Release of the financial statement for Q3.
http://infopub.sgx.com/FileOpen/TTJ%20Q3...eID=355198
Revenue dropped 56% YoY from S$33.9 million to S$14.8 million, while profit net of tax dropped 74% YoY from S$6.2 million to S$1.6 million,largely due to the lower book order.
Cash and cash equivalent now sits at S$80.5 millions.
NAV stands at 35.22,and T T J is now trading below book value.
It might be a good opportunity to accumulate while the price drops for those who have faith in the business,especially with the upcoming projects at Thomson Line and Jurong Island for the coming years.
"As at 8 June 2015, T T J’s projects order book stood at $106 million which it expects to substantially
complete between FY2015 and FY2017. This includes new contracts secured amounting to $35 million
for the provision of structural steel works for projects on Jurong Island and civil defence doors for
Thomson Line, which the Group announced on 28 May 2015. To date, the Group continues to experience a
healthy level of enquiries for a mix of public and private sector projects. Going forward, the Group will
continue to monitor its costs closely and enhance productivity to remain competitive. "
Q3 result just out...
http://infopub.sgx.com/FileOpen/TTJ%20Q3...eID=355198
From the explanations in section 8 of the announcement, while revenue and profits from the dormitory business - details not disclosed - continued to increase in Q3, lower-than-expected revenue from the structural steel business - which I estimate at approx. $9.0m in Q3 - very likely also had a negative contribution to group PBT, which came to only $2.08m. Is there a cause for concern?
To pacify any fear, TTJ on 28May15 announced having secured another $35.0m in new structural steel contracts, which have raised the latest projects order book as at 8Jun15 to $106.0m, to be substantially completed between FY2015 (ending 31Jul15) and FY2017. Also, net cash reserve balance as at 30Apr15 had risen to a new record high of $80.5m - equivalent to $0.23/share, based on the latest 349.5m outstanding issued shares. To me, this latest huge net cash balance is suggesting that a big final dividend could be coming when TTJ announces its FY2015 full-year result in Sep15.
(08-06-2015, 08:40 PM)bear Wrote: [ -> ]Release of the financial statement for Q3.
http://infopub.sgx.com/FileOpen/TTJ%20Q3...eID=355198
Revenue dropped 56% YoY from S$33.9 million to S$14.8 million, while profit net of tax dropped 74% YoY from S$6.2 million to S$1.6 million,largely due to the lower book order.
Cash and cash equivalent now sits at S$80.5 millions.
NAV stands at 35.22,and T T J is now trading below book value.
It might be a good opportunity to accumulate while the price drops for those who have faith in the business,especially with the upcoming projects at Thomson Line and Jurong Island for the coming years.
"As at 8 June 2015, T T J’s projects order book stood at $106 million which it expects to substantially
complete between FY2015 and FY2017. This includes new contracts secured amounting to $35 million
for the provision of structural steel works for projects on Jurong Island and civil defence doors for
Thomson Line, which the Group announced on 28 May 2015. To date, the Group continues to experience a
healthy level of enquiries for a mix of public and private sector projects. Going forward, the Group will
continue to monitor its costs closely and enhance productivity to remain competitive. "
106m over 2.5 years is about 42m+ a year? Gov project also very thin margins rite.
Private sector work will be harder to come by given poor sentiment of SG property market.
Would only bite if they decide to increase their div payout.
I don't think TTJ will give a bumper dividend but maintain the 1.4 cents dividend. This is because once business picks up again, it will use up about 15M of cash as working capital changes and trade receivables will accrue (customers don't immediately pay for work done). Secondly, TTJ is likely to maintain a healthy buffer of cash on top of WC changes. So don't expect much as 1.4 cents per share is a draw down of 5M cash.
Secondly, tracking its order book, one will notice the decline of order book across each quarter is much less than the revenue recognized for that quarter. For example Q1FY15 orderbook was $99M , but in Q2FY15, the order book was $78M with a reported revenue of $27.4M. This is because there are other factors such as the dormitory business. * Q4FY14 reported orderbook of 97M, in Q1FY15, revenue was recognized was 24.7M. It indicates the winning of some orders.
IMO, it is likely TTJ will recognize revenue of approximately 60M (dormitory)+ 106M (current orderbook) + 100M (new order) over the next 2.5 years.
<vested>
Dividends (FY10 to FY14)
1.4 mil
2.1 mil
2.8 mil
3.148 mil
4.897 mil
Dividend CAGR = 37%
Net Cash (FY10 to FY14)
1.8 mil
22.3 mil
21 mil
34.5 mil
57.4 mil
Net Cash CAGR = 138%
---
IMHO, its not that management not willing to increase dividend… juz that cash generation simply too strong.
Revenue back in FY10 was 70 mil, with 6.8 mil net profit on equity of 60 mil, and with an order book of 110 mil.
With Q315 result, equity stands at 123 mil but net cash is now 80 mil.
Assuming 60 mil cash is ‘dispensable’ and 10 mil net profit for FY15, that still gives a respectable 15.9% return on equity less ‘dispensable’ cash.
The only problem I have with the company is that half their profit comes from the dorm business, which is going to end in 2017. They are milking the cow in the last squeeze.
Without dormitory, do you still think their core business attractive at this value?
Even if they continue the business with a renewed lease, the return can't be so high anymore, "thanks" to BCA's hike in land lease.
(08-06-2015, 11:48 PM)smallcaps Wrote: [ -> ]Dividends (FY10 to FY14)
1.4 mil
2.1 mil
2.8 mil
3.148 mil
4.897 mil
Dividend CAGR = 37%
Net Cash (FY10 to FY14)
1.8 mil
22.3 mil
21 mil
34.5 mil
57.4 mil
Net Cash CAGR = 138%
---
IMHO, its not that management not willing to increase dividend… juz that cash generation simply too strong.
Revenue back in FY10 was 70 mil, with 6.8 mil net profit on equity of 60 mil, and with an order book of 110 mil.
With Q315 result, equity stands at 123 mil but net cash is now 80 mil.
Assuming 60 mil cash is ‘dispensable’ and 10 mil net profit for FY15, that still gives a respectable 15.9% return on equity less ‘dispensable’ cash.
Take NSL for example, once "a while", it hits you with generous special dividend, is a rewarding for shareholders' loyalty.
If TTJ can't get into another new dormitory project at a good/fair cost of entry - which is crucial in order to assure a decent/acceptable return over its life time - I think it is reasonable and conceivable that the company would return a big portion of the excess capital and net cash reserve accumulated from profits over the last few years to shareholders, by way of a nice special dividend. There should another nice special dividend payout from the further excess cash to be accumulated from the existing dormitory after the its land lease ends in 2017.
At that point, if Mr Teo thinks that the competition and margin in the structural steel business become untenable, conceivably TTJ could still consider selling its 2 prized factories in Jurong and Johore to the highest bidder, and distribute the proceeds as another round of special dividend to shareholders, before selling the company as a shelf.
One thing is quite certain, Mr Teo as the founder and largest shareholder does not have a habit in making rash and damaging business investment and financial decisions.
(09-06-2015, 05:47 PM)dydx Wrote: [ -> ]If TTJ can't get into another new dormitory project at a good/fair cost of entry - which is crucial in order to assure a decent/acceptable return over its life time - I think it is reasonable and conceivable that the company would return a big portion of the excess capital and net cash reserve accumulated from profits over the last few years to shareholders, by way of a nice special dividend. There should another nice special dividend payout from the further excess cash to be accumulated from the existing dormitory after the its land lease ends in 2017.
At that point, if Mr Teo thinks that the competition and margin in the structural steel business become untenable, conceivably TTJ could still consider selling its 2 prized factories in Jurong and Johore to the highest bidder, and distribute the proceeds as another round of special dividend to shareholders, before selling the company as a shelf.
One thing is quite certain, Mr Teo as the founder and largest shareholder does not have a habit in making rash and damaging business investment and financial decisions.
Thats probably why some investors have taken profits and divested after the run up above its nav of 35.
If have to wait another 2 years for a special payout, might as well keep cash until 2017 before buying in.
just like many property developers that have profited from the past few years boom, it looks like lean years ahead for the property sector in sg, so should be some lean years ahead for ttj.
At current prices stock looks fairly valued, no MOS, probably can consider buying if it goes below around 28c
sent from my Galaxy Tab S
My own opinion is that if the dorm business do come to an end, resulting in the company bursting with cash, it isn't really that bad a situation if the management is shareholder friendly.
If this is a business with predictable high return over the long term, we would probably be looking at x times of earnings and not the current underwater(book) price.
(09-06-2015, 05:01 PM)artreal Wrote: [ -> ]The only problem I have with the company is that half their profit comes from the dorm business, which is going to end in 2017. They are milking the cow in the last squeeze.
Without dormitory, do you still think their core business attractive at this value? Even if they continue the business with a renewed lease, the return can't be so high anymore, "thanks" to BCA's hike in land lease.
(08-06-2015, 11:48 PM)smallcaps Wrote: [ -> ]Dividends (FY10 to FY14)
1.4 mil
2.1 mil
2.8 mil
3.148 mil
4.897 mil
Dividend CAGR = 37%
Net Cash (FY10 to FY14)
1.8 mil
22.3 mil
21 mil
34.5 mil
57.4 mil
Net Cash CAGR = 138%
---
IMHO, its not that management not willing to increase dividend… juz that cash generation simply too strong.
Revenue back in FY10 was 70 mil, with 6.8 mil net profit on equity of 60 mil, and with an order book of 110 mil.
With Q315 result, equity stands at 123 mil but net cash is now 80 mil.
Assuming 60 mil cash is ‘dispensable’ and 10 mil net profit for FY15, that still gives a respectable 15.9% return on equity less ‘dispensable’ cash.