Thursday, October 10, 2013

TAT HONG : WEAKNESS ALREADY PRICED IN (OCBC)

TAT HONG
Fair value S$0.96
add: 12m dividend forecast S$0.04
versus: Current price S$0.93

WEAKNESS ALREADY PRICED IN
• Better clarity on FY14/15 outlook
• Aussie operations to remain weak
• But other markets provide stability

Upgrade to HOLD
Following our recent discussion with Tat Hong’s management,
we are upgrading Tat Hong to HOLD and raise our valuation peg to 11x (previously 9x) and fair value estimate to S$0.96 (previously S$0.80). We feel that the stock has bottomed since the sell-off after its disappointing 1Q14 results, and that the street has adequately priced in its expectations for a weakened performance for the remainder of FY14.

FY14 likely to see drag from Aussie performance
As a recap, Tat Hong’s 1Q14 results suffered mainly from a decline in its Australian operations, which management attributed to i) election uncertainty, ii) slow down in general construction projects, and iii) temporary relocation of its cranes between projects. While the new Coalition government has promised to accelerate infrastructure spending to boost mining investment and increase internal connectivity (i.e. high speed rail), timing of the execution is still unknown and there also remains a time lag to convert improvement in business confidence into actual spending. That said, Tat Hong’s performance is likely to stay weak for the remainder of FY14, and a pickup in Australian operations should come by early FY15 instead.

Other markets remain stable
The performances of its other markets – Southeast Asia and Hong Kong – should remain stable in FY14 and provide some cushion for the group. In addition, preliminary assessments for construction expenditure in China indicate an increase in spending of between 8- 9% for 2014 through to 2017, which will help address concerns over a possible slowdown in the world’s second largest economy. Tat Hong continues to enjoy fairly high utilization rates of about 80% and longer lease terms for its tower cranes in China, and this relative stability will also help offset some of the weakness from its Australian business.



Source/Extract/Excerpts/来源/转贴/摘录: OCBC-Research,
Publish date: 08/10/13

No comments:

Post a Comment

Warren E. Buffett(沃伦•巴菲特)
Be fearful when others are greedy, and be greedy when others are fearful
别人贪婪时我恐惧, 别人恐惧时我贪婪
投资只需学好两门课: 一,是如何给企业估值,二,是如何看待股市波动
吉姆·罗杰斯(Jim Rogers)
“错过时机”胜于“搞错对象”:不会全军覆没!”
做自己熟悉的事,等到发现大好机会才投钱下去

乔治·索罗斯(George Soros)

“犯错误并没有什么好羞耻的,只有知错不改才是耻辱。”

如果操作过量,即使对市场判断正确,仍会一败涂地。

李驰(中国巴菲特)
高估期间, 卖对, 不卖也对, 买是错的。
低估期间, 买对, 不买也是对, 卖是错的。

Tan Teng Boo


There’s no such thing as defensive stocks.Every stock can be defensive depending on what price you pay for it and what value you get,
冷眼(冯时能)投资概念
“买股票就是买公司的股份,买股份就是与陌生人合股做生意”。
合股做生意,则公司股份的业绩高于一切,而股票的价值决定于盈利。
价值是本,价格是末,故公司比股市重要百倍。
曹仁超-香港股神/港股明灯
1.有智慧,不如趁势
2.止损不止盈
成功者所以成功,是因为不怕失败!失败者所以失败,是失败后不再尝试!
曾淵滄-散户明灯
每逢灾难就是机会,而是在灾难发生时贱价买股票,然后放在一边,耐性地等灾难结束
  • Selected Indexes 52 week range

  • Margin of Safety

    Investment Clock

    World's First Interactive Investment Clock