Nam Cheong's recent disposal of a 4,000 DWT mid-sized PSV for USD 20.5 million strengthens its balance sheet and positions the company to capitalise on the emerging upcycle in offshore-support vessel (OSV) newbuilds and charter rates.
The transaction demonstrates disciplined capital management
and reveals that vessel book values remain at least 50% below current market
resale values, suggesting significant hidden value on the balance sheet.
Nam Cheong is well-positioned to benefit from the acute
global OSV shortage. Its fleet is younger than industry peers and better
equipped to meet increasingly stringent safety and environmental standards,
giving it a competitive edge in securing contracts.
The company is already capturing elevated charter rates,
with gross margins hovering around 50% and net margins at 30%, while locking in
long-term contracts that provide revenue visibility.
According to Nam Cheong's management, the OSV newbuild
market is approaching a turning point as aging vessels require replacement,
creating a favourable supply-demand dynamic.
Nam Cheong closed at $0.915 today, 30 Dec 2025, gaining
$0.045 or 5.17%. Since investing in early Sep 2025 based on its strong earnings
potential, I have achieved a paper gain exceeding 26% in under four months.
From my technical perspective, today's breakthrough above
the neckline suggests the stock could rally to $1.10 before encountering
resistance.
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