With due respect to RSM, noted TTJ audited by RSM and not Big 4!
Btw have the year end results being announced and audit report out?
general offer may or may not take place at 29 cents. i don't think we can be so certain about that. i won't venture to read into the minds of the majority shareholders to guess at which price. but in general most owners will want to privatise at a premium to market price, so that there is good will among market participants for subsequent listings. Empircally you can find that to be the case as well.
also, if privatisation plans were near and the majority shareholder do intend to delist cheaply, it makes no sense to give out a bumper crop of dividends. so whatever privatisation plans will really be in the med to long term. note I am not precluding a GO. I am saying that an oppressive GO offer, ones that minority shareholders lose out is high unlikely because a bumper crop of dividends could very well throw a spanner in those plans.
i am sure some of the detractors here are well aware of these logic, they themselves have use similar logic on other companies. so i am skeptical at what their intentions could be.
ttj has always been undervalued. with net cash forming a large portion of the company. but it is not correct to say that the value of the company remains unchanged with the 8 cents dividends. by signalling that the management is willing to share the cash with investors, we as investors will take a much lower discount on the cash that they hold.
re rating definitely has not happened. in fact the share price has not even reflected the full 8 cents dividend. Its as if the market is saying that they had expected 4 cents dividend, so the market only factors in the surprise additional 4 cents. Which is probably not true.
the only reason ttj has not gone up more and even rerated is poor market sentiments.
as mentioned, very insignificant holdings. but really just trying to point out that some participants have their own motives for putting forward a particular view point.
GO at such a low price???
CEO was so nice to signal to everyone when he bought the shares ONCE only, before giving out the dividend. Share buyback also used sparingly like when the main con up lorry. Unlikely to happen, IMO. Unlikely to succeed also...
(25-09-2015, 06:11 PM)BlueKelah Wrote: [ -> ]CF thanks for the valuation with the PBT. However there is likely a cyclical component to go with TTJ's steel biz as they do depend on some cyclical sectors for business and which will render the historical 5 year PBT inaccurate. I am pretty sure these sectors are not showing uptrend, with the shrinking revenue stream we are seeing.
With small caps without a moat, stability of earnings in sector downturn is also not guaranteed. And for those chasing growth pretty much non-existent for this local based co.
from what I have seen on this thread, order book only increased to 122mio this quarter? if that is so then with SG property/economy downturn coming, could TTJ end up with an revenue of only ~60mio+ a year? translating to only ~1.5-2c EPS a year?
One of the differences, among us, is you always has top-down view, while I prefer to do the bottom-up. IMO, TTJ biz model has a moat, albeit a small-cap company. Based on BCA estimation, construction value still substantial in the next few years. There are also gov infrastructure project, includes MRTs. I am confidence, TTJ is able to capture sufficient contract, to remain profitable, and continue to generate cash flow.
(25-09-2015, 06:11 PM)BlueKelah Wrote: [ -> ]The only likely catalyst for this stock given its low float(top 20 own 91.5%) is a privatisation, in which case would happen at ~29c, factoring the div hit to NAV. This is a very big risk. If share price drifts downwards in the next few years, those buying today or even after XD run the risk of a G.O. at depressed prices..
Pretty fairly valued now, CF u must think its another "wonderful" company 
Privatization with a depressed price, is a valid concern. IMO, the risk remains low, with the track record of the management.
Yes, it is a "wonderful" little company, but not a core holding due to its liquidity. It is unlike Penguin, with free-float of 74%.
Agreed on the cyclical nature of TTJ's structural steel biz. However, i will not say it is a coy without moat. After all, TTJ is "accredited with the S1 grading, the highest grading by the Singapore Structural Steel Society, and one of only two such companies with design and fabrication facilities in Singapore." -> From TTJ's corporate profile. TTJ will be well positioned in terms of b/s if downturn comes.
IMO, one of the the important factors of staying alive in this business is to bid projects selectively and control its costs carefully so as to prevent any cost overruns.
(not vested)
"as paying out the dividend doesn't change the actual value of the company. It's not as if 8c was created out of thin air - it still comes out of the company coffers."
This statement is true indeed; no actual value is created.
However to shareholders there is another perspective to consider. As the saying goes " A bird in hand is worth two in the bush". Now that 8 cents of dividends is coming back to shareholders instead of the usual 1.4 cents, am up ward re-rating will occur. This is because the dividends are going into our pockets and not stuck as cash sitting on the balance sheet (think Singholdings which refuses to grant special dividends despite hoards of cash and lack of new projects).
"Gonna be lean times ahead for this company as well after the past few boom years."
This statement is subjective. In my opnion,TTJ has been going through lean times over the past few quarters, a rebound is likely to happen. The private sector is definitely slowing but not the government as infrastructure is sorely lacking (this is where TTJ can secure contracts)
The govt is likely to commence on a tremendous no of infrastructural projects. The contract for constructing North-South Expressway (longer than MCE) will be announced next year. The biggest underground depot in Tanah Merah will commence construction towards the later part of 2016/2017 and the underground Thomson East Coast Line. Following the Transport master plan online, the Jurong regional line will start in a few years time. There is a realignment of the AYE which may occur at Jurong Lake
Add to the fact, the government has only started to build integrated hubs, TTJ is bound to see stronger times (TTJ was one of the sub contractor for Tampines Hub, the first integrated community hubs). Bedok, Geylang Serai are the next ones and there is likely to be 5 more (East Coast area has plans for one). I believe TTJ will win some of these projects while being selective in margins
agreed!
TTJ will benefit from Singapore Gov's Infrastructure Push to stimulate the slowing GDP... !
(25-09-2015, 09:40 PM)CY09 Wrote: [ -> ]"as paying out the dividend doesn't change the actual value of the company. It's not as if 8c was created out of thin air - it still comes out of the company coffers."
This statement is true indeed; no actual value is created.
However to shareholders there is another perspective to consider. As the saying goes " A bird in hand is worth two in the bush". Now that 8 cents of dividends is coming back to shareholders instead of the usual 1.4 cents, am up ward re-rating will occur. This is because the dividends are going into our pockets and not stuck as cash sitting on the balance sheet (think Singholdings which refuses to grant special dividends despite hoards of cash and lack of new projects).
"Gonna be lean times ahead for this company as well after the past few boom years."
This statement is subjective. In my opnion,TTJ has been going through lean times over the past few quarters, a rebound is likely to happen. The private sector is definitely slowing but not the government as infrastructure is sorely lacking (this is where TTJ can secure contracts)
The govt is likely to commence on a tremendous no of infrastructural projects. The contract for constructing North-South Expressway (longer than MCE) will be announced next year. The biggest underground depot in Tanah Merah will commence construction towards the later part of 2016/2017 and the underground Thomson East Coast Line. Following the Transport master plan online, the Jurong regional line will start in a few years time. There is a realignment of the AYE which may occur at Jurong Lake
Add to the fact, the government has only started to build integrated hubs, TTJ is bound to see stronger times (TTJ was one of the sub contractor for Tampines Hub, the first integrated community hubs). Bedok, Geylang Serai are the next ones and there is likely to be 5 more (East Coast area has plans for one). I believe TTJ will win some of these projects while being selective in margins
Could be the reason why the 8 cents is ordinary and not special dividend? The board should be very aware what kind of signal they are sending when decided that its not a special dividend.
Hope its true, that they see an up-cycle coming.
Also wonder wat TH Investments plan to do with their 15% shares...