Yongnam Holdings Ltd

I think Lian Beng is a better bet with Order book of S$820 million... enough job to keep them busy till 2013. Property market is still hot despite government measures... and any new project secure is going further increases revenue and probably extend till 2014. What do you think?

Director just sold his entire holdings of 500,000 shares for 0.275. Fully valued for now, perhaps? www.sgx.com/wps/portal/marketplace/mp-en...2dBISEvZ0FBIS9nQSEh/

Not to worry about it. Director who sold 500,000 shares is LIEW JAT YUEN, RICHARD, a Non-Executive and Independent Director Professor Liew, 47, is a world renowned expert in steel and composite structures. He had recently excercised his options at 8 cents, and probably sold at 27 cents. Made a $95,000 profit. As for valuation, I think Yongnam is fairly valued already. But if it announces a slew of big contracts in the weeks or months ahead, the stock should easily go above 30 cents. I expect it to announce contract awards as it has put in bids for over $1 billion worth of work.

It is not really a concern for someone who sold the shares in most of the cases, 500 lots is just nothing at all. When some buy a counter, that really matters to me. Yongnam will be a multi bagger in time comes

Published April 1, 2010

Yongnam upbeat on winning a third of new projects here It plans to boost stock of steel struts as builders' demand remains strong

By VEN SREENIVASAN

COMING into the new year with an order book of some $492 million, specialist infrastructure steelworks company Yongnam Holdings reckons it can clinch at least a third of the estimated $1.4 billion worth of new projects coming onstream this year. And this does not include up to $30 billion of infrastructure projects here, including the $8 billion North-South underground expressway, which is expected to be commissioned in the next few years.

'Some people (in the market) seem to think that with the completion of some of our big commercial projects like Marina Sands, the game is over for us,\' laughed executive director and chief financial officer Chia Sin Cheng.

'They could not be further from the truth. Even as I speak, we are very busy with major infrastructure projects such as the $5 billion Marina Central Expressway, Downtown Line 2 & 3, Gardens by the Bay and others.'

Yongnam considers itself unique in its business. The company is Singapore's, and probably the region\'s, largest supplier of steel struts used to support construction of tunnels, underground highways and subterranean buildings; and structural steel used for the construction of mega complexes and buildings. Indeed, some analysts calculate that Yongnam is bigger than the combined size of its next two biggest competitors, Taiwan's Fuichi and Japan's J-Steel.

'In this business, size matters,' Mr Chia said.

'Barriers to entry are high, not just because of cost, but also because of regulatory requirements and the need for a strong track record. And we have first mover advantage on these fronts.

Yongnam's size becomes obvious when seen in the context of its steel asset holdings: it owns some 135,000 tonnes of steel struts at its Tuas facility, which itself is the size of 20 football fields. These re-usable struts are used by multinational builders like Obayashi, Takenaka, Penta-Ocean and others to physically support underground tunnels and caverns at multi-billion-dollar subterranean infrastructure projects.

Demand has been so strong that Yongnam is planning to buy at least 20,000 tonnes more, to boost its total stock to 155,000 tonnes. Its existing stock is carried at original steel cost of $900 per tonne, though new stock will have to be bought at $1,600 per tonne - a factor which also raises barriers to entry.

'No doubt, there has been a slight flattening out of these commercial projects which use structural steel,' Mr Chia said. 'But the pipeline looks promising, especially with the Kallang Sports Hub and Southbeach projects coming onstream later this year.'

Last year, structural steel accounted for 75 per cent of its full year revenue of $347 million (net profit for end-December 2009 was $40.1 million). But in its current order book, 60 per cent of revenue will come from struts. The company is also looking to diversify geographically.

'Currently, 90 per cent of our projects are in Singapore,' he said. 'We expect the Singapore:offhsore mix to be 50:50 in about three to five years.'

Its past offshore projects include Delhi Airport, Bangkok Airport and Dubai Metro Rail. Meanwhile, the company is bracing for a slew of mega infrastructure projects here, including the underground expressway which will run parallel to the CTE. \'In this business, you must have the capacity and size to deliver,' he said. 'So for us, the bigger the project, the better.'

Meanwhile, it expects to book some 62 per cent of its existing order book into this year's earnings, with the rest coming in during 2011. Asked why Yongnam's stock is stuck at under 30 cents if the outlook was so bright, Mr Chia laughed:

'Yes, we used to be above 50 cents over a year ago when we had half the value of projects in hand. I suppose the market has not appreciated what we are. Many analysts tend to lump us with other general contractors, not realising that we are a specialist steelworks subcontractor who does not share the same risks as those in general construction.'

Singapore, April 5, 2010 – Yongnam Holdings Limited, together with Geodesic Techniques Private Limited, an engineering design and build company in India, has won a sub-contract worth INR 235 Crores (approx. S$75.5 million) for the construction of a roof structure and composite steel columns for a new integrated terminal building for the Mumbai International Airport. The contract is expected to be completed by 28 February 2011. “This is our second major contract win in India, following the successful completion of the roof structure steelwork for the new passenger terminal building at the new Terminal 3 of Delhi International Airport. As we build up our track record in India, this is a testament to our commitment to quality and safety, as well as our ability to provide value-added engineering and steel construction solutions. More importantly, this contract is evidence of our successful effort to deepen our market penetration in India,” said Mr Seow Soon Yong, Chief Executive Officer of Yongnam.