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Tat Hong - has it broken the 52 weeks high?
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EastonBay
Master |
11-Apr-2007 16:55
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Report issued either yesterday or today. TAT HONG, jpm remains OVERWEIGHT - We initiate with OW, Dec-07 of S$2.00 Tat Hong is the largest crane rental and leasing company in Asia Pacific and is a play on the infrastructure growth in the region stemming from the strong demand from infrastructure, oil and gas, pharmaceutical and construction projects in Asia Pacific, Australia and Middle East. - Tapping on infrastructure growth in the Asia Pacific region With a strong regional presence in the region and the available stock of crane and heavy equipment, we believe that Tat Hong will continue to benefit, given the tight supply of equipment and further fuel by infrastructure spending in Asia Pacific, Australia and Middle East. - Investment drivers We forecast a 3-year revenue and earnings CAGR of 15% and 14%, respectively, driven by demand throughout Asia Pacific and tight supply of heavy equipment in the region fueling (1) higher utilization rates; (2) rising rental rates; and (3) higher prices of both new and used equipment. - Decent valuations for growth Focus should be on the company's recurring earnings, given its one-off gain of S$32MM or 43% of FY07E net profit as a result of the sale from one of its associates, CSC. Our price target of S$2.00 is based on SOTP valuations, which translates into 17x FY08E P/E and reflects 30% potential upside from the current level. Key risks to our price target are (1) loss of key crane suppliers; (2) delay in delivery or equipment unavailability; and (3) forex risk. |
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macdhighprob
Member |
02-Apr-2007 22:25
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Tat Hong made its second attempt today to move above its 52 weeks high. Price closed 1 cent above 52 weeks high of $1.45. How about volume? Is it encouraging? We will check on the technical of Tat Hong and see if we could gather some clues on the strength of this 'breakout'. Click to find out more |
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