Tuesday, October 21, 2014
TTJ Holdings: TTJ has secured several contracts worth $22m to supply structural steel works for Changi Airport Terminals 1 and 2, Tampines Town Hub as well as civil defence shelter doors. The addition of these new projects will lift TTJ’s order book to ~$119m and underpin revenue visibility over the next year. The group guides that securing these significant projects underscore the fact that demands for TTJ’s products and services remain firm in the public sector where ample opportunities are still expected. According to BCA, the outlook for the construction market in 2014 is expected to remain strong with projected volume of works worth between $31b and $38b coming from strong public housing demand and anticipated higher construction demand for institutional developments and major infrastructural projects. For 2015 and 2016, average construction demand is projected to be sustained at between $25–34b p.a. for which 60% of the total demand is forecast to come from building projects while the remaining 40% is expected to come from civil engineering. Going forward, management expects FY15 to be a challenging year, but remains confident about its long term prospects given its strong track record in structural steel in Singapore. The group has been channelling its fabrication works to its Keluli factory in M’sia, where labour costs are lower, and will strive to raise productivity through training of workers and automation. TTJ trades at 5.8x trailing P/E, 1.1x P/B and offers 3.9% yield.