Tuesday, February 21, 2017

TTJ Holdings(K1Q)

Draft: 2/20/2017, price $0.38, S$135m.

Data source: Prospectus 2010, Listed Apr 2010, Issue price 0.20/share.

Updated 2/25/2017,
Data source: 2016 AR

Company profile(2010):
- Structural steel specialist strong in SG and Middle East. Production capacity of 42k tonnes/pa.
- Dormitory biz hosting 5700 people.
Chairman & CEO: Mr. Teo Hock Chwee, founded company in 1981<TTJDE>. Age 60(2016).
91% business from SG in 2009. 67% staff are foreign workers(236 work permit holders in two dormitories).

Risk factors:
Business nature: on a project basis and non-recurring, it is critical to continuously secure new projects.
Steel price fluctuation US$582~1160 per tonne in 2006-2010. (US$681, Feb 2017)

Max Production capacity (tonnes) Utilization
2007 19000 57%
2008 24000 65.80%
2009 35000 56.70%

<Pg 69 B/S>
$’000 Audited 31-Jul-09
Property, Plant and Equipment                            24,074

Investment Property                            18,697

Total Non-Current Assets 
Inventories                                 600

Trade and Other Receivables                            49,419

Other Assets                                 475

Cash and Cash Equivalents                              5,875

Total Current Assets 
Total Assets 



Share Capital                              2,000

Retained Earnings                            29,941

Other Reserve                               (318)

Minority Interest                                   11

Total Equity 
         31,634 32%


Deferred Tax Liabilities                                 768

Finance Leases                              1,549

Other Financial Liabilities                            15,045

Total Non-Current Liabilities 
Income Tax Payable                              2,899

Trade and Other Payables                            21,730

Finance Leases                                 802

Other Financial Liabilities                            24,540

Other Liabilities                                 173

Total Current Liabilities 
Total Liabilities 
         67,506 68%
Total Equity and Liabilities 
         99,140 100%

When it was first listed, gearing ratio is high, current ratio is low. Who would think of this underdog in an industry that sounds so dull?

But its shareholder is handsomely rewarded if so holds the IPO pieces till now. TTJ Holdings enjoyed the magic power of capital market to grow its revenue from 60+m revenue to 130+m.



Gross Profit15.414.823



Net CF from Operating3.94.413.5

EPS(cents/ 350m shares)



IPO 20100.2(cents)


in millions2007-072008-072009-072010-072011-072012-072013-072014-072015-072016-07
GP Margin17%26%29%21%22%28%29%29%
OP Margin13%16%20%12%13%19%21%22%
Operating CF141724518293135
Payout Ratio %15.852.63296.9

With the today's price of 0.38 cents, without counting the dividends, it offered its shareholder an annualized return of 10~11% for the past 6.5~7 years since it went public (even though the price was offered at 1.5PB that time, only 1PB today),while STI index was 2900~3030 in Apr 2010 it is still around that range today.

Operation wise, it did much better than its competitor Yongnam Holdings(AXB). Yongnam holding has 300m+ revenue a year, with GM of sub-ten %.

It is a win-win for its founder/owner and its shareholders.
History from 1970s, <Pg 84>
TTJ Civil Engineering closed shop in 2002 due to unable to meet its liabilities obligations, renamed to FRC Civil Engineering.

 Business mainly in Singapore, overseas venture(UAE) doesn't seem work well, with SG gov's continuous infrastructure investment, and company's S1 steel contractor grading, the market demand is promising.
<Permits> Pg 237
2016 Chairman msg:
careful selection of projects, sustain profit margin and bottom line growth. 姜是老的辣。
Public sector demand: S$16~20b/p.a.
Top 3 customers, 75m out of 137m,50+%
Administrative cost: 25.8m/500+employees(2010 data), 40~50k/pax, which means TTJ can hardly achieve cost adv. over local player in other market(this seems proven by little overseas success so far). It means the major revenue driver will still be construction in SG which company has established track records.
PPE: ~35-40m.
TTJ Green Energy incorporated.

Initialed a position. Vested, not because my investment, but TTJ built the sky bridges of the place that I'm currently staying.

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