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Yongnam: Partial divestment at 33.5c.

Monday, May 13, 2013

Building on my observation that Yongnam's stock price seems to move in blocks of 1.5c, I have been putting in overnight sell orders at 34c for a few sessions. These sell orders did not manage to get filled even as the stock touched 34c in recent sessions.


With CMF forming lower highs, we have to think that smart money has grown less enthusiastic about the stock even as the recent high of 34c was repeatedly tested as resistance. So, I made a decision to partially divest at one bid lower than 34c today.

This batch of shares was purchased in February 2012 at 24.5c a share. So, the result is a capital gain of 36.73%. Of course, I also received 2 rounds of dividends of 1c per share in the same period. Total ROI is 44.89% over a 15 months period. Not too bad.

Yongnam's stock is trending up and the channel is clear to see. It is currently testing the resistance of the channel. There is a chance it could break out of resistance but with volume anaemic, the chance is slim. There is also a chance it could pull back to test support provided by the rising 20d MA or even the support of the rising channel.

Technically, it seems more prudent to lighten my long position in Yongnam and to wait for a pull back before loading up again.

Related post:
Yongnam: Partial divestment at 31c.

5 comments:

AK71 said...

Yongnam Holdings reported a net profit of $11.5 million for the three months ended March 31, 2013 (1QFY2013). This was on the back of a 21.8% increase in revenue to $81.9 million, compared to the corresponding quarter of the previous year (1QFY2012).

At the costs front, general and administrative expenses for the quarter were reduced by 3.0% to $6.2 million, mainly on lower staff costs. Finance costs were also down by some 7.4% to $0.7 million, on lower bank interests and charges in 1QFY2013. Net gearing was marginally higher at 0.34 times as at March 31, 2013, compared to 0.33 times as at December 31, 2012.

In the quarter under review, earnings per share was maintained at 0.91 cent, as in 1QFY2012. Group net asset value per share strengthened from 25.60 cents at December 31, 2012, to 26.52 cents at March 31, 2013.

Yongnam says project demand is expected to continue in the year as the company pursues $1.3 billion worth of new infrastructural and commercial projects in Singapore, Hong Kong, Malaysia, India, Indonesia and the Middle East, many of which, if secured, are expected to come on-stream in the second half of FY2013.

Yongnam’s order book stood at $324 million at the end of March.


Taken from The EDGE.

AK71 said...

 Reiterate BUY ahead of 2H13. Our TP of SGD0.43 is pegged to 10x FY13F.

 1Q13 results were largely within expectation. Revenue grew 22% yoy. Profit was flat yoy, but this was in comparison to exceptional margins in the same quarter last year.

 We expect margins to pick up on execution of strutting orderbook which has higher margins and the commencement of new contract wins. Management is gunning for several contracts in 2H13 which will replenish orderbook substantially.


Maybank Kim Eng, 16 May 2013.

AK71 said...

At 17% of our FY13 forecast, 1Q13 net profit was in line with our
expectation as we stick to our
assumption that 65% of this year’s
earnings will only come through in
2H13.

Our EPS estimates and target price (still at 6x CY14 P/E, its 3-year mean) are unchanged. We maintain an Outperform as the group is poised to land some mega accretive projects.

TP: 36c


CIMB, 15 May 2013.

AK71 said...

Indicative results for Myanmar airports to arrive earlier.

Yongnam’s consortium announced the formal submission of its bid for
the new Hanthawaddy International Airport in Myanmar last week.

This follows upon the bid to extend the existing Yangon International Airport, which was submitted a month earlier.

Based on our latest info, the
indicative results for both will come sooner than earlier expected.

Award for Yangon extension may arrive any moment. Due to the urgent need to ease congestion at Yangon Airport, we understand the authorities are anxious to start construction. The award for this bid is expected any moment from now. Separately, we now expect indicative results for Hanthawaddy by July this year, when the government will enter into direct negotiation with 1 or 2 preferred bidders.

We now estimate Yongnam’s consortium has a 50% chance of winning the Yangon project, and we add SGD0.045 to our TP based on this probability. We assign this high probability due to the consortium’s standout combination of technical expertise, track record and friendly government ties.

Yongnam has an outsized voice in this consortium due to the structure, and should pick up significant construction work.

TP: 48.5c


Maybank Kim Eng, 4 June 2013.

AK71 said...

- We believe Yongnam’s consortium is a strong contender for Myanmar’s airport projects.

- Yangon’s airport project win could add S$0.12 upside to the stock price.

- Current valuations are not reflecting that Yongnam is a strong contender for the projects.

- Upgrade to BUY with higher TP of S$0.41.


DBS Vickers, 31 May 2013.

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