Tiong Woon Corp

Backed by Stanchart Private Equity (which has come up with a total of $105.m in capital funding, and will eventually own 31.8% in the undertaking), Tat Hong's controlling shareholder the Ng Family consortium (now holds a combined 59.74% interest in Tat Hong) through TH60 (an intermediate investment holding company of the Ng Family which will eventually own 68.2% in the undertaking), and supported by AIF Capital (an institutional fund with an existing 7.08% interest in Tat Hong) - which between them now own/control 66.82% of Tat Hong - is making a GO at $0.50/share with a view to privatise Tat Hong...
http://infopub.sgx.com/FileOpen/THSC%20I...eID=492408
When compared with Tat Hong's latest 31Dec17 NAV/share of $0.77, the stated GO launch price at $0.50/share - equivalent to 64.9% of NAV/share - appears to be another low-ball offer which may not be sufficient to do the trick.

Tiong Woon's latest 31Dec17 NAV/share stood at $1.0635...
http://infopub.sgx.com/FileOpen/TWCH-1HF...eID=488308
If Tiong Woon's controlling shareholder Ang Family - which based on the 18Sep17 Shareholders' Information in the FY17 AR now holds a combined slightly over 40% interest - were to make a similar GO with a view to privatise the company, any offer price worthy for consideration could well have to be pitched close to the $0.70/share mark.

This is a cyclical business. Can take a while to recover, but eventually it will. Buying out at a steep discount to book seems like a smart move at the expense of OPmis.

After the recent privatisation of Tat Hong by its controlling shareholder Ng Family, Tiong Woon has become the largest listed heavy lift and haulage services provider on SGX. I suppose it is useful to review Tiong Woon's latest FY18 (ended 30Jun18) AR to have a feel of this cyclical industry which should be due for a recovery hopefully in the not-too-distant future..
http://infopub.sgx.com/FileOpen/TWCH%20-...eID=529035 [Tiong Woon's FY18 AR]

Apart from its >500 cranes - the largest has a lifting capacity of 1600 tonnes - Tiong Woon has developed and owns a huge HQ facility located at 15 Pandan Crescent with its own workers dormitory, and 300,000 sq.ft. of warehousing/logistics space over 3 levels.

https://www.google.com.sg/maps/place/15+...03.7571007

The HQ facility has its own direct seafront access to facilitate easy and quick mobilisation of of its cranes and other equipment to to offshore/overseas customers (including those situated in Pulau Bukom and Jurong Island). To maximise space usage, the roof-top of the building has been designed as a parking area for cranes and haulage equipment.

(15-03-2018, 01:39 PM)dydx Wrote: Tiong Woon's latest 31Dec17 NAV/share stood at $1.0635...
http://infopub.sgx.com/FileOpen/TWCH-1HF...eID=488308
If Tiong Woon's controlling shareholder Ang Family - which based on the 18Sep17 Shareholders' Information in the FY17 AR now holds a combined slightly over 40% interest - were to make a similar GO with a view to privatise the company, any offer price worthy for consideration could well have to be pitched close to the $0.70/share mark.

With the new voluntary delisting rules, privatisation seems more unlikely .... I think I am going to be stuck with this counter for an even longer time. I think I bought around 0.70 years back. Sigh ....  

(11-07-2019, 04:01 PM)dreamybear Wrote: With the new voluntary delisting rules, privatisation seems more unlikely .... I think I am going to be stuck with this counter for an even longer time. I think I bought around 0.70 years back. Sigh ....  

A potential privatisation of Tiong Woon could be by way of a GO from an external suitor wanting to buy the entire business for market access and other strategic considerations. In which case, the price offered for each share should take reference of the NAV/share which is $1.06, plus a premium to account for goodwill in the business.

(11-07-2019, 04:01 PM)dreamybear Wrote: With the new voluntary delisting rules, privatisation seems more unlikely .... I think I am going to be stuck with this counter for an even longer time. I think I bought around 0.70 years back. Sigh ....  

Certainly, it does seem unlikely for a privatisation offer to be made. But if the Ang family does intend to do so, then it should take place during this time when its shares are cheap. But the absolute amount needed is large, and they will need financing. The consequence of this is that if they price their offer is too high, or if an O&G recovery does not materialise within the next few years, they will suffer gravely.

Considering that it is turned profitable, and does not gear too much, at a price of 30 cents, Tiong Woon looks like an acceptable side bet if you are willing to go long-term with it.

(12-07-2019, 09:15 AM)karlmarx Wrote: Considering that it is turned profitable, and does not gear too much, at a price of 30 cents, Tiong Woon looks like an acceptable side bet if you are willing to go long-term with it.

Can an acceptable side bet become a serious bet, and how long is long term? 
I ask the above because Tiong Woon has been listed since 1999, and the business actually originated in 1978, or over 40 years ago.
Tiong Woon's 1999 IPO prospectus..
https://links.sgx.com/FileOpen/Twc1-59.a...ileID=2862

Assuming that an investor started buying at the start of 2016, when TW's share price was falling on the aftermath of the oil crisis, he/she will have sat for three and a half years by now. Who knows how long more they have to wait. But as an esteemed member will say, the cure for low prices, is low prices. The low returns of the industry will drive out competition, until profits eventually return to a reasonable level. At some time, demand for lifting equipment will increase, and for TW shareholders, hopefully by then, the supply of such equipment will be reduced, therefore allowing TW to lease at high rates.

A serious bet to me means being able to place a large portion of my money into something. TW is not that kind of company/business where I feel comfortable doing so, for two main reasons.

1. TW is simply a bunch of third-party manufactured cranes, and these cranes can be easily purchased by its competitors, if they desire to. There are limited freehold industrial plots near the central part of Singapore, but there are no limits to the number of cranes available in the market. In spite of the consistently large number of construction projects in Singapore over the past few years, TW is only getting by.

2. TW's assets deteriorate and lose value quickly over time. And if the market for crane leasing does not improve over a long period of time, it will have lost much value from holding such assets without being able to generate a satisfactory return from them. TW's assets are not like freehold properties where an owner can wait out a weak market. Both are assets, but one appreciates while the other depreciates.

Unless I have a crystal ball that tells me that the controlling shareholder is buying out at NAV, or that oil prices will rise to more than a hundred dollars a barrel and stay there for a few years, I will only consider TW as a 'side bet,' if its price is attractive enough.

(12-07-2019, 08:38 PM)karlmarx Wrote: Assuming that an investor started buying at the start of 2016, when TW's share price was falling on the aftermath of the oil crisis, he/she will have sat for three and a half years by now. Who knows how long more they have to wait. But as an esteemed member will say, the cure for low prices, is low prices. The low returns of the industry will drive out competition, until profits eventually return to a reasonable level. At some time, demand for lifting equipment will increase, and for TW shareholders, hopefully by then, the supply of such equipment will be reduced, therefore allowing TW to lease at high rates.

A serious bet to me means being able to place a large portion of my money into something. TW is not that kind of company/business where I feel comfortable doing so, for two main reasons.

1. TW is simply a bunch of third-party manufactured cranes, and these cranes can be easily purchased by its competitors, if they desire to. There are limited freehold industrial plots near the central part of Singapore, but there are no limits to the number of cranes available in the market. In spite of the consistently large number of construction projects in Singapore over the past few years, TW is only getting by.

2. TW's assets deteriorate and lose value quickly over time. And if the market for crane leasing does not improve over a long period of time, it will have lost much value from holding such assets without being able to generate a satisfactory return from them. TW's assets are not like freehold properties where an owner can wait out a weak market. Both are assets, but one appreciates while the other depreciates.

Unless I have a crystal ball that tells me that the controlling shareholder is buying out at NAV, or that oil prices will rise to more than a hundred dollars a barrel and stay there for a few years, I will only consider TW as a 'side bet,' if its price is attractive enough.GO

Agree.. Market will not count number of chicken before eggs are hatched in 2 to 3 years regardless of results or GO...still uncertainties ahead.