Yongnam

[sgd]

somewhere "a challenging year" para 3 in chairman statement 2005 ar

In the last two years, the Group had been cautious in
contract negotiation with regard to the raw material steel
prices. It was propitious that we have not been exposed to
rapidly rising world steel prices. Where customers preferred
to include steel price in the contract, we covered our risks
through forward purchases. However, as the construction
sector has improved, the Group now faces escalating
labour costs associated with the erection of steel.

http://yongnam.listedcompany.com/misc/ar2005.pdf

the 2004 statement mentioned something about sale and leaseback of the strutting inventory to improve balance sheet.

http://yongnam.listedcompany.com/misc/ar2004.pdf

Mind, I've not follow YN for a long time so I dunno if current management still following this.

(not vested)

[dydx]

2Q results just out…..
http://infopub.sgx.com/FileOpen/YHL-Unau...eID=308614 [result announcement]
http://infopub.sgx.com/FileOpen/YHL-News...eID=308615 [press release]
http://infopub.sgx.com/FileOpen/YHL-2QFY...eID=308616 [presentation slides]

Yongnam is now saddled with gross debts amounting to $188.0m, and the operation has been bringing in little positive FCF in the last 6 months. Jialat!

[artreal]

Comparing to this company with TTJ, I am a bit confused.

The business model seems to be different.
Before 2013, YongNam has a higher gross margin at 30% plus, much better than what TTJ has.
Even if TTJ has a dormitory business which greatly improves the gross margin.
Debt of YN does not seems to be a big problem then.

Year 2013 and 2014 were hit by two project delay cost overrun, plus one main-con bankruptcy.

But can we treat this as one time issue, and take this down turn as an opportunity for a turn-around?

The market is still there, the order book is healthy, and YN is still the biggest with a long track record.

[CityFarmer]

Comparing Yongnam and TTJ.

ROA/ROE: TTJ (15%/18%) while Yongnam (1%/2%).
Net gearing: TTJ (net cash) while Yongnam (>50%)
P/FCF: TTJ (4.6) while Yongnam (n.m. due to negative FCF)

One common between them is dividend yield: TTJ (3.8%) while Yongnam (3%), but a valid question is, Yongnam's dividend sustainable?

(not vested, but monitoring the company closely)

Yongnam sells and leaseback Nusajaya factory for $60 million from Axis REIT leaseback

Yongnam Holdings’ Malaysian unit has agreed to sell its factory at Nusajaya, Johor, to Axis Real Estate Investment Trust before leasing it back from the REIT.

Axis will pay RM153.5 million ($60.1 million) for the purchase. The property has been valued at RM167.5 million.

Yongnam is expected to make a net book value gain of $9.5 million.

Upon the transaction, Yongnam Malaysia will remain as the tenant of the property for a term of 15 years.

The sale proceeds are expected to be redeployed into the working capital for the group’s projects.

Yongnam closed flat at 19.8 cents previously.
http://www.theedgesingapore.com/the-dail...eback.html

[dydx]

Yongnam is selling its freehold Johore factory to Axis REIT at the price that is 8.4% below CMV (based on professional valuation), even though the sale is backed by a 15-year lease-back (presumably on prevailing commercial terms including a provision for regular upward rental revision pegged to say the Malaysian CPI)!! On the surface it looks like Yongnam is quite desperate to raise funds!

[CityFarmer]

The company already stated the use of the sale proceeds, but the analyst still painting the picture of special dividend...

(not vested)

Yongnam can afford special dividends, says DBS Vickers

Yongnam Holdings can afford to pay special dividends to shareholders following a move to sell its plant in Johor to Malaysia-listed Axis Real Estate Investment Trust ( Financial Dashboard) for about $60 million, says DBS ( Financial Dashboard) Vickers.

The steel fabricator said yesterday it would sell the property, which has a net book value of $24.5 million, and lease it back for 15 years.

Assuming the sale was completed last year, it would have boosted Yongnam ( Financial Dashboard)’s FY2013 earnings per share to 3.13 cents from 0.44 cents.

Its net tangible assets per share would have risen to 27.66 cents from 24.98 cents.

The company intends to use the sale proceeds for working capital and investments in infrastructure developments in the region.
...
http://www.theedgesingapore.com/the-dail...ckers.html

[CityFarmer]

YONGNAM SECURES THREE SUBCONTRACTS WORTH S$76.6 MILLION FOR
THOMSON-EAST COAST MRT LINE AND A PROJECT IN HONG KONG
- Contracts awarded for the Marina South Station and Tunnels as well as
Napier Station in Singapore and for a temporary steel bridge in Hong
Kong
...
http://infopub.sgx.com/FileOpen/YHL-News...eID=317599

[CityFarmer]

This project will keep Yongnam busy for a while...

Yongnam-led group wins US$1.4 billion Myanmar airport contract
By Bloomberg / Bloomberg | October 29, 2014 : 2:26 PM MYT

SINGAPORE (Oct 29): A Singapore construction company and an affiliate of Changi Airport Group won a US$1.4 billion ($1.78 billion) order to build a new airport in Myanmar’s Yangon as the country repairs its infrastructure after the easing of decades of sanctions.

A consortium led by Yongnam Holdings ( Financial Dashboard), which includes Changi Airport Planners and Engineers and Japan’s JGC Corp., will develop the Hanthawaddy International Airport, Myanmar’s civil aviation agency said today.
...
http://www.theedgemarkets.com/sg/article...t-contract

[Freenasi]

Price of Yongnam started creeping up this morning. Seems like the someone alr know the news. Same case as Olam?

[CityFarmer]

Yongnam is a good reference for TTJ's research...

Yongnam ends 2014 with $8.5 million loss, eyes $1.1 billion of new projects

SINGAPORE (March 1): Yongnam Holdings ( Financial Dashboard) sank into the red in 2014, hurt by a slow start in new projects and provisions in anticipation of lower variation orders for certain jobs.
...
http://www.theedgemarkets.com/sg/article...w-projects