Yongnam

Yongnam: Slightly disappointing results. 2Q Rev $78.1m -5.4% yoy +16.0% qoq, net profit $12.1m -19.7% yoy +5.6% qoq. Results were affected partly due to lower revenue as well as completion of higher margin projects such as Gardens by the Bay, Mumbai Intl Airport and Vista Exchange at One North. The completion of projects also resulted in a shift of revenue mix from Structural Steel which fell 24.2% to Specialist Civil Engrg which grew from $40.0m to $45.9m +14.6% yoy. Current orderbook stands at approx $475.0m and has tenders of $1.4b in the pipeline. Current ongoing projects include MRT Downtown line 2 and 3 as well as Marina Coastal Expressway. Co expects growth to be supported by ongoing public civil engrg works and sees a slow down in private sector construction. Current NAV per share at 24.03c Citi maintains Buy with TP$0.29. Has included co’s outstanding warrants of 364m which is a 3rd of share base at exercise price $0.25 due to expire in Dec 12.