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I like what I read in The Business Times today on how Yongnam is leveraging on its core competencies to diversify into investing in infrastructural developments which would generate recurring earnings in future.
This is an astute step in the right direction since Yongnam is already a leader in the provision of structural steelworks, specialist civil engineering and mechanical engineering services. So, they have an upperhand in undertaking infrastructural developments.
Yongnam has, together with JGC Corporation and Changi Airport Planner and Engineers Pte Ltd, looked into possibly submitting a tender for the construction and management of an international airport in Myanmar.
This new business direction and the burgeoning pipeline of infrastructure projects in Singapore to 2030 hint of more vibrant times ahead. Yongnam is, more likely than not, going to be a steady performer and could surprise with better results in time to come.
Dividend payout remained the same at 1c per share despite a decline in EPS. This suggests to me that Yongnam is commited to paying at least 1c per share in annual dividend in future.
I am rather contented to be paid to wait for Yongnam's results to improve meaningfully over time.
Related post:
Yongnam: Declared 1.0c dividend per share.
Bloggy Award
5 comments:
Hi Ak,
Fortunately to have brought back some shares around 27 and 27.5 cents in the last few days before the announcement.
Today have offload some at 29.5 cents and keep the remaining for longer term.
If it does correct after the honey-moon period...i will accumulate again around 27 cents level.
Good choice and Continue to ride on the uptrend.
Cheers.
Yee
AK
where did u get your crystal ball? amazingly accurate with yongnam shooting up today. LOL
Hi Yee,
You are a nimble footed trader. Good on you. :)
Hi seefei,
I kept staring at my crystal ball and was thinking of sending it for repairs because it had a few holes in it.
Then, I realised it was a bowling ball. :(
DBS upgrades Yongnam Holdings (Y02.SG) to Buy from Hold as it believes Yongnam's consortium is a strong contender for Myanmar's airport projects.
"We think Yongnam's consortium stands a good chance of securing the projects given its Singapore and Japan representation. JGC corporation is Japan-based while Yongnam and Changi Airport Group are Singapore-based, all of which are viewed favourably by the Myanmar government."
A win on the Yangon airport project could boost the share price by $0.12, it says. DBS estimates that the construction of the Yangon Airport project could add $10.4 million or $0.06 per share to FY14 forecast earnings.
"Thereafter, the rights to operate the airport for the next 30 years would add another S$0.06 to the stock based on discounted cashflow projection," it says; "Yongnam's current valuations are only in line with peers, and not reflecting Yongnam as a strong contender for project wins in Myanmar.
We are convinced Yongnam stands a good winning chance and thus believe +1 (standard deviation) valuation is achievable."
$0.41 target.
Dow Jones & Co, Inc
Monday, 03 June 2013 10:25
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