Tiong Woon

[millionairemind]

May 11, 2010, 6.05 pm (Singapore time)

Tiong Woon reports higher Q3 profit after sale of pty

By ANGELA TAN

Tiong Woon Corporation Holding Ltd said on Tuesday that its net profit for the fiscal third quarter ended March 31, 2010 rose 35 per cent to S$9.59 million.

The bottomline was boosted by a S$10.6 million gain from the sale of the property at No. 13 Pandan Crescent.

Turnover fell 46 per cent to S$28.36 million.

[Musicwhiz]

Noted that most of the profits for 3Q were made up of exceptional gain, otherwise the Company would have been in the red for 3Q. Quite a shocking set of results as I always thought their revenue base was made up of firm contracts and demand.

Wondering if TW's results will have any bearing on Tat Hong's? Hmm.....

[ThinkNotLeft]

I wld think that TW's results, to some extent, will be representative of Tat Hong's results. Both are in crane business and both are suffering from over-supply of cranes, if I am not wrong.

[millionairemind]

I wld think that TW's results, to some extent, will be representative of Tat Hong's results. Both are in crane business and both are suffering from over-supply of cranes, if I am not wrong.

Hello TNL,

Welcome to Investideas

Cheers,
mm

[Musicwhiz]

I wld think that TW's results, to some extent, will be representative of Tat Hong's results. Both are in crane business and both are suffering from over-supply of cranes, if I am not wrong.

Yes you are correct on the over-supply. But Tat Hong has one advantage of transforming itself into a "rental" company, by converting its inventories into fixed assets. TW is not doing that, as I noticed.

Also, Tat Hong has a growing Tower Crane division, which will hopefully mitigate any fall in revenues from sale of cranes.

anyway, Tat Hong will release results on May 24, 2010. I can only hope for the best.

[ThinkNotLeft]

But Tat Hong has one advantage of transforming itself into a "rental" company, by converting its inventories into fixed asset.

Hi MW

Logically, the rental idea will not reverse the over-supply predicament. An over-supply situation will cause crane prices to drop. Given lower crane prices, crane rentals should also drop.

Personally, since I lack domain knowledge in most/all industries, I will try to avoid over-supply plays because I can never know whether the company's earnings will become worse.

For instance, I am looking at Jaya recently. Jaya has a low valuation but I held myself back from buying Jaya because of the possible over-supply in offshore marine vessels.

[Musicwhiz]

True about the rental rates - Tat Hong's CEO himself expects rates to soften by 10-15% in this Financial Year (FY 2011).

But I purchased at a margin of safety, and am hoping that can carry me through this investment.

When the upturn comes in terms of economic activity, Tat Hong and Tiong Woon will both benefit.

[winston]

TIONG WOON CORPORATION HOLDING - Singapore construction firm Tiong Woon proposed on Thursday a one-for-four rights issue at S$0.11 per rights share, representing a discount of 48.8 percent to its closing price of S$0.215 on Wednesday.

Source: Reuters

[Musicwhiz]

TIONG WOON CORPORATION HOLDING - Singapore construction firm Tiong Woon proposed on Thursday a one-for-four rights issue at S$0.11 per rights share, representing a discount of 48.8 percent to its closing price of S$0.215 on Wednesday.

Source: Reuters

First company I've seen which touts a rights issue as a "reward to shareholders". Wow. At a 48.8% discount, it would sound as such; then again it's super dilutive to EPS and also, you are only raising $10 million - how much capex can that fund? If it's for working capital per se then you've got to question how they manage their cash flows.......

[winston]

not vested

Singapore engineering and construction firm Tiong Woon said a subsidiary has clinched a contract to help build what it says will be the city-state's largest sea water desalination plant.

Source: Reuters