TTJ posted a set of very good Q3/9M profit numbers last evening. As before, the latest 30Apr14 B/S has remained rock-solid; in fact, both the equity and net cash reserve positions have continued to increase/improve.
This morning, Mr Market has cautiously marked up TTJ's share price by $0.025, or 7.1%, to $0.375. Indeed, TTJ, under the present management led by founder/controlling shareholder Mr Teo Hock Chwee, is a very well run business.
(13-06-2014, 09:54 AM)dydx Wrote: [ -> ]TTJ posted a set of very good Q3/9M profit numbers last evening. As before, the latest 30Apr14 B/S has remained rock-solid; in fact, both the equity and net cash reserve positions have continued to increase/improve.
This morning, Mr Market has cautiously marked up TTJ's share price by $0.025, or 7.1%, to $0.375. Indeed, TTJ, under the present management led by founder/controlling shareholder Mr Teo Hock Chwee, is a very well run business.
TTJ is flooded with CASH, more than S$55M with insignificant debts.
Noticed they did participate (and didn't win) the latest round of dormitory tenders.
Probably they will (should) distribute more to shareholders.
I can't believe that some analysts are still recommending clients to buy Yongnam.
(Vested)
If Yongnam price is low enough (subjective), i am keen to speculate with the "regression to the mean" (ie: on its business margin). It will be interesting if the management purchase shares from market & not from options!! (Sorry to hijack this thread to post on yongnam). (Vested in TTJ)
TTJ vs. Yongnam = what a competent and prudent management can do GOOD to a business vs. what an aggressive and imprudent management can do BAD to a similar and even larger business.
A quick review of Yongnam's latest 31Mar14 B/S and that of 31Dec12…..
http://infopub.sgx.com/FileOpen/YHL-Unau...eID=297375
http://infopub.sgx.com/FileOpen/YHL-Unau...leID=23123
shows the group has been bogged down by high borrowings - which has increased substantially from $119.4m as at 31Dec12 to $183.9m as at 31Mar14 - and tight liquidity during the past approx. 15 or more months.
With arch rival Yongnam saddled with so much debts, under-utilised steel struts in the short-term, and some loss-making projects mainly due to aggressive bidding in the recent past years, the competitive landscape in the short-term could well be tilting to TTJ's favour. For sure, Yongnam now can no longer afford to bid at low prices and on all big projects, as the company needs to show that it can make money again - and soon! - and is likely constrained in working capital financing.
It is great to note that share price wise and for the past 12 months, TTJ has out-performed STI by over 20%, and by some 50% against Yongnam…..
https://sg.finance.yahoo.com/q/bc?s=K1Q....I%2C%5ESTI
So indeed it is true that small is beautiful, and that good execution and financial prudence matter more than size and aggressive bidding for big projects.
I look forward to the coming FY14 (ended 31Jul14) full-year result which should be released by 30Sep14...
(07-08-2014, 09:50 AM)dydx Wrote: [ -> ]With arch rival Yongnam saddled with so much debts, under-utilised steel struts in the short-term, and some loss-making projects mainly due to aggressive bidding in the recent past years, the competitive landscape in the short-term could well be tilting to TTJ's favour. For sure, Yongnam now can no longer afford to bid at low prices and on all big projects, as the company needs to show that it can make money again - and soon! - and is likely constrained in working capital financing.
It is great to note that share price wise and for the past 12 months, TTJ has out-performed STI by over 20%, and by some 50% against Yongnam…..
https://sg.finance.yahoo.com/q/bc?s=K1Q....I%2C%5ESTI
So indeed it is true that small is beautiful, and that good execution and financial prudence matter more than size and aggressive bidding for big projects.
I look forward to the coming FY14 (ended 31Jul14) full-year result which should be released by 30Sep14...
In hindsight, their decision to venture into dormitory business is a sound one. That provides consistently good earnings and cashflow.
Even during the over competitive biddings by Yongnam (which eventually lead to cost overrun), TTJ margin remains decently good.
With the dormitory expected to be expired in another 2-3 years.
Perhaps it is timely that the core biz get back in favours.
While Yongnam's Press Release view its balance sheet as below:
"Nonetheless, net gearing remained at a healthy level of 0.59 times as at June 30, 2014"
If 0.59 is healthy, I have no idea how to term TTJ's Net Cash and rock solid Balance sheet.
Both TTJ and Yongnam are in a sweet spot given the massive number of structural works required by the SG govt to ramp up its infrastructure. [Edited by moderator]
The govt is building MRT lines in rapid successions, DTL Line, Thomson Line, CCL stage 6 etc; with more lines expected to be announced. Majority of Works for Thomson Line is expected to start in 2015, CCL stage 6 is likely 2016. LTA is going to tunnel the North-South Expressway with works commencing in 2015. On the Community front, the People's association (PA) is now developing integrated complexes across Singapore (Tampines, Paya Lebar and Bedok). All these point to the sustainability of revenue for Yongnam and TTJ, the aim for these 2 companies is to translate it to profits by bidding conservatively. Further additions; from wikipedia, it is mentioned the ERL line will be announced in 2014. Assuming MOT/MOL announces the gazette of ERL in 2014, the possession of land from stat boards and private owners, needed for the construction, is likely to complete in 2016 (2 years period). Following which LTA/contractors will enter site from the date of possession to commence works.
For an individual with limited cash, the choice is down to which Company is better managed and has a stronger asset base. As dydx has pointed out (and which I agree), TTJ seems to be the better choice. So how is TTJ's valuation?
Assuming constant profits and extrapolating TTJ's 9M2014 results (basing on the assumption TTJ benefits from the numerous govt projects available above), TTJ will earn 0.0615 EPS. Its FCF per share is 0.0615. What this means is that TTJ is trading at 5.7x P/E and P/FCF. Quite a good number in my view.
<vested in TTJ yesterday>
Hi CY09,
On this "it is worth noting they are the only two S1 accredited companies", may I know where can we find this point?
From SSSS link here:
http://ssss.org.sg/index.php?option=com_...&Itemid=66
It seems there are quite a bit of S1 graded company there.
Thanks!