Nam Cheong shareholders, calm down! This movement in the Bf Gf portfolio isn’t due to any bad news but for personal reasons. Before, I go into that, let me just give a really brief intro about this company, for the sake of investors hearing this stock for the first time.
The Business
Nam Cheong is in the business of building and selling a variety of Offshore Support Vessels (OSV) used for the shallow-water drilling industry. According to analyst reports I have read, shallow-water drilling requires oil prices of $25-50 to break even whereas deep water drilling requires $70 and above to break even. In this aspect, you can more or less be glad that the fall in oil prices may not impact Nam Cheong so hard. From this recent report I chanced upon, it seems like even Keppel Corp is relying on shallow-water drilling to tide them through these tough ......