With the company earning free cash flow ranging from 6-8 cents and dividends of about 1-2 cents given (this year 8 cents); I have no qualms in holding this company over the long run.
Industry wise, the company is a sweet spot due to increased infrastructural spending by the govt.
Given how "short fused" I am from turning bear to bull vice versa, my continuous holding of this company without complaining of their actions shows how much respect I have for the current mgmt and their treatment to OPMI.
(19-03-2016, 11:39 PM)smallcaps Wrote: [ -> ] (19-03-2016, 11:14 AM)Hayden Wrote: [ -> ]...
- ...
- Re Gzbel on PE ratio. The funny thing about PE ratio is that the valuation get distorted with unusual high net cash or net debt. EV to EBITDA or EV to FCF would be a better option to evaluate TTJ. Let's see how high net cash distort market perceived valuation. TTJ $0.29 market price is made up of underlying valuation $0.12 and floor price $0.17 (net cash). If today, the management chose to return half the net cash $0.085 and assuming the market price rise in accordance to this dividend and subsequently falls back to $0.29 market price (similar scenario took place during the 8c dividend payout period though recurrence not guaranteed), the new component is now made up of $0.205 and $0.085 (net cash). Excluding earnings from dorm business, average EPS is about $0.03 in accordance with Gzbel's calculation. The market perceived PE ratio remain unchanged at 9.67x, but the underlying valuation has increased from 4x to 6.8x. Of course such scenario is not guaranteed but I am just trying to show how misleading PE ratio is.
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IMO, EV can be misleading too (a.k.a Value Trap).
Maybe sometime like this would be better for investors like us who can't buy the whole company outright:
MEV (Minority Enterprise Value) = EV + (Cash that would probably be hoarded forever or simply lost somehow)
Luckily things seems to be in our favor from the recent events that can be observed...
Yeah. Value trap would be everyone main concern. and hopefully "Cash that would probably be hoarded forever or simply lost somehow" don't ever materialize.
IMO, I choose to believe that as long as a company can remain profitable for a long period of time, ie. at least a cycle of expansion and recession, and management continue to allocate capital rationally either with dividends or share buyback, the company will eventually be noticed and "hopefully" warrant a re-rating.
An example is Vicom which is also illiquid, has been profitable in a dull and little growth industry, and started off as small cap.
EV to FCF in FY2003 was in 7x range, FY2004 to 2007 was in 10x range, FY2008/09 was as low as 6x, and recent years an upward re-rating in 14x range.
(vested)
(19-03-2016, 08:47 PM)dydx Wrote: [ -> ]TTJ has paid a final dividend every year since listing on SGX. Assuming continued profitability in the group's 2 well-established businesses - structural steel and dormitory - it is reasonable to believe that such dividend payments will continue. Since Chairman/MD Teo used all of the funds from last FY's $0.08/share jumbo dividend to buy up TTJ shares, I guess there is a high possibility that another big final dividend for this FY16 (ending 31Jul16) could be made.
I doubt very much Chairman/MD Teo is about to retire soon, as he appears to be in good health. Therefore, it is reasonable to expect him to manage TTJ's businesses as well as before, and he may even add to them new related and profitable activities.
Yes he does seem to be quite interested in F&B businesses... maybe form a new subsidiary called TTJ Foodview? [emoji1]
(25-03-2016, 08:51 PM)butcher Wrote: [ -> ]No longer privatisation?
With the increase in deemed interest, seems dividends more probable? Especially if dorm lease does not get extended. Otherwise might as well use the dividends to pay up any loans used for his personal investments. Maybe he sees potential in the sin ming area with the upcoming mrt stations in a few years? Never say never though... since a privatisation attempt would probably succeed IMO
ya, looks like it, if by June 2016, dorm lease does not get extended, maybe go for a major final dividend payout and delist it once and for all..
if dorm lease extended, could also delist!
(27-03-2016, 02:50 PM)dydx Wrote: [ -> ]I think TTJ, with its proven structural steel and design capabilities, and with a huge yard facility in low-cost Johore, is well placed to branch out into the PPVC (Prefabricated Pre-finished Volumetric Construction) construction method, which is being actively promoted by BCA/URA and SG Government and will likely be made mandatory in certain property projects in the future.
More info on PPVC.....
http://www.channelnewsasia.com/news/busi...02656.html
http://www.bca.gov.sg/BuildableDesign/ppvc.html
https://www.ura.gov.sg/uol/media-room/ne...4-67b.ashx
I reckon, the PPVC, is less applicable for steel structure. Steel structure is less standardized, and difficult to achieve the volume needed. I do know, TTJ has pre-fabricated modular steel structure, and ship to site for assembly for higher productivity, but not at similar scale as the other PPVC projects.
(vested)
wonder how the lease extension of the domintory biz coming along?
It's May 2016 already, figure TTJ has to start asking BCA for it...
TTJ's 5,300-bed "Terusan Lodge 1" leasehold (expiring Jan2017) workers' dormitory property located at 5A Jalan Papan in Jurong, is listed in Appendix 2 of the report under the "TEMPORARY DORMITORIES" category. Based on TTJ's latest AR, this investment property was carried in the 31Jul11 B/S at a NBV of $13.365m.