Tat Hong

Tat Hong: OCBC maintains Buy with $1.39 TP. Note that since house upgraded its rating to BUY, the stock has risen by 34% vs STI’s 11% increase for the same period. The sharp run-up was mainly due to a strong recovery in Tat Hong’s crane rental business. Looking ahead, believe that there is still plenty of upside, arising from higher rental rates and increased infrastructure activities. The recently announced S$18b Thomson Line project should also contribute positively to the construction activity in Singapore over the medium term horizon. Tat Hong’s business model has a significant operating leverage; and with rental and utilization rates likely to increase going forward. House believe the group is on track to deliver record profits for FY12-13F.