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PR Newswire
09-11-2012, 01:52 PM
Overall Q1 result is positive, though there are some areas of concern too.
Concerns
Cable and wire segment, the bulk of the company business, is slowing down. Sales dropped by 5% compared to Q1’12, and if compared to Q4’12, the reduction is even more significant. The reason given is because of a drop in copper prices, and not quantity, which I take it to mean that demand for wire and cable is still robust.
Cast lab contributed $6.98 million of revenue in the quarter. Take note that Cast Lab was acquired on 31 Jan’ 12, and contributed $4.92M in Q3’12 and $8.01M in Q4’12, the latest quarter is showing a sequential drop in revenue. As we don’t have a long history to benchmark this quarter performance, I am reserving my comments for now and let’s see following quarters performance. However, in term of contribution to profit, this segment only contributed a mere 1% GM in FY2012. I hope Tai Sin’s management can implement some costs saving initiative in Cast Lab and improve its contributions, just like the way they run Tai Sin.
Significant reduction in profit from associate, no reason given for the drop.
Positives
Revenue stays above $70M, while lower than Q4’12, it is still higher than all the other quarters in FY10, FY11 and FY12. EMD, the second largest segment, is still showing good growth.
GM% of 19% in this quarter is impressive and higher than the average recorded for the last three FY. Given the fact that copper price has dropped, and we can assume that Tai Sin has to lower their selling price for their wires and cables, some other segments must have recorded quite significant improvement in margin. These could be from EMD or switchboards, or even from Test & Inspection. This is good news as the company is not so dependent on C&W.
Likewise, PBT % is better than the average recorded for the last three FY. This is due to stringent cost management, which we all know the Lim’s family are famous for.
EPS for this quarter is 1.1 cents, and FY13 EPS could well surplus last year 4.47 cents. It is reasonable to expect a dividend payout not less than last year, which means yield at current price is still very attractive at ~ 9%.
NAV improved to 29.69 cents versus current XD market price of about 23 cents.
Outlook
The many industrial and infrastructure projects in Singapore is positive for the company. Lately LTA has announced plan to recable MRT’s cable, I am not sure if TS can benefits from this project.
Company talks about EMD development, which could be a further catalyst moving forward.
Cast Lab performance could be a wild card too.
Concerns
Cable and wire segment, the bulk of the company business, is slowing down. Sales dropped by 5% compared to Q1’12, and if compared to Q4’12, the reduction is even more significant. The reason given is because of a drop in copper prices, and not quantity, which I take it to mean that demand for wire and cable is still robust.
Cast lab contributed $6.98 million of revenue in the quarter. Take note that Cast Lab was acquired on 31 Jan’ 12, and contributed $4.92M in Q3’12 and $8.01M in Q4’12, the latest quarter is showing a sequential drop in revenue. As we don’t have a long history to benchmark this quarter performance, I am reserving my comments for now and let’s see following quarters performance. However, in term of contribution to profit, this segment only contributed a mere 1% GM in FY2012. I hope Tai Sin’s management can implement some costs saving initiative in Cast Lab and improve its contributions, just like the way they run Tai Sin.
Significant reduction in profit from associate, no reason given for the drop.
Positives
Revenue stays above $70M, while lower than Q4’12, it is still higher than all the other quarters in FY10, FY11 and FY12. EMD, the second largest segment, is still showing good growth.
GM% of 19% in this quarter is impressive and higher than the average recorded for the last three FY. Given the fact that copper price has dropped, and we can assume that Tai Sin has to lower their selling price for their wires and cables, some other segments must have recorded quite significant improvement in margin. These could be from EMD or switchboards, or even from Test & Inspection. This is good news as the company is not so dependent on C&W.
Likewise, PBT % is better than the average recorded for the last three FY. This is due to stringent cost management, which we all know the Lim’s family are famous for.
EPS for this quarter is 1.1 cents, and FY13 EPS could well surplus last year 4.47 cents. It is reasonable to expect a dividend payout not less than last year, which means yield at current price is still very attractive at ~ 9%.
NAV improved to 29.69 cents versus current XD market price of about 23 cents.
Outlook
The many industrial and infrastructure projects in Singapore is positive for the company. Lately LTA has announced plan to recable MRT’s cable, I am not sure if TS can benefits from this project.
Company talks about EMD development, which could be a further catalyst moving forward.
Cast Lab performance could be a wild card too.