Tat Hong

Tat Hong: OCBC upgrades to Hold and raises TP to $0.96 from $0.80. Note that following recent discussion with Tat Hong’s management, house upgrading Tat Hong to HOLD and raise valuation peg to 11x (previously 9x) and fair value estimate to $0.96 (previously $0.80). House feel that the stock has bottomed since the sell-off after its disappointing 1Q14 results, and that the street has adequately priced in its expectations for a weakened performance for the remainder of FY14. Its key market of Australia should start to see a pickup in business activity by early FY15 on commitments on infrastructure spending by the new Coalition government and as improving business confidence translate to actual spending. In the interim, relative stability from its SEA and greater China markets will help to offset some of the shortfall in performance figures for FY14.