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Tai Sin
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vintlay
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27-Apr-2007 09:36
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Can the original poster change the Topic to Tai Sin instead of Others in order to see the price movement for this counter? |
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lc8888
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27-Apr-2007 09:30
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What?s on the table Tai Sin Electric Cables (S$0.495) - Initiating coverage - Electrifying A leading electric cable producer in Singapore. Tai Sin was incorporated in 1980, with main business the manufacture of electric wires and cables used purely to transmit low voltage electricity. It is the second largest producer (30% local market share) of electric cables in Singapore (total six domestic players). Demand growth likely to be well ahead of supply potential. We believe demand for electric cables in Singapore alone should continue to outstrip local supply. Contractors can import cables but usually at a higher shipping component cost with a longer delivery timeline. Thus local producers will usually be the first stop of choice. We estimate that local producers supplied a total of S$340m worth of cables in FY06. We anticipate S$15bn worth of construction contracts to be awarded in FY07-08, leading to cabling and wiring contracts worth S$750m-1.2bn. Maintaining spare capacity to take advantage of lucrative contracts. Tai Sin currently runs its Singapore factory at only 85% utilisation (600mt/mth). Its factory in Malaysia is also running at a mere 65% (290mt/mth). This is a deliberate strategy by management. Given the impending surge in demand (with the IR being a wildcard as there is no legacy model in Singapore to estimate how much wiring will be needed), this spare capacity is needed to take advantage of urgent incremental demand. Target price set at S$0.96 based on 13.5x CY08 P/E. This places Tai Sin at a conservative discount to its 1-year average historical P/E (31x) and in-line with the earning multiples of Draka Holdings, listed parent of its Singapore peer, Singapore Cables. Tai Sin should blossom as the demand for electric cables in Singapore continue to outpace local production. |
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