Nordic (19.1 cents) now has a market cap of S$76.4 million. Chart: Yahoo!The sizzling share price of Nordic Group has risen 77% since the start of this year (from 10.8 cents to 19.1 cents yesterday) on a number of positive factors, including a strong set of 2014 results and upcoming M&A.
For more insights into this company, which has been low-profile in recent years until recently, here are excerpts of the message by Chang Yeh Hong, Executive Chairman of Nordic Group, in the just-released 2014 annual report.
» BUSINESS PROSPECTS
During the year, the Group made great strides to entrench its leadership position in the markets it operates in by boosting the quality and range of its product and solutions.
We have newly forged strategic partnerships with original equipment manufacturers Praxis Automation Technology, from the Netherlands, and PSM Instrumentation Limited, from the United Kingdom, to offer our customers a more holistic and integrated suite of products and solutions. This will not only further extend the Group’s leading edge in its pursuit to clinch more contracts, but also allow us to compete for more complicated projects which carry significantly higher contract values.
Chang Yeh Hong, executive chairman of Nordic: He bought 1.1 m shares yesterday at 19.2 cents apiece. NextInsight file photo.In line with this strategy, we will be on the lookout for a broader spectrum of products and solutions to add to our existing suite as well as other potential merger and acquisition (“M&A”) targets that will quickly allow us to penetrate new markets.
Once these services gain traction in the market, we will be able to attract more strategic partnerships which hopefully will have a positive impact on the Group’s results.
The Group enjoys a stable base of growth within its System Integration and MRO & Trading business segments. In the region, the Group works with many established customers such as the Keppel Group of companies, Sembcorp, ASL Shipyard and Jaya Shipbuilding & Engineering in Singapore, while it services major shipyards in Guangzhou, Zhejiang, Jiangsu, Dalian and Shandong in China.
In China, the government recently released a white list of its preferred shipyard partners. We stand in good shape with 60% of the shipyards in this white list already customers of the Group. This proves the Group’s selective sales strategy to target strong and recognised clients has worked, and has provided Nordic a market dominant position in China which will act as a springboard to capture more market share.
As our marine, offshore oil & gas and petrochemicals markets recover, the immediate future looks sound for our Scaffolding Services business segment, which is a preferred contractor for companies such as ExxonMobil, Chevron Oronite, Invista Singapore Fibres, Kuraray Asia Pacific, BASF, Celanese, Lucite International and Keppel Shipyard. These clients on Jurong Island will continue to require regular shutdown maintenance works every two years in addition to daily plant maintenance and project works.
While Scaffolding Services business segment is labour-intensive, the Budget 2015 will provide some reprieve on the foreign labour levies front as we continue to invest in productivity initiatives to reduce our reliance on labour.
|
» DIVIDENDS |
