Structural steel specialist TTJ Holdings reported a strong set of results for 9MFY14, with PATMI growing 58.7% y-o-y to SGD16.1m. The strong performance was contributed by both its structural steel and dormitory businesses.
Given the growing construction activities, we remain positive on rising demand for structural steel and dormitories in Singapore.
We prefer exposure to Yongnam Holdings (YNH SP, BUY, TP SGD0.29), the largest structural steel player in Singapore, as a proxy to growing construction activities. Trading at 0.95x P/BV, YNH’s valuation seems undemanding. For YNH, catalysts ahead include a potential earnings turnaround in 2HFY14.
Among dormitory players, we prefer exposure to Centurion Corp (CENT SP, BUY, TP SGD0.88), Singapore’s largest dormitory player with 23,400 beds. CENT is currently trading at 22% discount to our DCF-based fair value estimate of SGD0.88. For CENT, catalysts ahead include the ramp-up of bed capacity in Singapore and Malaysia.
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