Tuan Sing Holdings Limited

Uobkayhian on 2 Jan 2013

Valuation

·          Tuan Sing (TSH) is trading at 7.0x FY11 PE and 0.6x P/B. Share price catalysts include an improvement in quarterly earnings due to the recognition of property sales and revaluation gains in its investments.    

Investment highlights

·          TSH is now primarily a property developer with this segment attributing more than half of 9M12’s profit before tax. The group has completed various property development projects, such Leedon Parkand Adam Park Condominium in Singapore and Lakeside Ville in China. It has also undertaken several projects, namely Seletar Park Residence, Mont Timah and Sennett Residence and plans to launch Cluny Park Residence in early 2013.

·          Most recently, TSH commenced the redevelopment of Robinson Towers into grade A office tower with a retail podium with a total gross floor area of 23,900sqm. TSH should be keeping the project as an investment property and has engaged Jones Lang LaSalle as the leasing agent.

·          On top of property development, TSH also co-owns two hotel properties in Australia, represented by its 50%-owned jointly-controlled company Grand Hotel Group (GHG). The two hotels, Grand Hyatt Melbourne and Hyatt Regency Perth, are managed by Hyatt International and generated A$124m in revenue and A$40.1m in net property income for 2011.

·          Lastly, TSH has invested in several entities such as 80.2%-owned SP Corporation Limited, 97.9%-owned Hypak Sdn Berhad, 43.3% interest in SGX-listed Gul Technologies Singapore Ltd and a 49% stake in Pan-West. 

·          SP Corp is engaged in commodities trading, and the distribution of tyres and auto-related products. Hypak is in the business of manufacturing and marketing polypropylene packaging bags inMalaysia. Gul Technologies is a printed circuit board manufacturer while Pan-West is a retailer of golf-related products.

9M12 Financials Highlights

·          Revenue jumped 55.5% to S$259.9m, mainly driven by higher development property sales from Mont Timah and Seletar Park Residence inSingapore and Lakeside Ville in China. This segment also contributed positively to profit after tax of S$19.8m as compared with S$7.3m in 9M11. 

·          Industrial services, represented by SP Corp and Hypak, recorded slightly lower revenue of S$134.1m and profit after tax of S$1.2m as compared with S$139.8m and S$1.2m in the same corresponding period last year. Overall, the group’s profit after tax rose 124% to S$35.6m.