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Yongnam: Substantial shareholder increased stake.

Sunday, November 10, 2013

Delta Lloyd Asset Management on 31 October 2013 bought 1,231,000 shares.

Price? 24.08c a piece.

They now have a total of 115,089,000 shares or a 9.08% interest.


I first made mention of Delta Lloyd Asset Management in the comments section of my blog in January this year and it seems that they have been a persistent buyer. I have probably missed quite a few instances of buying by them since then.

See my comments on their buying activities as well as their rationale for investing in Yongnam (translated from Dutch to English): here.

Related post:
Yongnam: Profit guidance.

20 comments:

Solace said...

AK got it lower than them by 0.08c.

o_O hahaha

AK71 said...

Hi Solace,

Always a good feeling to get a better deal. Congratulations! :D

boonchin.ng said...

Queued @ $0.24 for past few days. Looks like strong support @ $0.245. Maybe should just ignore the $0.005 ...

AK71 said...

Hi boonchin,

If I remember correctly, Yongnam's NAV per share is about 26c. Anything below that would represent a discount.

Technically, it looks like its share price has found a floor and if this should break, the next level of support is at 22c thereabouts. So, downside, if any, does seem limited. :)

Online Philip said...

Is it allowed to trade if the person is not living SG? thanks

AK71 said...

Hi Philip,

The substantial shareholder I mentioned in this blog post is Dutch. I don't think there is a problem with foreigners buying Yongnam's stock. :)

Best to check with your stock broker though. ;)

jisare said...

Hi AK71,

Thank you for the update and the whole blog. I learn a lot of business insights here.

I need some help from you on yongnam.
I take a very brief cross check on yongnam's earrnings quality by income, balance sheet and cash flow. I used the data from morning star.
from 2008-2012 5 year period,
income is 230m
fixed asset increase by 200m
long term debt decrease by 40m
dividend is 20m
plus some current asset and liability change, the numbers round up quite nicely.
this means a significant portion of earnings go to fixed asset.
so valuing these fixed asset become utterly important.
so can yongnam sell the fixed asset consistently at a profit? is there any significant asset sale event I can refer to? or how much does it cost the competitors to build these asset?
really appreciate it if you may share some of your relevant knowledge.

AK71 said...

Hi jisare,

Yongnam owns one of the largest inventories of reusable steel struts outside Japan and they have been building this inventory over many years.

It is very expensive to have what Yongnam owns today and this presents a high barrier to would be competitors.

If these assets were to be valued based on today's prices (i.e. what it would cost to build these struts today), Yongnam's NAV/share could be much higher. :)

Reported NAV/share at 26c is, I believe, conservative. At 25c a share, the stock is undervalued.

Solace said...

Yongnam Holdings said on Monday that it had secured a record $168 million subcontract through its wholly owned subsidiary, Yongnam Engineering & Construction Pte Ltd. Yongnam will fabricate and construct a record of almost 30,000 tonnes of structural steelwork for Marina One, a mixed-use development located at Marina South, Singapore's new Central Business District.

:) :) :)

SOLIDCORE said...

Hi AK,

Congrats on benefitting from Yongnam's record contract deal as well.

At 26cents today, that's a very delicious ~10% gain from 24 :)

Cheers and hope to see it up up and away!

AK71 said...

Hi Solace,

Hey, thanks for the update. I really appreciate it.

I haven't had time to look at the stock market in the last few days and probably the next couple of days too.

Keep me posted, ok? Thanks again. :)

AK71 said...

Hi Solidcore,

I am glad I made use of Mr. Market's depression over Yongnam to add to my long position in the stock. :)

I have blogged quite extensively about Yongnam and although I believe that my analysis is sound, only time will tell if I am right.

The way I look at it, Yongnam is going to be kept quite busy till 2030. Everything remaining equal, it is a good idea to make use of market weakness to accumulate.

AK71 said...

Yongnam secured a S$168m subcontract for the Marine One mixed-used development located at Marina South, which is a record
deal in both value and structural steelwork quantity.

Marina One is developed by M+S, a joint venture between Singapore's Temasek and Malaysia's Khazanah.

Project will commence in 4Q2013 and likely be completed by 1Q2016, which means Yongnam will be recognising revenue and profits pertaining to this project
over 2.5 years.

The secured deal bumps up Yongnam's order book to S$397m,
and this figure represents 1.3x FY12's revenue.

Yongnam currently trades at
0.93x P/B.


Source: OSK-DMG

boonchin.ng said...

Hi AK,

What's your view on Hafary? High dividend and low PE, and benefits from being a key tile supplier to the HDB BTO. Or I'm missing something?

Thanks!

AK71 said...

Hi boonchin,

Hafary is in a cyclical industry. It can be a good investment if we get the timing right.

So, the question to ask is how much longer can the good times last for Hafary especially if the single biggest reason for it doing so well is the HDB flats construction boom.

Will the construction boom come to an end? If so, when? Will Hafary be able to sustain its growth after this? All pertinent questions. :)

Becker said...

Hope you can share with me whether the following information is true?

Is it true that once the company issued dividend. The share price will drop?

AK71 said...

Hi Becker,

Fundamentally, the NAV should decline by a similar quantum. :)

Whether share price would decline or not is a function of market sentiments. It is much harder to say.

If Mr. Market should feel very optimistic about a company's prospects, share price could rise even after it has gone XD. ;)

boonchin.ng said...

Hi AK,

Your crystal is good (referring to your reply on Hafary) :)

Not QE tapering, but HDB tapering ...
http://business.asiaone.com/news/hdb-begin-tapering-construction-programme-2014-khaw-boon-wan

AK71 said...

Hi boonchin,

I shared this earlier last evening on my Facebook wall too. :)

The HDB building boom will come to a stop. It makes sense. Otherwise, HDB flats will see their values plummet. Not good for most.

AK71 said...

Yongnam Holdings said the consortium comprising Changi Airport Planners and Engineers (CAPE), JGC Corporation (JGC) and itself, has received an invitation from the Department of Civil Aviation (DCA) of Myanmar to enter into negotiation on the design, construction, operation and maintenance of Hanthawaddy International Airport (HIA) and its facilities on the basis of a public-private partnership agreement for a 30-year concession period.

Source:
http://www.theedgesingapore.com/the-daily-edge/business/47139-yongnam-consortium-gets-2nd-chance-to-negotiate-for-hanthawaddy-international-airport-contract.html

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