Nam Cheong coverage started at "sell", 27-cent target by KGI Fraser

Stock Name: Nam Cheong
Company Name: NAM CHEONG LIMITED

Research House: KGI Fraser

Price Call: SELL

Target Price: 0.27

SINGAPORE (March 31): KGI Fraser Securities has started coverage on Nam Cheong with a "sell" rating and price target of 27 cents, based on six times projected 2015 earnings.

The offshore support vessel builder's 40% annual earnings growth in the last three years is "a thing of the past" as the market is expected to face an oversupply of such vessels this year, according to Nam Cheong analyst Joel Ng.

"We see pressure on margins as it sells its built to stock vessels in a much weaker market that we expect to persist well into 2015," he wrote in a note today.