Tat Hong Holdings - OCBC Investment 2016-11-15: 1 for 5 rights issue announced at S$0.33/share

Tat Hong Holdings - OCBC Investment 2016-11-15: 1 for 5 rights issue announced at S$0.33/share TAT HONG HOLDINGS LTD T03.SI

Tat Hong Holdings - 1 for 5 rights issue announced at S$0.33/share

  • Following a profit warning issued earlier, Tat Hong Holdings released its 2QFY17 results yesterday evening. Revenue was down 20% YoY to S$109.8m, which were within expectations, but a net loss of S$5.4m was recorded vs. S$4.4m in 2QFY16, partially due to lower gains from disposals this quarter as well. 
  • All segments saw a decline in revenue except for Tower Crane Rental, whereby revenue was up 11% to S$25.5m. Looking ahead, management does not expect conditions in the region to improve in the near future and the group will continue efforts in operational restructuring and cost containment.
  • In addition, the group has announced that it will be undertaking a renounceable underwritten rights issue to raise ~S$41.1m in net proceeds through a 1 for 5 rights issue at S$0.33/share. This is a 27.5% discount to the last closing price.
  • Group CEO Mr Ng San Tiong and certain persons acting in concert with him, have provided irrevocable undertakings to subscribe for up to 77.6% of rights shares. 
  • At this juncture, we maintain our HOLD rating, and fair value estimate of S$0.49, based on 0.55x P/BV.




Jodie Foo OCBC Investment | http://www.ocbcresearch.com/ 2016-11-15
OCBC Investment SGX Stock Analyst Report HOLD Maintain HOLD 0.490 Same 0.490




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