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Tat Hong Holdings Limited
13-11-2017, 06:01 PM,
Post: #101
RE: Tat Hong Holdings Limited
Ah, the Bloomberg article explains. I see now. Thanks.

Well I guess now is a good opportunity for TH shareholders to exit then?

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13-11-2017, 10:48 PM,
Post: #102
RE: Tat Hong Holdings Limited
(13-11-2017, 06:01 PM)karlmarx Wrote: Ah, the Bloomberg article explains. I see now. Thanks.

Well I guess now is a good opportunity for TH shareholders to exit then?

Well, it depends on your view of where we are in the cycle. A few points to ponder :

1. The rumoured bid price is 50 cents. NAV is 77 cents.
2. The Australian business (which was the first to start suffering during the downturn) is starting to turn around
3. The Chinese Tower Crane biz (which at one point the company was looking to spin-off during an IPO) continues to grow every year
4. Singapore property companies are stocking up on land (see all the en blocs) which will result in construction which will help the crane biz which has otherwise had to rely on public works
5. During the good times, in the last cycle, the share price went up to $1.50+. This is a capital intensive biz with lots of operational leverage, so profits can increase a lot with higher utilisation rates.

I am not saying that they are out of the woods but it does feel like we are starting to turn the corner and a 35% discount to NAV is too great. I would not be a seller at that price.

Vested.

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13-11-2017, 11:40 PM, (This post was last modified: 13-11-2017, 11:44 PM by karlmarx.)
Post: #103
RE: Tat Hong Holdings Limited
The danger has always been the debts and continued loses, which could lead to a collapse if the downturn is prolonged. If Tat Hong's debt were much lower, it will offer investors more time to wait for the upturn, safely. The market never sold Tat Hong at a price which I thought sufficiently compensates this risk.

While I agree that it seems that the upturn is coming, we never know for sure until it is far behind us. It has been 10 years but the Baltic Dry Index has yet to recover to half of its previous high. Maybe in the next 10 years? I don't know. Likewise, I cannot be certain whether there will be higher demand for Tat Hong's services in the future. There are just to many demand/supply factors to consider, for me at least.

Hence, I thought SCPE's offer of 50cents was pretty generous, and very close to how much I thought it should be worth.

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14-11-2017, 12:56 AM,
Post: #104
RE: Tat Hong Holdings Limited
Read both Sin Heng and Tat Hong annual report couple of months back. Was comparing both business. In the end felt Sin Heng has more potential and more conservatively managed. Recent stock price actions seem to reflect that as well.

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