Nam Cheong's profits climbed 86% to MYR58.7m

But it isn't resting on its laurels just yet.

According to OCBC Investment Research, Nam Cheong Limited reported a solid set of 3Q13 results, with revenue surging 140.4% YoY to MYR341.2m and PATMI jumping 86.0% to MYR58.7m.

Here's more:

This was the highest ever bottomline achieved by Nam Cheong since its RTO listing in May 2011. Revenue was in-line with our expectations but PATMI exceeded, with 9M13 revenue of MYR851.3m (+71.1%) and PATMI of MYR135.2m (+54.9%) forming 72.4% and 83.4% of our FY13 forecasts, respectively.

This strong set of results was driven by both its Shipbuilding and Vessel Chartering divisions. The former saw a 141.9% YoY increase in revenue to MYR319.7m for 3Q13, while the latter’s revenue jumped almost threefold to MYR21.5m.

Robust industry outlook to drive growth ahead
Looking ahead, the increase in demand for rigs and replacement cycle of older OSVs depicts a robust outlook for Nam Cheong, in our view.

We believe this positive trend has underpinned Nam Cheong’s strong order book growth, which now stands at MYR1.7b, of which MYR1.4b remains unrecognised (as at 30 Sep 2013).

Nam Cheong remains confident of the demand for small and mid-sized AHTS as well as mid-sized PSVs.

According to management’s internal estimates, Nam Cheong commands 12% of the global OSV market share (in terms of vessels constructed) and it aims to grow this figure by enhancing its design capabilities for the vessels under its shipbuilding programme.