Yongnam

[NTL]

The significant non-recurring one-off loss on disposal of some fixed assets could well be related to Yongnam's huge inventory of used steel strutting system components which are likely sold at scrap metal prices.

Does that mean that they under-depreciate the value of their inventory?

[mrEngineer]

Dydx thanks for your insightful sharing. I wonder what makes you assume that steel struts components are sold off? I thought they could be relatively re-used?

I thought one of the issue would be Alpine Bau.. But its just a guess too.

[NTL]

They had already put the full amount as doubtful debt in the previous quarter.

[brattzz]

Links : http://nextinsight.com.sg/index.php/foru...9&Itemid=1

The business : KORI

Unlike peers in the construction industry, Kori occupies a niche -- 99% of its business is related to the underground construction of Singapore's MRT network.

Kori currently is involved in tunneling work and supplying and installing structural steelworks on the Downtown Line.


Kori Nobuaki, chairman of Kori Holdings.
As its orderbook winds down to S$30 million or so currently from $70 million at the start of this year, it will jump up again when the Thomson Line tenders are awarded.

Kori targets to clinch 4-5 projects for the Thomson Line, starting from 1H2014, said Mr Hooi.

As a BCA-licensed contractor for Earth Retaining or Stabilising Structures, Kori counts only 3 key direct competitors -- market leader Yongnam, a Taiwanese company and a Japanese company.

"There are lots of MRT work and few players in this niche. We are limited by resources issues such as manpower. We have tried to recruit but it's tough," said Mr Hooi.

An aspect of the business is notable: From 2008, Kori started buying steel struts. It would supply - actually they were sold to its customers, the contractors -- and install the steel struts for MRT projects.

When a project is over after 2 years or so, Kori would buy back the steel struts (at a much lower price, of course) and then supply them to another contractor at another project.

Kori recoups all the initial cost of the assets after the second round. From next year -- ie, with the Thomson Line projects -- a large proportion of the steel assets would have paid for themselves. Kori continues to grow its steel inventory at about 6-7K tonnes a year.

Kori now owns 40,000 tonnes of steel struts, about a quarter of Yongnam's 160,000 tonnes.

Mr Hooi said each of its projects needs about 10,000 tonnes which in turn generates about S$20 million of revenue.

With its 40,000 tonnes of steel struts, Kori generates about S$80 million of revenue over two years, the typical duration of a project.

Remarkably, Kori's gross profit margin has ranged between 19.6% and 23.9% in the last four years

[FatBoi]

The significant non-recurring one-off loss on disposal of some fixed assets could well be related to Yongnam's huge inventory of used steel strutting system components which are likely sold at scrap metal prices.

Does that mean that they under-depreciate the value of their inventory?

Are steel struts PPE or Inventories? Accounting-wise, inventories are not depreciated, PPE yes.

Very likely the loss on disposal is related to steel beams and columns (are they struts? ha! hmm, rub chin) I am not too sure if it is one-off, looking over the shoulder, 3 out of 5 years consist of rather significant gains / losses relating to disposal of PPE (and if we dig further, the PPE involved are mostly steel beams and columns).

Yongnam's history of gains / (losses) on disposal of PPE:
2008 - (1.5) mil
2009 - 1 mil
2010 - Insignificant gain
2011 - (1.3) mil
2012 - Insignificant (loss)

Does not seem to suggest they are applying a longer-than-reality useful life estimate (would have expected losses on disposal all the time). Perhaps, the gain or loss might be a result of prevailing steel beams resale / scrap prices (tagged to steel price)?

[orangetea]

History of Delta Lloyd Asset Mgmt (DLAM)
-Subsidiary of Dutch Insurer Delta Lloyd group.
They are the same substantial holders for kingsmen creative.

2012-04-20 Added 14,765 lot at ... No price available but i got an average price from yahoo finance on that day was about 25c

AR2012 DLAM held deemed interest at 8%.
Prior to this, AR2011 was not listed as substantial holder.

2013-02-19 Added 1,800lot at 28.6c
2013-03-13 Added 500 lot at 27.5c
2013-10-13 Added 1,213lots at 24.08c thereby increasing stake by 0.09%


2012-04-20 DLAM became substantial shareholder. Increased deemed interest holdings from 4.55% to 5.72% and today they hold 9.08% as at 31 oct 2013

(vested)

[orangetea]

I view today's current weakness is good for collecting for medium term to ride on SG's construction theme.

TTJ's volume too thin but definitely have margin advantage. Since Yongnam's price has come down considerable, it is also a pick for me.

Vested in both.

[orangetea]

Translated article via Google Translate

-See attachment

Source
http://www.deltalloydassetmanagement.de/...holdings-/

[mulyc]

i actually quite agree with gillian wu's assessment that yongnam is attractively priced currently. already picked some up.

[orangetea]

Yongnam is held in two funds
a. Delta Lloyd L Asian Participation Fund
b. Delta Lloyd Azie Deelnemingen Fonds N.V.


Delta Lloyd L Asian Participation Fund A
Code d'ISIN LU0614143120, commenced 04-10-2011

Source
http://www.deltalloydassetmanagement.de/...on-fund-b/

Quantities within Delta Lloyd L Asian Participation Fund (custodian being Banque de Luxembourg S.A.)

Delta Lloyd AR2011-Page 99
Qty 23,730,000
EUR 3,123,998.26
Average cost per share 13.165 eur/cents

Delta Lloyd AR2012-Page 106
Qty 39,515,000
EUR 5,510,151.13
Average cost per share 13.944 eur/cents

Delta Lloyd Half Year 2013-Page 101
Qty 35,138,000
EUR 5,212,902.15
Average cost per share 14.836 eur/cents

Within Yongnam AR2012, it was reported Delta Lloyd held (then) 101,055,000

So far i managed part A of the fund...