TTJ Holdings

[LocalOptimal]

I guess most people should be able to derive their own fair value estimates for the TTJ share by discounting (1) the predictable future earnings of the dormitory business, and (2) a certain assumed but conservative estimate of the recurring earnings from the structural steel business in the say next 3 years, and add them to the latest NAV/share of $0.3522.

I guess at this point we can simply put aside the higher realisable value of the 2 factories.

What if TTJ decides to pay out say $0.08 to $0.10 from its $0.23/share net cash reserve as a special dividend?  This is entirely possible and could happen anytime, and I am hoping that it would happen when the company announces its final result for FY15 (ending 31Jul15) in Sep15. Of course, this is just my own wishful thinking.

dydx bro was spot-on a few months ago in this post.

[valuebuddies]

One should not forget that significant value of the company is the cash reserve. Though one is buying now at 33c, but the theoretical cost is just below 10c, what a good bargain imo.

[dydx]

It is quite clear that the just declared $0.08/share final dividend - which will be paid on 18Dec15 (with XD date fixed for 1Dec15).....
http://infopub.sgx.com/Apps?A=COW_CorpAn...29bd3cbed5
- could well become a powerful catalyst event to propel the market cap/share price of TTJ towards its justified fair intrinsic value, which rationally speaking should sufficiently account for the foreseeable future earnings of the TTJ Group, and be at a decent premium over its latest 31Jul15 NAV/share of $0.3682.

Let's see whether Mr Market is willing to show his usual magic?

[CityFarmer]

Mr. Market adjusted the market value of the company, by approx the newly declared dividend, at about 40 cents per share. So no re-rating on the company, thus the opportunity to accumulate at reasonable price remained...

(vested)

[BlueKelah]

Just like the bumper dividends given by those that profited from Singapore's past few years property boom, like HLS and WeeHur, fools jump in for the dividend and after the big dividend XD, no one will be interested in the stock anymore. dun get caught by the recent surge, those vest will be taking the opportunity to unload. even at 38c now can see plenty of seller but not many buyers.

Gonna be lean times ahead for this company as well after the past few boom years.

hmm detecting the same sentiment here as when the bulls were going "gaga" over Penguin and CES. Looks like they have found a new stock to "pump"

[johnnydash]

while it may be good to play devil's advocate, i do not share your views. i'll be straight up and say that I missed the boat on this, only bought a measly amount recently. 

i do think value buddies should have the license to be happy and to share the joy with each other. i sense neither the bullish sentiments in Penguin or CES or any strong attempts at pumping this stock, singing the praises of this stock. In fact, the effort and tone by most of the value buddies have been measured and fair. its the detractors on the other hand...

perhaps the detractors can consider the cash hoard that TTJ has which is close to its market capitalisation and enormous cash generating ability. Now that the management has shown willingness to share the cash with minorities, it is very positive. We can expect return of this cash hoard in the form of higher dividends in the future.


the biggest risk now is the macro environment, and risk of turmoil in the financial markets. 


small amount vested.missed the boat

[slowandsteady]

It's important to note that the dormitory business will end soon, and is a huge cash generator at the moment. Question is how to replace that shortfall after that? Other part of business is very dependent on winning contracts, and thus projections into the future are unreliable at best.

Congratulations to those who have vested earlier. Clearly Mr. market is happy But I would caution those who are jumping in right now, as paying out the dividend doesn't change the actual value of the company. It's not as if 8c was created out of thin air - it still comes out of the company coffers.

[BaconFTW]

My sense is that if we were not vested before the 8 cent dividend announcement, it is too late now to get in. The drive up in the stock price will likely be accompanied by a corresponding drop in share price come end dec, since the nav will drop and market may react accordingly. So we'll probably end up with no net gains.

The question then becomes will there be a new baseline level for ttj. I don't see any price catalysts in the near term, so coupled with the low liquidity of this stock, Im not sure if the market will reprice this stock higher. The 8 cents seem to me like a one-off exercise, looking at their Net Income.

That said, its a pretty stable stock with nice dividends every year, so i might go in ex-div if the price is better ie drops more than 8 cents.

(Wishing i was vested a few months back)

[CityFarmer]

It's important to note that the dormitory business will end soon, and is a huge cash generator at the moment. Question is how to replace that shortfall after that? Other part of business is very dependent on winning contracts, and thus projections into the future are unreliable at best.

Congratulations to those who have vested earlier. Clearly Mr. market is happy But I would caution those who are jumping in right now, as paying out the dividend doesn't change the actual value of the company. It's not as if 8c was created out of thin air - it still comes out of the company coffers.

From the other perspective, is the current price already factored-in the "diminishing" dorm biz? The steel biz should be the core biz, albeit dorm biz is very profitable. The steel biz is lumpy indeed, but sustaining. We should be able to predict, with reasonable accuracy, with past records, and current market outlook.

I am on the opinion, Mr. Market has factored in the concern. 

The 5-years average PBT (based on ARs' segment info) of steel biz, is about S$11 million. The company has S$84 mil of cash reserve. Let's assume half of the cash is "free", thus S$42 million. At a previous price of $0.335, or S$117 million, Mr. Market valued the company steel biz at about Price/PBT of 7. It should be a fair valuation, if not undervalued. Even if we exclude the cash portion, the Price/PBT is 10-11, which is not excessive either.

The company is actively seeking opportunity in dorm biz. It is a bonus, if the company managed to get it. On top of that, we still have more than one year to extract "cash" from the dorm biz till 2017 

My concern is, very few shareholders are willing to sell, the liquidity is a real pain. The 8c dividend has given me the "rare" opportunity to accumulate, thus I have bought more at $0.38 per share.

(vested, and accumulating)

[BlueKelah]

It's important to note that the dormitory business will end soon, and is a huge cash generator at the moment. Question is how to replace that shortfall after that? Other part of business is very dependent on winning contracts, and thus projections into the future are unreliable at best.

Congratulations to those who have vested earlier. Clearly Mr. market is happy But I would caution those who are jumping in right now, as paying out the dividend doesn't change the actual value of the company. It's not as if 8c was created out of thin air - it still comes out of the company coffers.

From the other perspective, is the current price already factored-in the "diminishing" dorm biz? The steel biz should be the core biz, albeit dorm biz is very profitable. The steel biz is lumpy indeed, but sustaining. We should be able to predict, with reasonable accuracy, with past records, and current market outlook.

I am on the opinion, Mr. Market has factored in the concern. 

The 5-years average PBT (based on ARs' segment info) of steel biz, is about S$11 million. The company has S$84 mil of cash reserve. Let's assume half of the cash is "free", thus S$42 million. At a previous price of $0.335, or S$117 million, Mr. Market valued the company steel biz at about Price/PBT of 7. It should be a fair valuation, if not undervalued. Even if we exclude the cash portion, the Price/PBT is 10-11, which is not excessive either.

The company is actively seeking opportunity in dorm biz. It is a bonus, if the company managed to get it. On top of that, we still have more than one year to extract "cash" from the dorm biz till 2017 

My concern is, very few shareholders are willing to sell, the liquidity is a real pain. The 8c dividend has given me the "rare" opportunity to accumulate, thus I have bought more at $0.38 per share.

(vested, and accumulating)

CF thanks for the valuation with the PBT. However there is likely a cyclical component to go with TTJ's steel biz as they do depend on some cyclical sectors for business and which will render the historical 5 year PBT inaccurate. I am pretty sure these sectors are not showing uptrend, with the shrinking revenue stream we are seeing. 

With small caps without a moat, stability of earnings in sector downturn is also not guaranteed. And for those chasing growth pretty much non-existent for this local based co. 

from what I have seen on this thread, order book only increased to 122mio this quarter? if that is so then with SG property/economy downturn coming, could TTJ end up with an revenue of only ~60mio+ a year? translating to only ~1.5-2c EPS a year?

The only likely catalyst for this stock given its low float(top 20 own 91.5%) is a privatisation, in which case would happen at ~29c, factoring the div hit to NAV. This is a very big risk. If share price drifts downwards in the next few years, those buying today or even after XD run the risk of a G.O. at depressed prices..

Pretty fairly valued now, CF u must think its another "wonderful" company