Nam Cheong's young fleet with an average age of just over eight years offers strong competitive advantage versus peers' fleets that average 13-15 years of age, DBS Group Research's Pei Hwa Ho says in a research report.

The offshore maritime group also benefits from strong earnings visibility thanks to captive demand from Malaysia's Petronas and a strategic shift toward 60%-70% long-term charters, the analyst says.

Nam Cheong is diversifying its geographic presence and product offerings to tap Middle Eastern and Japanese markets and growing demand for green offshore solutions. DBS initiates coverage of the stock with a buy rating and a target price of S$1.25. Shares are 1.3% higher at S$0.80.