Singapore Crane Companies - Construction Boom Tag

[orangetea]

I observed that crane companies shares have fallen quite a bit for all three
a. Tiong Woon
b. Tat Hong
c. Sin Heng

So i was exploring if it is still worth exploring them especially since the crane market demand is still tight going forward when Singapore expands.

Attached share price comparison and their financial data.
(data source ft.com)

[Layman A]

Sorry to pour cold water here.

The chances of the share price of the 3 crane companies to return to their golden era in 2007 is very very slim.

Reasons ?

1. Construction companies were forced to pay sky high rentals (amounting to ransom) to the 3 crane companies during 2007 when the demand for crane was so terribly tight.
( I remember whenever I drove pass the Marina Bay Construction site, I saw hundreds and hundreds of cranes in operation.
Double that amount for the RWS construction sites that run concurrently then. )
I believe the construction companies have learned their valuable lessons and will definitely has some backup cranes of their own in case situation gets tight again.


2. Crane companies in 2007, blinded by the windfall profits, get greedy, and thus order a lot more cranes than needed, hoping to earn even more profits.
When demand suddenly disappeared in 2009, they are caught with the pants down.

Just my humble layman opinion.

[orangetea]

Its always good for discussion.

Substantial shareholder comparison
Tat Hong: Family held
Tiong Woon: Family held
Sin Heng: Family held + institution (Toyota @ $0.20 as at 19 Aug 2013)

I weigh this comparison as a 'potential' to reward common shareholders, though it is non-guaranteed.

[GreedandFear]

Its always good for discussion.

Substantial shareholder comparison
Tat Hong: Family held
Tiong Woon: Family held
Sin Heng: Family held + institution (Toyota @ $0.20 as at 19 Aug 2013)

I weigh this comparison as a 'potential' to reward common shareholders, though it is non-guaranteed.

One point to consider is that these crane companies operate Asia wide (and in the case of Tiong Woon also in the Middle East) with Singapore not being the dominant market. Also, Sing Heng and Tiong Woon have a large part of their business in the marine and petrochemical sectors, so infrastructure / housing construction are not perfectly correlated with those two companies. I do think that there is significant demand for infrastructure developments (Asia wide) so, long term, these companies will should do well. However, Tat Hong is really suffering from the Australian economic / mining slow down given its large exposure to that market.

Vested in all three.