Yongnam Holdings Ltd

This seems like a promising construction stock. Infrastructure boom is definitely gonna impact profits this year. Anyone has any interesting insights to share pls?

This is a stock that came from the graveyard and now a reborned stock. I fully agreed that construction stocks should be well insulated from the economic downturn given the huge amount of infrastructure stimulus package that the Singapore government is coming up with.... They are building that S$ 5 billion Marina expressway, hospitals, schools etc.... Yongnam should be able to secure quite a few of those projects. Sit tight!!

if u refer to the article at www.nextinsight.net/content/view/854/60/ you will come across an intriguing statement that the company told Reuters it is expecting $1 billion worth of orders this year. This at a time when the order book was last known to be $250 million.

Check out today\'s 1st q results! 2 times profit!

The Singapore construction sector is likely to be one of the very few sectors to show growth this year. The Singapore government is pumping in S$1 billion into infrastructure projects such as the Marina Highway, North Hospital etc. This should benefit the construction companies and construction material suppliers. Companies in the construction sector should benefit; Hor Kew BRC ASIA Koon Holdings Wee Hur Chip Eng Seng Sim Lian HG Metal Hup Steel BBR

I quote Sebastian Chong in his newsletter to his subscribers:

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> I certainly like Yongnam, Singapore’s largest player in steel struts and civil and structural engineering consultancy services for infrastructure construction projects, whether they be subway or above ground rail and road construction or demanding property projects like the Marina Sands IR complex. Yongnam is currently involved in Dubai’s MRT mega project and is at an advanced stage of involvement in the building of Delhi’s huge new international airport. Yongnam has already clinched high value awards for Singapore’s Marina Coastal Expressway (a 10-lane expressway including a very long tunnel of which a major stretch goes well under the seabed. Yongnam will also benefit from the Singapore government’s heavy investment in other expressway projects and new MRT lines in Singapore over the next 9 years. Yongnam has a strong balance sheet and its businesses are highly scalable both in Singapore and overseas. Its reputation overseas has grown strongly in recent years with more and more challenging projects at easily competitive prices. The net operating profit margin after tax is a sustainable 10% and that is considered as high for the industry. There is of course a risk that it may mess up a project as it takes on more and more challenging projects. But if we do not put more than 10% of our portfolio into this stock, the risk-reward ratio is worth it. Currently at 22.5 cents, I see the stock price hitting a high of $1 within 36 months. For the more risk loving investors, a small exposure to Yongnam’s 2012 Dec 14 warrant looks very attractive at the current price of 4.5 cents. I had earlier announced in the Shareowl forums that I first went into the warrant at 1 cent (when the mother was trading at 5 cents in late October 2008). I later added much more at 1.5 cts and finally another whack at 3 cents just weeks ago. My total exposure to the warrant is still a small part of my equities portfolio and hence I am not taking too much risk. The exercise price of the warrant is 25 cents which is just 2.5 cents above the current share price. After Yongnam’s share price goes above 30 cents, the warrant might just move up cent for cent with further share price appreciation. When Yongnam’s share price hits $1.00 before Dec 2012, the warrant could trade at 72 cents (i.e. at a small discount because the gearing becomes low and the discount is required for funds that buy the warrants in order to exercise their right to convert them into shares right away.) But always remember that holding a warrant is always more risky than holding the mother share. Therefore keep your exposure to warrants very small. For the mother share, I would limit my exposure to 10% of my portfolio. But for this warrant, I would limit it to 3% of my portfolio.