesterday DJI down no much.

danger ( Date: 17-Oct-2014 15:04) Posted:

Nam cheong cheong liao !?

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17-Oct-2014 13:00

Nam Cheong / Nam Cheong

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Tug-of-war at 38.5cts.......

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17-Oct-2014 12:28

Nam Cheong / Nam Cheong

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Think market likes this news even though only LOI. Now the recent sell-down of NCL seems like an act to collect cheap from retailers.

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17-Oct-2014 12:07

Courts Asia / Courts Asia

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Think Courts just did another 100 lots share buy-back.

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17-Oct-2014 12:05

Nam Cheong / Nam Cheong

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Can' t say it is bad news although contract wins will be stronger. Nonetheless one of the better news in this period.

ranojoy ( Date: 17-Oct-2014 11:55) Posted:

NAM CHEONG LAUNCHES NEW ANCHOR HANDLING TUG SUPPLY VESSEL

- First vessel based on Nam Cheong&rsquo s proprietary design

- Fuel-efficient, simplified design and environmentally friendly vessel

- Secured Letters of Intent worth US$186 million from new and repeat

customers, with a mix of sale and also charter of 12 of this new series of vessels

- Secured options for sale of eight additional units of such vessels

- 100% take-up rate of a total of 20 vessels planned for delivery

- Secured Letters of Intent from Bumi Armada and Farid Khan-controlled company, each for four vessels and option for four additional vessels.

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17-Oct-2014 11:15

Nam Cheong / Nam Cheong

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The only other time NCL called for a trading halt is the announcement of a contract win which it normally don' t. I am uncomfortable with the recent sell-down. It is fine it is is just a sector-wide effects. Let see if NCL can conjur some magic in this turmoiled time.

ballball58 ( Date: 17-Oct-2014 11:08) Posted:

Hope its good news as I just bought some shares this morning. fingers tightly crossed

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17-Oct-2014 11:04

Nam Cheong / Nam Cheong

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NCL just raised $200mil under its $600mil MTN programme in 26 Aug. It should have about $400mil so shouldn' t need to raise cash again.

linbei ( Date: 17-Oct-2014 10:43) Posted:

That is bad....

sun233 ( Date: 17-Oct-2014 10:34) Posted:

Probably raising cash.....

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15-Oct-2014 15:59

Nam Cheong / Nam Cheong

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Hai. Dilemma here. NCL is a growing coy but now its sector downtrend. One thing I tried to figure out is this. Global growth forecast down yes. Demand for oil dropped yes. Oil price dropped yes. But OSV works on the supply side and supply not slowing production is part of what causing the depressed oil price. So in theory OSV should still be ok.

hp3000 ( Date: 15-Oct-2014 14:45) Posted:

Your answer is very clear liao mah.

If Q3 very good also no use. No div and buy on their Q3 result is it meaningful ?

As current market is really bad will you buy and hold on Q3 untill Q4 result out ?

sheerluck ( Date: 15-Oct-2014 13:07) Posted:

Div in Q3 is highly unlikely. Need to wait till Q4. I am expecting a bumper earning in Q3 but must see if OCF improves. If it does, the chance of a final+special div will be high. But global growth and demand for oil is the really key factor for O& G now. Some analysts said NCL is more on shallow water and less affected by oil coy reducing CAPEX but still it got wrecked down bad. So cannot argue with the market.

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15-Oct-2014 13:17

Medi Lifestyle / IEV - decent results and promising developments

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IEV is pretty illquid. It can be beaten down quite easily.

It operates mainly in the O& G environment and should have also being affected it. But I think mainly is they are not really out of the woods on their loss-making D21 turnkey project which is dragging down their overall bottomline. There are not new contract wins annoucement recently as well. The profit margin for their other biz units has also dropped.

It will be useful to see what they says in their Q3 report.

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15-Oct-2014 13:07

Nam Cheong / Nam Cheong

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hp3000 ( Date: 15-Oct-2014 12:53) Posted:

The qes is if Q3 is very gd but not div or no much div will pple buy ?

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