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A set of very strong 1Q results..
https://links.sgx.com/FileOpen/TWCH-1QFY...eID=586131
Can this be sustained? Well, the near doubling of Marine Transportation (mainly to support moving the group's heavy lift & haulage assets around in the region to service land-based O&G and petrochemical projects) revenue to $1.9m is an indicator that there is more demand and business outside Singapore for Tiong Woon's large mobile cranes fleet. In Singapore, with more high-rise residential construction projects going on (including the government's push for the adoption of the PPVC method of construction), Tiong Woon's tower cranes are enjoying brisk business, and this should continue for some time.
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Triggered by a set of impressive 1Q results last Thursday (14Nov), Mr Market has renewed interest in Tiong Woon as a business/profit recovery play, and so far the counter has advanced an impressive 30% in just 5 sessions - from $0.35 (closing on 13Nov) to $0.455 (closing yesterday). A relevant question to ask is whether or not the underlying business/profit recovery can sustain into the foreseeable future. If the answer is indeed positive, Mr Market's price action may well just represent the initial cheer. We should also bear in mind that Tiong Woon with its 30Sep19 NAV/share at $1.11 is asset-rich, its cranes fleet as the main revenue generating asset is conservatively stated in the B/S, and the latest NAV has not accounted for the hidden additional value in the HQ premises at 15 Pandan Crescent based on its CMV.
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Having added $0.01 yesterday, Tiong Woon was marked up by another $0.03 today to close at the $0.50 mark, backed by close to 1.5m share transacted. What is happening?
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2Q result out last evening...
https://links.sgx.com/FileOpen/TWCH-1HFY...eID=596117
Another quarter of steady performance and profitability towards full business recovery over the next 2 to 3 years.
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(13-02-2020, 08:49 AM)dydx Wrote: 2Q result out last evening...
https://links.sgx.com/FileOpen/TWCH-1HFY...eID=596117
Another quarter of steady performance and profitability towards full business recovery over the next 2 to 3 years.
What is weird is that Tiong Woon has now had two very strong quarters whereas Sing Heng Machinery continued to do poorly last quarter (they have yet to report for the latest quarter). The crane business is commodities with few barriers to entry, so you would expect a rising tide to lift all shships. Perhaps it is Tiong Woon’s focus on the petrochemical sector that is helping it ? I am a bit baffled but happy to see the strong performances
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13-02-2020, 10:47 AM
(This post was last modified: 13-02-2020, 02:22 PM by dydx.)
(13-02-2020, 09:01 AM)GreedandFear Wrote: What is weird is that Tiong Woon has now had two very strong quarters whereas Sing Heng Machinery continued to do poorly last quarter (they have yet to report for the latest quarter). The crane business is commodities with few barriers to entry, so you would expect a rising tide to lift all shships. Perhaps it is Tiong Woon’s focus on the petrochemical sector that is helping it ? I am a bit baffled but happy to see the strong performances
Well, I am not an expert in cranes. Maybe others more experienced in the forum can share their expertise as well.
What I know is that you need big and more expensive cranes to lift very heavy loads in higher value projects. You cannot use 2 smaller tower cranes to lift a 30-tonne module in a high-rise condo project to be built by the PPVC (Pre-Fabricated Pre-Finished Volumetric Construction) method, so only a bigger tonnage tower crane can do. In the O&G space, you need additional expertise and experience working with those chosen EPC main-contractors building refinery/petrochemical plants, plus a good safety track record, in order to be considered and do the heavy lift & haulage work.
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I took the opportunity to sell all my tiong woon shares after the unexpected great 1Q results. The reason is I believe it is a one off good result rather than sustainable. There was no profit guidance given and this mgmt is not shareholder friendly especially with dividends. I believe if business is so good and sustainable, the mgmt would have been buying shares themselves or takeover since the share price is so much lower than NAV.
The 2Q results is abit better than I expected but still it is a decline from 1Q. My interest is to see what the next 2 quarters numbers are and what the mgmt will do with the extra cash. I would still buy Tiong Woon shares if it is being offered for pre-1Q prices. The same reason I first bought - enough safety margin.
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14-02-2020, 06:13 AM
(This post was last modified: 14-02-2020, 06:14 AM by karlmarx.)
Shares like TW are interesting because it has a history of profitability, and low dividend payout ratio. It has been reinvesting profits into buying more and larger cranes, to do more and larger projects.
At what point will it distribute a higher payout ratio? Perhaps when the Ang family has decided that they have grown the company to their a size of their satisfaction.
This is important, because the implication of buying stocks which produce little or no dividends is that the shareholder only has two means of making a profit: an acquisition by the controlling shareholder or third party, or someone else buying your shares at a higher price. Someone who also does not intend to profit from receiving dividends, but by selling the shares to yet another person.
So the situation here is kind of like medtecs, except that TW has a better track record of profitability and dividends (albeit low). But essentially, people are buying and selling the shares in expectation that the company will profit or loss from a particular macro trend, regardless of whether shareholders shareholders actually benefit -- through meaningful dividends -- from such trends.
I'm not saying that money can't be made by selling to a greater fool, or that is it 'not good.' Apart from having to profit by selling to a greater, wouldn't it be better to also receive a reasonable yield, just in case the greater fool never comes?
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There is quite a lot more interesting info/photos/videos and updates in Tiong Woon's LinkedIn account...
https://www.linkedin.com/company/tiong-w...lding-ltd/
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(13-02-2020, 09:01 AM)GreedandFear Wrote: (13-02-2020, 08:49 AM)dydx Wrote: 2Q result out last evening...
https://links.sgx.com/FileOpen/TWCH-1HFY...eID=596117
Another quarter of steady performance and profitability towards full business recovery over the next 2 to 3 years.
What is weird is that Tiong Woon has now had two very strong quarters whereas Sing Heng Machinery continued to do poorly last quarter (they have yet to report for the latest quarter). The crane business is commodities with few barriers to entry, so you would expect a rising tide to lift all shships. Perhaps it is Tiong Woon’s focus on the petrochemical sector that is helping it ? I am a bit baffled but happy to see the strong performances
without understanding these 2 companies well, it is hard to make a meaningful conclusion, for a start, Sin heng do quite a bit of business in trading, in the last annual report, their trading segment is >50% of total revenue, Tiong Woon is pretty negligible in trading; Sing Heng deal with aerial lift rental which Tiong Woon does not; Sin Heng deal with crane rental up to 500ton whereas Tiong Woon has cranes of 1600tonnage
jus a very simple logical thinking, when crane market recovers in general with the construction industry recovery, existing crane fleet utilisation will hv to improve up to a point and then there is a need to purchase new cranes, so in very simple thinking, it make sense that Sin heng will lag behind in the recovery, but please note this is in very simple thinking term
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