Tat Hong Holdings Limited

[Louhan]

Change the rights issue price to $0.20. So cheap that pp wont sell or feel too painful to cut loss.

Looks like the rights issue at $0.33 is doomed to fail.

[brattzz]

waos....if fail... go under JM also har?? :O :O
serious leh... sudden cash call...!

over-expanded and caught in the down-turn...

[Louhan]

waos....if fail... go under JM also har?? :O :O
serious leh... sudden cash call...!

over-expanded and caught in the down-turn...

Needs to look for strategic partner! 😃

[karlmarx]

It has $400m of loans, and $100m of notes due 2018.

I'm not so sure if raising $41m is sufficient while the business is still bleeding.

[Louhan]

It has $400m of loans, and $100m of notes due 2018.

I'm not so sure if raising $41m is sufficient while the business is still bleeding.

Tat Hong share price drops to 33 cents today (same as rights price). So the rights price has to adjust downwards and also increase the rights ratio, in order to raise enough funds to redeem the notes due in 2018.
Looks like there's no support for Tat Hong's current share price! 🙄

[karlmarx]

1) Tat Hong managed to eke out a tiny profit for the latest quarter, but only because of the gains it made from the disposal of a property (see 'other operating income'). Management's outlook remain poor.

http://infopub.sgx.com/FileOpen/3QFY2017...eID=439131

The good news for shareholders is that it is selling assets ($49m proceeds from disposal of ppe), and reducing debt (from $447m to $392m).

2) One of its substantial shareholders -- AIF Capital Machinery Investment Limited-- did not participate in the rights issue, inspite of the low price and few number of rights shares, resulting in its holdings being reduced from 8.49% to 7.08%.

http://infopub.sgx.com/FileOpen/_AIF%20M...eID=439150

[cyclone]

Profit Guidance for  the fourth quarter and full year ended 31 March 2017 (“4QFY2017” and “FY2017”)

Tat Hong Holdings Limited, based on the preliminary review of its consolidated results, is expected to report a loss for 4QFY2017 and FY2017. This is primarily attributable to weak operating conditions in the Group’s main markets in Australia and Singapore, provisions and costs associated with discontinued businesses in Indonesia, impairments of assets and investments as well as foreign exchange losses.

Notwithstanding the expected loss, the Group’s cash and cash equivalents as at 31 March 2017 was in excess of S$100 million.

Further details will be disclosed in the Group’s audited financial statements for 4QFY2017 and FY2017 which will be released on or around 30 May 2017.

[cyclone]

Financial Results for the Financial Year ended 31 March 2017 ("FY2017")

Highlights :
1. Tat Hong reported 13% decline in FY2017 Revenue to S$458.3 million
2. Loss before tax of S$30.5 million for FY2017
3. FY2017 net attributable loss of S$38.0 million compared with net attributable loss of S$39.3 million posted for FY2016
4. Cash and cash equivalents of S$114.3 million as at 31 March 2017
5. Cash flow from operations of S$85.2 million for FY2017
6. Net gearing improved to 0.57 times as at 31 March 2017
7. No dividend declared for FY2017.

More details in :
1. http://infopub.sgx.com/FileOpen/Tat%20Ho...eID=455901
2. http://infopub.sgx.com/FileOpen/Tat%20Ho...eID=455902

[karlmarx]

Tat Hong released its FY17 results:

http://infopub.sgx.com/FileOpen/Tat%20Ho...eID=455901

http://infopub.sgx.com/FileOpen/Tat%20Ho...eID=455902

1) Underlying profit from its businesses worsened compared to FY16 and FY15. After adjusting for impairments, gains from property disposals, unrealised forex gain/loss, etc, TH's underlying profit was $7m in FY15 and $8.9m in FY16. In FY17, its impairments amounted to $6m, it had $1.5m in unrealised forex loss, and it has a $14.2m gain on disposal of property. Adjusting these for its net loss of $38m, their underlying loss from its business for FY17 is about $44.7m. This is quite a drop from the previous years. Its FY16 Annual Report provides more information on how its underlying profits are calculated.

2) TH pays about $23m a year in finance expenses on its $450m of debt and notes. This continues to be a big drain on their profitability. The rights issue of $41m did not help much in alleviating their situation. The good thing is TH has been paying down its debt with cash freed up from the disposal of properties and cranes. It needs to continue trimming its assets over the next 2-3 years to clear most of its debt obligation. At this rate, it should have no problem redeeming its July 2018 notes.

3) Nevertheless, TH's business continue to suffer from the weak demand of cranes. The press release showed the utilisation rate for its crane rental and tower crane rental divisions at 56% and 76% respectively. The rate did not change much from last year, so rental prices must have come down to cause the loss we see now.

4) My take is that TH continues to not be 'value-for-money,' as the probability of further cash losses in the near term is high. Taking a 50% discount to its PPE, its net assets will be left with about $217m, lower than the current market cap of $272m (based on $0.36 per share).

[karlmarx]

Management offers some encouraging words to shareholders during its AGM presentation:

http://infopub.sgx.com/FileOpen/Tat%20Ho...eID=464293