Tiong Seng

Tiong Seng: Group spending $15.6m to ramp up its precast plant capacity in Iskandar by 60% to 160,000m3, equivalent to the supply of ~4500 HDB units annually. The first phase of production will commence in 3Q13, and the full production capacity is expected by 1Q15. The demand for precast is well-supported by the housing and infrastructure boom in Singapore (700,000 new housing units and 180km of new railway line) and Malaysia (80,000 new homes). Currently, the group is running at 100% utilization at its existing capacity. The capacity increase was in line with the group’s plan to become a regional precast supplier, especially in Malaysia and Myanmar. The expansion plans comes on the back of its non-binding MOU with Shwe Taung Development in Myanmar, to explore a JV on setting up a precast plant in Myanmar. According to Bloomberg estimates, Tiong Seng has a consensus 12-mth TP of $0.33, which implies a 22% upside from its last close of $0.27