Tat Hong

[winston]

Not vested. From CIMB:-

Tat Hong Holdings (S$2.25) - 4QFY08 results - Still in tight supply

Within our forecast but above consensus. FY08 net profit of S$89.8m (+13.7% yoy) was only 1.8% below our forecast of S$91.5m but 6% above consensus estimate of S$84.7m. Excluding gains from CSC share sales in FY07, FY08 net profit would have risen 93.8% yoy from S$46.3m in FY07. FY08 gross margins improved to 39.0% from 30.9% a year ago, on strong equipment distribution margins and a 40% yoy rise in equipment rental rates.

Revenue rose 33% yoy to S$640m. 4QFY08 net profit rose 143% yoy to S$28.4m from S$11.7m, excluding gains from CSC share sales in 4QFY07. A final dividend of S$0.038 was declared.

Operational review. 4Q08 revenue rose 37% yoy to S$183.7m on strong crane rentals (+51% yoy) and general equipment rentals (+27% yoy). Overall crane utilisation rates remained near historical highs, at 78.3% vs. 81.2% in 3QFY08. Operating expenses (+42% yoy) rose due to higher staff, equipment maintenance and depreciation costs, in line with increased business volume, including that of recently acquired businesses in Australia.

Key markets: Singapore, Australia and China. China remained a key market.

Management has a 20% earnings-contribution target for China by 2010. With the construction industry growing at 20% annually, TAT’s foray through two towercrane rental companies should allow it to capitalise on growth opportunities there. Its 20%-owned towercrane manufacturing associate, Yongmao, also recently reported sterling results and is expected to support its growth momentum.

Positive outlook. Management remains optimistic of business prospects in the next 3-5 years and expects better pricing for its new and used equipment as well as higher rental rates (up 10-15% yoy). Utilisation is expected to stay around 80%, on demand from infrastructure spending and energy-related projects in the region.

Reducing forecasts and target price but maintain Outperform. We moderate our growth assumptions and reduce our net profit forecasts by 10-12% for FY09-10. We also introduce FY11 forecasts. We now value TAT at a lower CY09 P/E of 12x (previously 15x) in view of overall P/E compressions. Our new target price of S$3.16 (previously S$4.43) still prices TAT at a 20% premium to industry peers on account of its leadership position.

[winston]

From CIMB:-

Tat Hong (Outperform, S$2.18, target S$3.16).

Management remains optimistic of business prospects in the next 3-5 years and expects better pricing for its new and used equipment as well as higher rental rates (up 10-15% yoy). Utilisation is expected to stay around 80%, on demand from infrastructure spending and energy-related projects in the region.

China remains a key market, with a 20% earnings-contribution target for 2010.

We maintain our target CY09 P/E of 12x, translating to an unchanged target price of S$3.16, or a 20% premium to industry peers on account of its leadership position.

[iam802]

Tat Hong proposed bonus issue of warrants

http://info.sgx.com/webcoranncatth.nsf/ ... penelement

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[iam802]

Convertible loan agreement with Hiap Tong Corporation Pte Ltd

http://info.sgx.com/webcoranncatth.nsf/ ... penelement

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Key Points:
- loan amount : $12.6m
- can be convertible to 20% of ordinary shares in Hiap Tong (if I read correctly)
- Hiap Tong provide lifting and haulage services to marine, petrochemical and construction
- Hiap Tong had on 16 July 2008 apply for IPO.

[iam802]

Just to add on, there is a selloff for Tat Hong as well

Tat Hong has released a statement that they are not aware of any reason for the selloff.

http://info.sgx.com/webcorannc.nsf/ef3b ... enDocument

[rooster]

There is an argument that the bonus warrants will trade tomorrow and BB drives the price down to buy warrants cheap to exercise mother shares later at S$2.50. It doesn't make sense as there is no need to drive mother price to such level does it? the sums just don't equate. Any comments from anyone?

[winston]

Not vested. From DBS:-

Tat Hong has clarified that:-
1) there is no fundamental explanations for the recent sharp sell down of the group’s share price, and 2) the corporate and industry outlooks have remained positive, as regional infrastructure projects spending and oil and gas boom continue to underscore the demand for its cranes.

Maintain Buy; TP: S$ 2.70.

[iam802]

Good rally (back) from TatHong shareholders.

Exceed yesterday's volume and price close higher. Solid white candle.

[iam802]

Question on warrants.

I saw a few announcements on SGX relating to warrants issued.

Does warrants issued drive up the volume of shares transacted?

Thanks

[rooster]

it is amazing how price at be down 10% and up 10% next day... who in their right mind would want to sell unless it is force selling?? Congrats to all who has the guts to pick up at 1.22 cts!!