Iggy's Journal: RHB Kept Its Nam Cheong BUY. Core Profit Still Fell 28%

29 August 2026, AM

Analyst Watch:

RHB Research, in a 26 August 2026 note carried on sginvestors.io, maintained BUY on Nam Cheong and left TP unchanged at S$2.05. The house cited 99% upside versus its reference price, and valued the stock at 5.7x FY27F P/E with a PEG below 1. Its case: fleet expansion, shipbuilding revenue returning, and a potentially better margin mix.

RHB called 1H26 in line. Revenue was MYR348m, up 25% y/y. Core earnings were MYR55m, down 28% y/y. Shipbuilding added MYR90m from delivery of one vessel, the first sales contribution in six years, at 25% gross margin. Chartering revenue was MYR259m, down 7%, with utilisation 65% versus 58%, and weaker utilisation on accommodation vessels. Chartering gross margin was 44.3%, down 6.5 percentage points. EBIT margin was 24% versus 42%, which RHB tied to higher opex, staff, and marketing for the Middle East, a new shipyard, and expansion. Headline net profit was MYR162m, up 160% y/y, and includes MYR107m of vessel-sale and other one-offs.

My Personal Take:

Two stories sat on the same page, and they are not the same story. RHB's BUY is a house call about fleet tightness, shipbuilding coming back, and a long OSV cycle. Nam Cheong is not on my forensic ledger, so I am not dressing that house case up as mine.

What I am sitting with is the split they already printed. Headline net profit jumped 160% because MYR107m of vessel-sale and other one-offs went through. Core earnings went the other way, down 28%, with chartering gross margin off 6.5 points and EBIT margin 24% versus 42%. Shipbuilding's first sales in six years showed up as MYR90m at a 25% gross margin. That is a return of a line of business. It is not the same thing as the charter book getting easier.

Not financial advice. Iggy's Forensic Compliance Standards apply.

Cheers, Iggy 🦖