Nam Cheong capitalizes on Indonesian O&G boom with timely vessel sale and dual-pronged growth strategy

Reference to my earlier post dated 30 Dec 2025: Nam Cheong: Positioned to Ride the OSV Market Recovery

Nam Cheong reached a peak of $1.12 on both 21 and 22 January 2026, surpassing my prediction of $1.10. It closed at $1.08 on 26 January 2026.

After market close on 26 January 2025, Nam Cheong announced that the Group had entered into a sales agreement with an Indonesian customer to sell one (1) 11-year-old 3,000 deadweight tonnage (“DWT”) platform support vessel (“PSV”) for US$19.8 million.

The vessel sale is part of the Group’s fleet reprofiling initiatives and is expected to contribute positively to the Group’s earnings for the financial year ending 2026. Vessel delivery is expected to be concluded in 1Q2026, and net proceeds will be allocated for debt repayment and working capital needs.

The vessel is sold to an Indonesian customer for immediate deployment to support ongoing operations. This transaction aligns with the pickup in offshore activities in Indonesia, where investments in upstream oil and gas (“O&G”) reached a decade-high of US$7.19 billion in 1H2025, up 28.6% y-o-y.

Following the vessel sale, Nam Cheong will manage a total of 36 OSVs with an average vessel age of 9 years. The relatively young fleet provides the Group with a long runway to generate recurring income from charter contracts, or monetisation at opportune times to advance capital recycling.

Globally, the OSV market reached US$4.73 billion in 2024, and is projected to grow at a 7.5% compound annual growth rate (“CAGR”) between 2025 to 2034, reaching US$9.75 billion by 2034.

Commenting on the vessel sale, Mr. Leong Seng Keat, Chief Executive Officer of Nam Cheong said, “I believe that we are at a sweet spot supported by our complementary OSV chartering and shipbuilding businesses. We have the optionality to generate recurring income through the monetisation of our older vessels via ship sales or continue to generate revenue with our chartering services. At the same time, with the resumption of our shipbuilding business, we have the capability of external vessel sales or expanding our ship chartering fleet. We believe this dual-pronged strategy will not only advance growth momentum with stronger cash flows but also unlock shareholder value over time.”

I purchased the stock at $0.72 per share on 5 Sep 2025 and already have an unrealized profit of about 50% in less than 4 months. I will continue holding this position given this positive news. My Chinese New Year angbao has arrived early this year with stocks like Nam Cheong and UOB Kay Hian.

Prescientsuper
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