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Yongnam: A bad 2014. Could 2015 be better?

Monday, March 2, 2015

When I first invested in Yongnam, it was beginning to reward shareholders by paying dividends and being the biggest outside of Japan in what they do, I decided that they probably had a competitive advantage over smaller players.

Consistent with Yongnam's new direction to invest in infrastructural projects that would generate recurring income, together with two partners, it submitted a tender for the construction and operation of an international airport in Myanmar. I rather liked this new direction.

However, when Yongnam's share price was driven up on speculation that their consortium would clinch the project in Myanmar, I divested most of my investment in the company. Price had gone up not because of some fundamental improvements. It went up based on speculative pressure. As it turned out, Yongnam et. al. was unsuccessful in clinching the project that time.

Subsequently, Yongnam suffered setbacks in its business and its stock price tumbled. I added to my reduced long position when my initial purchase price was hit. Basically, by then, my long position in Yongnam was funded by capital gains from trading its stock as well as the dividends paid by the company.

I was willing to stay invested because I felt that the setbacks were project based and should be temporary. The weaker results were not due to some destructive force which was more enduring in nature. Given time, things should improve again, I thought.




Well, instead of the improvement in results I was expecting, a bigger loss was announced months later. In a blog post in August last year, I said I would not be adding to my investment as Yongnam's attractiveness as an investment for income and growth was undermined. The stock was trading at 22c a share back then and it didn't look like it would be able to pay a dividend. As expected, no dividend was announced in its full year results.

At that time, I said that I would like to see Yongnam's order book improving and if it did not, I might have to trim my exposure. Businesses like Yongnam's need to constantly replenish their order books. As long as Yongnam has new orders, it will have earnings visibility if nothing goes wrong.

In its latest results, Yongnam announced that, as of end December 2014, its order book stood at $405 million. This is an improvement over end December 2013 which saw order book at $340 million. The improvement is a relief for shareholders.




Although Yongnam with its two partners secured the mega project in Myanmar, this still remains a wild card for now. We might remember how Yongnam's stock price rallied briefly when the announcement was made a few months ago. The rally sputtered and the stock price resumed its slide downwards.

This is probably because it remains to be seen what are the details and terms of the public-private partnership agreement with a 30 year concession for the international airport project in Myanmar. In Yongnam's recent full year statement, it is stated that discussion is still underway.

Naturally, the project will require funding and will take time to complete. The Myanmar government will get a US$700 million low interest rate loan from the Japanese government while the consortium will secure about US$520 million in loans from private lenders as well as use internal resources in the construction of the airport. The airport will take about 4 years to complete construction. This project is likely to make material contributions to Yongnam's performance once it gets off the ground.

So, taking everything into consideration plus the fact that I am already holding on to a much reduced long position in Yongnam compared to the time when I was invested in it for income and growth, I decided to increase my long position in Yongnam today after its stock took a beating and price tested an important support level I identified.

Buying in at 16.1c per share represents a 32% discount to Yongnam's NAV and it also marks my first purchase of its stock in quite a while.

Yongnam had a terrible 2014 but could 2015 and beyond be better?

See financial statement: here.

Related posts:
1. Yongnam: Investing in infrastructural development.
2. Portfolio review: Unexpectedly eventful.
3. Managing exposure in AK's investment portfolio.

85 comments:

Derren Ang said...

Hi AK,
It may be a while before awarded contact follow by in coming cash flow.
Current projects may incurred extra costs, that lead to it losses, as I observed in one of its job site.
One Requires patience and high tolerance for yongnam.

AK71 said...

Hi Derren,

I am careful to size my position in Yongnam so that it does not cause me to lose sleep at night. It has definitely become a more speculative position and based on the allocation pyramid, it can only be a very small percentage of my portfolio. :)

A falling knife? Yes, quite likely. -.-"

Sillyinvestor said...

Hi AK,

Yongnam's blood on the street?

AK71 said...

Hi Mike,

Quite a bit of blood on the street but I am not sure whose? Ouch, I think I just suffered a paper cut... -.-"

seefei said...

i Q at 16.1 cts this morning, adding to my holding. it is just a slight re-balancing of my portfolio. had trimmed some developers and reits shares at the last highs & reinvesting into my other holdings which are in their lows.

as AK had said, price may move lower but hopefully the margin of safety is higher at this price range. lol.

AK71 said...

Hi seefei,

Technically, Yongnam is sitting in a band of support from 16c to 16.3. Will have to wait and see if this support level holds. :)

jfree said...

Ge Ge!

yong nam today drop until quite jialat at a price of 0.155. whats your take?

jeffrey :D

AK71 said...

Hi jfree,

The technical picture is ugly. It is quite obvious that the trend is firmly down. On hindsight, I should have waited instead of buying at 16.1c. I need to remind myself not to go against the trend. -.-"

It also makes sense to wait because we want more details regarding the airport project in Myanmar. Then, it will be easier to see how it could benefit Yongnam in more certain terms. ;)

ozxinvest said...

Perhaps 11.8c is a better entry price?

AK71 said...

Hi ozxinvest,

I caught a falling knife at 16.1c, it would seem. ;p

Anyway, I don't know how low the stock price would fall to. The downtrend is very much intact. Could it hit 11.8c a share? I don't know. It might. -.-"

Wei Xiong How said...

I caught some knives at 0.156. Will be grabbing more knives if it reaches 0.118!

AK71 said...

Hi Wei Xiong,

Although I am really only risking my gains from past trades and investment in Yongnam, the relentless downtrend is a bit worrying.

If their numbers are stronger, that would give me more confidence to be a contrarian but they are pretty weak. Everything hinges on their future performance. So, it is about taking a leap of faith which is why I ended the blog post with a question.

With a stronger speculative flavour now, I will have to remind myself that a smaller position which is what I have now is appropriate. ;)

Steven Yap said...

Hi AK,

Today Yongnam share price dropped another 5% plus.

Looking at the recent financial report, i see 2 problems. Firstly, it has about 80mil of debt due by end of 2015. Secondly, it currently has available cash on hand of about 6mil only.

With the upcoming airport project in Myanmar, it will most certainly need to borrow more.

Interest rate is likely going up this year, which will in turn increase cost of borrowings.

Looking at the current debt due to be repaid and upcoming borrowings for the airport project, i guess all these conditions weight very heavily on the stock price.

Likely Yongnam will need to do something drastic to get the money to fulfill all the commitments due this year.

Yongnam do have lots of order books to fulfill for a few years to come, so it does have a good future with lots of revenue.

I hope all vested will be patient enough to endure 2015. Good Luck. :)


Best Regards,
Steven

AK71 said...

Hi Steven,

Balance sheet strength is definitely lacking. No doubt about it.

In instances like this, it is good to be reminded that sizing our positions appropriately is very important.

Investment Articles said...

When the price was at 0.17, i was thinking to cut loss. But i didn't do it and it is even no point to cut loss now. I will hold it till I see the light at the end of tunnel. If the price goes down more significantly, i will buy more and average down my cost. Just hope yongnam can bid more projects this year and get a good deal in the project in Hanthawaddy Intl Airport.

Steven Yap said...

Hi AK,

Agreed. Sizing positions is very important here. Actually, sizing positions is very important everywhere. :)


Best Regards,
Steven

AK71 said...

A joint venture involving Singapore's Yongnam Engineering and Construction has clinched a S$159 million contract to build the JTC Food Hub @ Senoko, parent company Yongnam Holdings Limited said on Monday (Mar 9).

Yongnam Engineering has a 51 per cent stake in the joint venture, while Jian Huang Construction Co holds the remaining 49 per cent.


Source:
http://www.channelnewsasia.com/news/business/singapore/yongnam-jv-wins-contract/1704050.html

Steven Yap said...

Yongnam closed at 14cents today...

AK71 said...

Hi Steven,

There is a lot of pessimism here. Whether the pessimism is justifiable or not is harder to say because it is true that Yongnam's balance sheet is rather weak.

Mr. Market could push the share price down lower, of course. The downtrend is clear. So, I am watching in a detached manner and waiting for signs of a reversal before adding as every single support identified earlier has broken.

Wei Xiong How said...

Care to share what are the reversal signs you are looking for? I would hazard a guess of decreasing volume?

AK71 said...

Hi Wei Xiong,

It will be the classic reversal signals we learn in technical analysis. Nothing magical.

However, it would be good to look for them in the Weekly charts as well as that might indicate a firmer, longer term reversal. Reversal signals on the Daily chart could signal a trading opportunity and not something more enduring.

I am staying sidelined for the moment as it doesn't make sense to keep adding to a persistent down-trending position, no matter what we think the fundamentals are.

Steven Yap said...

Hi AK,

Yongnam just hit 0.135...
Wonder whats wrong now...


Best Regards,
Steven

AK71 said...

Hi Steven,

Your guess is as good as mine...

It is almost impossible to see what is on Mr. Market's mind but he is responsible for the daily price movements in the stock market. -.-"

Steven Yap said...

Hi AK,

Looking at a price of 13.5 cents, Yongnam presents a very good price for entry vs its nav. But i didnt see the technical indicators yet. Please treat it as i am talking to myself also.

It has a healthy book order and secured a few major projects to last it through 2018 and beyond.

If it can get a good loan with low interest to support its projects in this current climate, i m sure its share price should rocket very fast and very quickly lol.


Best Regards,
Steven

AK71 said...

Hi Steven,

I am inclined to agree with you. Yongnam has been replenishing their order book. It is at a very healthy level now.

I am sure that Mr. Market is concerned with their balance sheet strength because almost certainly, they must take on more debt to undertake the many new projects which they have won in recent times.

There is also no certainty that they will not suffer any cost overruns and I have to admit that their track record since the building of the Sports Hub has been patchy.

Having said this, I am holding on to my long position because they have had a very good track record for many years and they could have just been afflicted with rather bad luck recently.

I am not adding to my position because, technically, the down trend is persistent and, fundamentally, it is harder to tell if their streak of poor operational performance is going to continue.

I will add to my position if, technically, there are signs of a reversal and if there are signs that, fundamentally, things are going their way.

ted said...

There's a share consolidation (4:1) discarding fractional shares, announced on 13 MAR 2015.
Maybe that's one of the reasons market is so beh song?

AK71 said...

Hi ted,

The share consolidation has to happen sooner or later because of new regulations from SGX. However, it shouldn't affect the valuation of the stock.

AK71 said...

This is good to share as I am too lazy to do a blog post:

Dear AK,

I read your article: “荣南控股的表现是否会在2015年改善?”which dated 03/03/2015. I had almost agreed with all your comments and bought 50 lots at 15.00 cents.

The P/B is 0.57 right now but it is still going down. And no any action from the company.

Why someone push it down for months? looking to privatize or buy Yongnam ?

I’m quite interested in your view of points.

Thanks & Best Wishes,


My reply:

Yongnam's balance sheet is not strong. That is probably a major concern for many investors now.

So, although their order book is healthy now, question remains with regards to financing especially with the airport project in Myanmar. The details regarding financing needs to be detailed.

Mr. Market is probably looking for signs that Yongnam will not run into financing issues although I feel that they could probably leverage up as their gearing level is not very high now.

I am not adding for now, given the murky conditions. I will wait for more clarity in order to make a better informed decision.

Thai Amulets said...

Up up... price increasing! Should be getting some on monday! :)

Wei Xiong How said...

Hi AK, yongnam moving up strongly to 0.168. Looks like a trend reversal to you?

AK71 said...

Hi Wei Xiong,

It does look promising, doesn't it? ;)

I am staying invested because the international airport project in Myanmar is going to be a game changer for Yongnam if well executed.

How will things turn out from now till completion of the construction of the airport? I don't know.

However, my current position is not big relative to my portfolio size and I am quite comfortable to hold on to it for now. :)

SeeKay Go said...

Hi AK,

Yongnam share price went down a lot recently, and it seems to be still in down trend.

What's your insight about this? Should we hold on to it, nibbling or divest?

AK71 said...

Hi SeeKay,

Oh, I will not tell people whether to hold, divest or buy more. It is not my style. What we do depends very much on our circumstances and our motivations.

For me, Yongnam has moved from a growth + income investment to something that is speculative. So, I am careful to size it appropriately. My current position is a size that will not cause me to lose sleep at night.

SeeKay Go said...

Hi AK,

Noticed that Yongnam counter status changed to BI (BuyIn) only.

Do you know what's happening with this counter?

AK71 said...

Hi SeeKay,

Yongnam had a 4 to 1 share consolidation exercise. So, you have to add the new "Yongnam Hldg" to your watchlist now. :)

SeeKay Go said...

Hi AK,

Thanks for sharing.

Can't find in SGX.com about the actual date of the consolidation took place. Only stated about AGM on 28th April to approve the share consolidation. But I briefly recalled it was consolidated a few days back?

Recent volatile movement of this counter caught my attention. Overall company financial health still weak it seems.

Yongnam Holdings Limited reported group earnings results for the first quarter ended March 31, 2015. For the quarter, the company reported revenue of SGD 65.9 million compared to SGD 71.8 million a year ago. Profit before tax was SGD 1.0 million compared to loss before tax of SGD 2.5 million a year ago. Profit attributable to shareholders was SGD 0.7 million compared to loss attributable to shareholders of SGD 1.9 million a year ago. Basic earnings per share were 0.06 cents compared to basic loss per share of 0.15 cents a year ago. NAV per share was 23.72 cents compared to 23.68 cents a year ago. Net cash flows used in operating activities of SGD 18,054,000 compared to net cash flows from operating activities of SGD 1,021,000 a year ago. Purchase of property, plant & equipment was SGD 5,088,000 compared to SGD 6,516,000 a year ago.

I have a substantial of Yongnam shares in my current portfolio (approx 30% of my total investment portfolio).

Thinking of nibbling during low price to average out the overall loss.

What's your thoughts about this?

Thanks.

SeeKay Go said...

Hi AK,

Based on SGX charting, the consolidation date should be 19th May.

Thanks.

AK71 said...

Hi SeeKay,

Things are beginning to look less bad for Yongnam. :)

To be about 30% of your portfolio is rather significant. For me to have that kind of exposure to any business, I must be very confident in its ability to generate income for me.

My exposure to Yongnam is a shadow of what it used to be. If I remember correctly, it used to be about 10% of my entire portfolio. I sold most of my investment some time back.

Now, I am waiting for greater clarity especially with regards to funding for their JV in Myanmar before deciding whether to accumulate.

Nightmare_Angel said...

OMG what is happening to this stock? Too much speculation causing the stock to drop? :(

Fundamentals and future still looks good to me.

AK71 said...

Hi Nightmare Angel,

Yongnam's weak balance sheet is probably causing some concern for Mr. Market.

Winning the airport project in Myanmar is a positive but from now till completion will take a number of years. In that time, Yongnam will have to keep its head above water and it has to demonstrate its ability to do so in order to win Mr. Market's favour again.

I have not been adding to my long position in Yongnam for a while. I will wait and see for now.

Wei Xiong How said...

Touched 42cents today!!! With the weak balance sheet, is there any real concern for solvency of Yongnam? One saving grace I see is the healthy order book which will keep them busy. Only not sure if they can avoid cost overruns and maintain a profit margin from their current projects.

@AK - are you waiting for more visibility on details on the Myanmar Airport project? Or what other things could signal a turnaround? seems like FY15 will be a tough year for them.

AK71 said...

Hi Wei Xiong,

I just talked to a friend earlier that Yongnam is now more speculative an investment than Marco Polo Marine. At least with Marco Polo Marine, I know that their OSV business is chugging along nicely.

We know also that Cabotage Laws will include rigs in the new year and foreign flagged rigs will be evicted from Indonesian waters. Investing in Marco Polo Marine has a certain level of risk but it is a calculated risk.

With Yongnam, there are too many unknowns. I want clearer signs of profitability from Yongnam, more meaningful project wins and a greater certainty with regards to execution of the Myanmar Airport project. I don't have a good handle on it now. So, it is best to wait and see which also means that I have not given up on Yongnam yet. ;)

Kelvin said...

Yo AK,

This is an old friend in my portfolio but a small portion. Hope to see this friend well again in the future too :P

AK71 said...

Hi Kelvin,

Yes, I would count Yongnam as an old friend who was good to me once upon a time. This friend has fallen on hard times and entering unchartered waters. A small position is what I have now too. ;)

AK71 said...

"Structural steelworks specialist Yongnam posted earnings of $2.1 million for 2Q2015, reversing from net losses of $5.3million a year earlier.

"This marks the group’s second consecutive quarter of earnings growth since it returned to profitability in 1Q2015.

"Revenue grew 14.7% to $70.7 million, as its structural steelworks segment posted a 40% surge in revenue to $44.4 million on the back of projects such as Marina One and Changi Airport Terminal 4.

"Revenue contribution from its specialist civil engineering segment fell 14.1% to $25.6 million, with the substantial completion of the Downtown Line 2 in 2014. Ongoing projects during the quarter include MRT Downtown Line 3, Thomson Line and the Hong Kong MTR.

"Yongnam says that the outlook for infrastructure development, civil engineering services and commercial projects is expected to remain positive, backed by the renewal and expansion of urban infrastructure in Singapore and the region.

"It is pursuing $1.2 billion worth of new infrastructural and commercial projects in Singapore, Hong Kong, Malaysia and the Middle East. Yongnam’s order book stands at $453 million as at end-June, with project completions stretching to end-FY2015."

Source:
http://www.theedgemarkets.com/sg/article/yongnam-posts-second-consecutive-quarter-earnings-growth

Wei Xiong How said...

Thanks AK for the update! Hopefully profitability will further improve given that Yongnam is being kept busy with the numerous projects.

AK71 said...

Hi Wei Xiong,

I am crossing my fingers here. Let us hope that there won't be a repeat of history with massive cost overruns. Execution is key.

Wei Xiong How said...

Hi AK, new update. maybe seeing the light at end of the tunnel?

Yongnam Holdings Limited (“Yongnam” or the
“Group”), a well-established structural steel contractor and specialist civil engineering
solutions provider, today reported a net profit of S$2.0 million for the three months
ended September 30, 2015 (“3Q2015”), reversing from a net loss of S$8.4 million in
the corresponding financial period (“3Q2014”). This was achieved on the back of a
59.6% jump in revenue to S$75.5 million over the same period.

AK71 said...

Hi Wei Xiong,

I am keeping an eye on Yongnam too. I see the improvement and I would like to see if it is sustained. Probably explains why there has been insider buying. :)

Solace said...

These 2 days revisited an "old stock" in my portfolio.

YONGNAM WINS FOUR CONTRACTS WORTH S$69.8 MILLION IN SINGAPORE
AND THE MIDDLE EAST
- Two structural steelwork subcontracts for Jewel Changi Airport and the
Robinson Tower Development in Singapore
- Two supply and fabrication projects for power plants in Qatar and Egypt

http://infopub.sgx.com/FileOpen/YHL-News_Release-24_Feb_2016.ashx?App=Announcement&FileID=390820

JGC-YONGNAM-CAI CONSORTIUM SIGNS FRAMEWORK AGREEMENT FOR
HANTHAWADDY INTERNATIONAL AIRPORT PROJECT

http://infopub.sgx.com/FileOpen/YHL-Update_Announcement-HIA_FA-1_Feb_2016.ashx?App=Announcement&FileID=387988


Seeing new contracts and the framework for Myanmar airport being finalized is a good thing. The execution on how to bring it to profitability is key. After all, for such a stock, the earning are very much projects based and less recurring in nature. Stock price reacts accordingly to its projects earning potential.

Keep an watchful on its execution.

ho2786 said...

This is a crap stock.

Wei Xiong How said...

Hi AK, any thoughts on the FY15 results? Earnings reversal to positive and order book continue to be stable. However, the share price movement is still muted given the market recovery last week.

AK71 said...

Hi Wei Xiong,

Sentiments are weak and penny stocks with weaker balance sheets are not favoured.

I won't be too hasty to write this one off. Staying vested but not adding.

AK71 said...

Yongnam Holdings Limited is proposing to undertake a renounceable partially-underwritten rights issue of up to 161,026,441 new ordinary shares in the capital of the Company, at an issue price of S$0.21 for each Rights Share, on the basis of 1 Rights Share for every 2 existing ordinary shares in the capital of the Company held by shareholders of the Company as at a time and date to be determined by the directors of the Company...

Source:
http://yongnam.listedcompany.com/news.html/id/530814

Nightmare_Angel said...

hmm...right issue when company's balance sheet and sentiments are weak. Fundamentals still look okie but not keen to add more. AK you adding more? :p

AK71 said...

Hi Nightmare Angel,

The last time I added to my long position was at the date of this blog post more than a year ago. Nothing since then.

I will probably subscribe to my rights entitlement.

SeeKay Go said...

Hi AK,

Mind to share how are we going to subscribe to rights entitlement? Could it be done via ATM or Internet banking?

Thanks.

AK71 said...

Hi SeeKay,

We will be receiving a package from the CDP with instructions. So, keep a look out for it. I usually go to the ATMs.

You might want to search my blog for past "rights issue" and get a feel. :)

SeeKay Go said...

Hi AK,

Thanks for replying.

Referring to the announcement

NOTICE IS HEREBY GIVEN that the register of members and share transfer books of the Company
will be closed at 5.00 p.m. (Singapore time) on 9 June 2016 (the “Books Closure Date”) for the purposes of determining the provisional allotments of Rights Shares of Entitled Shareholders (being
Entitled Depositors and Entitled Scripholders) under the Rights Issue.

I went to ATM machine but it seems that Yongnam right issue has stated yet? From the statement, it seems that last day of exercising our rights issue is 9 June 2016, right?

Thanks.

AK71 said...

Hi SeeKay,

Only people who are shareholders when the books close on 9 June will be alloted rights. We will have ample time after that date to subscribe.

Don't worry. Wait for the package from the CDP. ;)

AK71 said...

LT
You going to apply for the right issue??

Assi AK
I will probably take up my entitlement.

LT
Ohhhh!! You really trust the management

Assi AK
LOL
I dun think so
I have a very small position in YN

LT
Hahaha

Assi AK
I have classed it as a speculative position for some time
It stays speculative

LT
Now more volatile cos of rights.... But investor just got consolidated
Bo hua if consolidated again

Assi AK
Whether hua or bo hua, we have to look at the underlying value. Stock splits or consolidations do nothing to affect the underlying value.

SeeKay Go said...

Hi AK,

Are you planning of exercising excess rights in this case?

AK71 said...

Hi SeeKay,

Stretching my speculative position a bit more? Yes, probably. ;)

Ray said...

Hi AK,

Yongnam's right shares are priced at issue price of S$0.21.
Currently Yongnam is trading at $0.22.

What's the incentive of the rights share?

AK71 said...

Hi Ray,

As long as Yongnam is trading at a price higher than the proposed rights, for anyone who does not wish to have his stake diluted, accepting the rights is still a better idea.

Ray said...

right...., just to check i'm not understanding it wrongly:

If we wish to "accept" the rights shares, we got to pay for $0.21 per share.

right?

AK71 said...

Hi Ray,

I believe you are right. :)

SeeKay Go said...

Hi AK,

I am entitled to rights issue of 6,250 shares, and planning of subscribing an additional 6,250 excess rights? Will I be able to do that? When and how I would be notified whether my excess rights subscription is granted or not?

Thanks.

AK71 said...

Hi SeeKay,

Yes, we could try for excess rights. The option is available.

The CDP will send us a note in the mail some time after the rights issue closes. We will surely know then. :)

ZK81 said...
This comment has been removed by the author.
ZK81 said...

For 2016 to date, the contracts win amount to about 149M and signing of framework agreement for Hanthawaddy Airport. Not too sure how the share price will behave upon commencement of right share in July. Any views?

AK71 said...

Hi ZK,

I certainly don't know how share prices will move.

What I do know is that things have been looking up for Yongnam in recent months. I hope that with their balance sheet strengthened with the rights issue, Yongnam will now concentrate on the successful execution of each project. I will wait and see.

ZK81 said...

AK,

Thanks. I had applied for the rights. See how it goes.

raven said...

Hi AK,

Given that the current shares price is hovering around the rights issue price +-0.005 and so there wouldn't be a demand for the rights on the market, wouldn't most people let their rights expire? Unless they feel that Yongnam is a value buy at $0.21 even in this volatile environment with the Brexit and all?

raven said...

In this case, would Yongnam be able to raise much capital from this rights issue exercise? Will they need to do another fund raising exercise that is less favorable for the small investors?

AK71 said...

Hi raven,

I don't think anyone can tell with certainty what Mr. Market thinks. As for whether Yongnam might do more equity fund raising in future, I certainly don't know. Please see my earlier reply to ZK81 on what I do know. ;)

AK71 said...

SINGAPORE (July 1):
Yongnam Holdings has received applications for 109 million rights shares at the close of its rights issue on June 28.

That's 68.8% of the 158.4 million shares that were available for subscription.

The remaining 49.4 million shares which were not taken up will be subscribed by CIMB Securities, the underwriter of the right issue exercise.

Yongnam raised net proceeds of about $32.6 million, after excluding the estimated expenses of $0.7 million, from the rights issue and intends to use them for general working capital purposes.

JustBe said...

Hi AK,

Even though the rights issue was under-subscribed, I do feel a certain momentum building with YN, with contract wins, a rather healthy order book, and the Myanmar project on the horizon. Wonder if YN has its best days ahead of it...?

AK71 said...

Hi JustBe,

I don't know if the best days are ahead of Yongnam but, all else remaining equal and if the momentum keeps up, better days are definitely ahead. ;)

kh said...

Hi AK,

Do you think that Yongnam overbidded for their structural steel projects? Seems like even though 69.2M has recognized in the structural steel segment for the latest qtr result, they are unable to make their bottom-line better? Their track record for civil engineering is much more better imo.

Also, do you have any concerns on Gross amt due from customer? It has lingered above $100M after 2012.

kh

kh said...

Hi AK,

Do you think that Yongnam overbidded for their structural steel projects? Seems like even though 69.2M has recognized in the structural steel segment for the latest qtr result, they are unable to make their bottom-line better? Their track record for civil engineering is much more better imo.

Also, do you have any concerns on Gross amt due from customer? It has lingered above $100M after 2012.

kh

AK71 said...

Hi kh,

It is clear from the numbers that Yongnam is having a hard time. It isn't the animal it was a few years ago. Although I expect government spending on infrastructure to continue and that Yongnam will benefit, the competition from foreign construction companies will keep earnings under pressure.

ZK81 said...

If the Hanthawaddy International Airport goes ahead in early 2017, Yongnam should benefit from it

Myanmar moves ahead on airport.
http://www.ttrweekly.com/site/2016/12/myanmar-moves-ahead-on-airport/


ZK81 said...

If Hanthawaddy International Airport project goes ahead in early 2017, Yongnam should benefit from it.

Myanmar moves ahead on airport.
http://www.ttrweekly.com/site/2016/12/myanmar-moves-ahead-on-airport/

AK71 said...

Hi ZK81,

Thanks for sharing the good news. :)

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