No doubt the dwindling order book is a problem. Given TTJ's structural steel segment contributes 115M annually. Moving forward, I do expect TTJ's order book to increase, but its margin for the project may decrease as Yongnam has less projects on its hand unlike next FY, thus competition for bidding will start.
Why am I optimistic TTJ can sustain or very likely to increase its order book? This is mainly due to the public service projects that continue to flow out and require S1 expertise in structural steel engineering. In 2016/2017, we are likely to see a few of such projects: 1) DTL Stage 3 (at Pearl Centre where the soil condition and old buildings are a challenge), 2) Thomson East Line (a few station areas), 3) The biggest underground depot at Tanah Merah. Of course, there will be less prominent projects which will keep TTJ busy. To summarize, TTJ is a proxy to the infrastructure boom our country is undergoing.
Follow up from PhilipCapital after analyst briefing:
http://www.remisiers.org/cms_images/rese...g_Note.pdf
...
Management provided a list of potential projects in Singapore and Malaysia, and commented that they are actively bidding
for projects. They are particularly keen on securing the contract relating to the development of Petronas' Refinery and
Petrochemical Integrated Development in Pengerang, Malaysia.
TTJ's Terusan Lodge I dormitory operates on the 3+3+3 years lease structure. The third term was renewed in January 2014
and expires in January 2017.
http://infopub.sgx.com/FileOpen/TTJ%20$22m%20new%20contracts%2020%20Oct%202014.ashx?App=Announcement&FileID=318883
PRESS RELEASE
Structural steel specialist T T J secures $22 million worth of public
sector projects for Tampines Town Hub and Fixed Gangways for
Changi Airport T1 and T2
SINGAPORE – 20 October 2014 – T T J Holdings Limited (“T T J” or together with its
subsidiaries, the “Group”) announced today that it has secured several contracts worth $22
million to supply structural steelworks for Changi Airport Terminals 1 and 2, Tampines Town Hub
as well as civil defence shelter doors. With the addition of these new projects, T T J’s order book
gets lifted to $119 million to date.
For the Changi Airport project, the Group has been awarded the contract to fabricate and install
structural steelworks for the fixed gangways at Terminals 1 and 2.
As for the Tampines Town Hub project which comprises combined recreational, sporting,
community and culture facilities under one roof, the Group will be involved in the supply and
installation of structural steelworks for its building construction. The construction period of the
Tampines Town Hub is scheduled to be completed in phases from 2016.
Said T T J’s Chairman and Managing Director, Mr Teo Hock Chwee (张福水): “We are happy to
have secured these significant projects which underscore the fact that demands for T T J’s products
and services remain firm in the public sector where ample opportunities are still expected and we
will continue to pursue in this direction.”
...
It is quite clear that TTJ is always very careful in choosing its structural steel fabrication and installation projects, having a preference for projects backed by very high-quality sponsors and which are within its technical capabilities and financial capacity. I suppose this explains TTJ's steady financial performance over the years. Accordingly, TTJ's share price has also performed very well over the years…..
https://sg.finance.yahoo.com/q/bc?s=K1Q....I%2C%5ESTI
It is heartening to note that over the last 2 years alone (since Oct12), TTJ's share price has out-performed the STI by some 60%, and also out-performed its archival Yongnam by over 80%.
(23-10-2014, 08:21 PM)dydx Wrote: [ -> ]TTJ bought back 300,000 shares from the open-market today (23Oct14) and paid a high $0.36 a share…..
http://infopub.sgx.com/Apps?A=COW_CorpAn...EjxNN4WGlI
Would $0.36 become the base share price going forward?
This is a surprise to me. I hope it is not for the purpose of delisting.
Accordingly to AR2013, only got 16.7% free float. Means just to need buy back 26 mil shares from minorities and will hit 10% public float rule.
(23-10-2014, 10:03 PM)smallcaps Wrote: [ -> ] (23-10-2014, 08:21 PM)dydx Wrote: [ -> ]TTJ bought back 300,000 shares from the open-market today (23Oct14) and paid a high $0.36 a share…..
http://infopub.sgx.com/Apps?A=COW_CorpAn...EjxNN4WGlI
Would $0.36 become the base share price going forward?
This is a surprise to me. I hope it is not for the purpose of delisting.
Accordingly to AR2013, only got 16.7% free float. Means just to need buy back 26 mil shares from minorities and will hit 10% public float rule.
Regardless of whether delisting is on the cards, 36cts is a very good price point for buy back. After all, NTA is 34cts. EPS 6.2cts, ROE 18%. Paying 1x book to buy a 18% ROE biz is a steal.
Mr Market is valuing TTJ as such perhaps due to the worry of its dorm biz not being renewed in Jan 2017. Let's examine the probability of that.
(1) Authorities decides to discontinue Terusan Lodge site for dorm
- Low Chance. They announced in May that one of the 4 new recreation center to be built for foreign workers would be at Jalan Terusan. (google shows it is next street away from Terusan Lodge's Jalan Papan)
https://www.reach.gov.sg/YourSay/Discuss...5258%5D%5D
(2) Terusan Lodge continues but not awarded to TTJ - Low Chance (assume TTJ runs the dorm well). If award to another party, TTJ would need to tear down the site and returns it bare. New company would take minimum 6 mths to build another dorm. So where do the workers go in the meantime?
Most likely scenario is Terusan Lodge gets re-awarded to TTJ but at higher rental. Margin may compress but considering depreciation for the dorm will be fully depreciated by Jan 2017, hopefully depreciation expense can "offset" rental increase? Depreciation for the dorm is at $2.4m, a considerable amount.
I hope TTJ is keeping its cash pile for that "big" project. Else, pls keep the buyback coming
On TTJ's profitable dormitory Terusan Lodge (located at Jalan Papan, Jurong), while there is no detailed cost breakdown available, by way of estimate we know the SG government takes in quite a few million dollars from it every year by way of fixed ground rent, possibly other levies, and income tax. So adding the levies on foreign workers by MOM, having large numbers of foreign workers in Singapore is indeed a very profitable business for SG government.
Unless the site has an alternative redevelopment plan, or the dormitory is at a hopeless state, the most likely scenario is that TTJ as the current owner-operator of the 5,300-bed dormitory will get an extension from BCA likely at a higher ground rent which is acceptable to TTJ. If BCA chooses to put the site up for tender, and TTJ fails in its bid, then TTJ can choose to tear down the mostly low-cost structural steel buildings - fully depreciated by then - and returns the site bare to BCA, or the successful bidder may well offer a fair price to TTJ to keep the buildings there in order to save on their own construction costs and down time.
Just finished reading the areport...quite a bullish sannual reportEnding with 'see you at the agm!!!'. Who is going.g
Posted a link to their annual report here:
http://infopub.sgx.com/FileOpen/TTJ%20Ho...leID=24727
I am sorry if this is disallowed. Noticed the AGM venue is at wilkie edge which is the address of their auditors, RSM Chio Lim
Is it allowable?
Results not bad, profits consistent and rising and with more infrastructure like the new airport terminal, more jobs up for grab