yongnam holdings a strong buy
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Yongnam Holdings a Strong BuyTRANSCRIPT
Yongnam Holdings Limited
FY2010 Results Presentation
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Contents
• Our Business
• Corporate Updates
• FY2010 Financial Performance
• Prospects and Market Outlook
• Growth Strategies and Plans
Our Business
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Structural Steelworks• One of the largest steel fabrication facilities in
Southeast Asia• Leading steel specialist contractor with
unparalleled track record of iconic projects• On time delivery and with quality• S1 category accreditation from Singapore
Structural Steel Society
A well-established structural steel contractor and specialist civil engineering solutions provider
Specialist Civil Engineering• Modular Strutting System meets increasingly
stringent design and project requirements• Approximately 140,000 tons of strutting assets and
pipe piles • Strong track record and high replacement cost of
struts are major barriers to entry
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Our Business
• Close to 40 years of experience in steel fabrication
• Long established relationships with major reputable contractors:Takenaka Corporation
Taisei Corporation
Obayashi Corporation
Penta Ocean
Shimizu Corporation
Dragages Singapore
Sembawang Engineers &Constructors Pte Ltd
Samsung CorporationSsangyong Engineering &Construction Co LtdHyundai Engineering & Construction Ltd
Daelim Industrial Co. LtdWoh Hup Pte LtdLarsen & Toubro Ltd
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Our Footprint
Regional Presence:
1. Subsidiaries
• Singapore
• Malaysia
• Hong Kong
• Thailand
• Middle East
2. Project Office
• India
• Qatar
Hong Kong
Malaysia
Singapore
Thailand
Middle East
INDIA
Projects undertaken across the region:
Singapore
Malaysia
Middle East
China
Norway
Brunei
Philippines
Thailand
Japan
Korea
Hong Kong
Pakistan
India
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Our Facilities
Singapore:Total Land Area: Approximately 76,000 m2
Workshop Covered Area: 20,250 m2
Capacity (Normal Steel Structure): 3,000 Tons per month
Malaysia (Nusajaya, Johor):Total Land Area: Approximately 109,103 m2
Workshop Covered Area: 28,900 m2
Capacity (Normal Steel Structure): 3,500 Tons per month
Total Staff Strength: Approximately 2,000
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• Singapore:▫ Terminal 1, Changi International Airport▫ Suntec City▫ Capital Tower▫ Marina Bay Sands Integrated Resort▫ ION Orchard▫ National Library Building▫ One Raffles Quay
• Overseas:▫ Dubai Metro Rail▫ New Delhi International Airport▫ Suvarnabhumi International Airport, Bangkok ▫ KLIA▫ Brunei (Hangars)
Structural Steelworks – Track Record
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Structural Steelworks – Track Record
Marina Bay Sands Integrated Resort, Singapore
ION Orchard, Singapore
Dubai Metro Rail, Dubai
New Delhi International Airport, India
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• Singapore:▫ Singapore Post Centre▫ Central Expressway▫ Kallang-Paya Lebar Expressway▫ MRT North-south Line▫ MRT East-west Line▫ MRT North-east Line▫ MRT Circle Line▫ Marina Bay Sands Integrated Resort
• Overseas:▫ Dubai Metro Rail▫ Hong Kong MTR
Specialist Civil Engineering – Track Record
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Specialist Civil Engineering – Track Record
Farrer Station, MRT Circle Line, Singapore
Marina Bay Sands Integrated Resort, Singapore
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MRT – Yongnam’s Track Record
Landmark
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On-Going Projects
Vista Xchange
• Contract worth S$88.6 million• Construction of the Integrated Civic,
Cultural, Retail and Entertainment Hub at Vista Xchange, located at one-north
• Phase I Construction completed • Phase II Construction commenced in
March 2010 and scheduled for completion by Oct 2011
• 40% completedArtist’s Impression
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On-Going Projects
Mumbai International Airport• Contract worth S$71.1 million (50/50 JV)• Second contract win following Delhi
International Airport• Construction of roof structure and
composite steel columns for new integrated terminal building
• Project expected to complete by Sep 2011
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On-Going Projects
• Design, supply and construct structural steelworks for:
• Cool Dry Conservatory Building• Cool Moist Conservatory Building
• Contract value approx S$53.8 million
• 84% completed
• Expected completion May 2011
Gardens by the Bay
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On-Going Projects
Marina Coastal Expressway
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Marina Coastal Expressway• 6 Contracts worth total of S$362.2 million
• C485 contract worth S$206.0 million – single largest contract won by Yongnam todate
• Temporary steel pipe pile cofferdam, steel waling and strutting works• Project scheduled for completion by June 2013 – 51% completed
• C487 contract valued at approx S$53.1 million• Lease supply, fabrication, installation and removal of temporary waler
and struts
• Project scheduled for completion by June 2012 – 23% completed
• C483 contract valued at approx S$22.4 million• The installation and the eventual extraction of the temporary steel
interlocking pipe pile earth retaining wall for the 950‐metre vehicular tunnel structure
• Project scheduled for completion by May 2012 – 59% completed
• C486 contract valued at approx S$22.5 million• Supply, installation and removal of steel walers and struts• Project scheduled for completion by April 2012 – 34% completed
On-Going Projects
Artist’s Impression
C485
C485
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Marina Coastal Expressway
• C482 contract valued at approx S$22.1 million • Installation and removal of steel pipe pile• Project scheduled for completion by May 2012 – 75% completed
• C482 contract valued at approx S$36.1 million• Lease supply, fabrication, assembly, maintenance and removal of walers
and struts• Project scheduled for completion by May 2012 – 12% completed
On-Going Projects
• Marina Coastal Expressway
On-Going Projects
• Marina Coastal Expressway
On-Going Projects
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MRT Downtown Line 2
• C918 contract valued at approx S$25.0 million • Installation and removal of steel struts and
walers for Tan Kah Kee Station and Cut & Cover Tunnel
• Project scheduled to start in March 2011 for completion by June 2013
• C921 contract valued at approx S$27.5 million• Installation and removal of sheet piles, soldier
piles and king posts for Little India Station, Rochor Station and tunnel between the two stations
• Project commenced in September 2010 for completion by September 2015
• C921 Two contracts valued at approx S$56.5 million• Installation and removal of steel struts and
walers, and RC deckingfor Little India Station, Rochor Station and tunnel between the two stations
• Project commenced in December 2010 for completion by September 2015
On-Going Projects
FY2010 Financial Performance
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FY2010 Financial Performance
5th year of record performance, since FY2006
FY2009 FY2010 Change (%)
Revenue (S$’m) 346.8 335.1 -3.4
Gross Profit (S$’m) 77.4 95.7 + 23.7
Profit before tax (S$’m) 48.8 67.7 +38.8
Profit after tax (S$’m) 40.1 54.4 +35.7
EPS (Basic)
(Singapore cents) (1)3.27 4.38 + 33.9
NAV Per Share (Singapore cents) (2) 15.22 18.92 + 24.3
ROE (%) 23.9 25.7 + 7.5
(1) EPS per share was computed based on the weighted average number of shares of 1,240,914,002 for FY2010 (FY2009: 1,226,033,071)
(2) NAV per share as at December 31, 2009 and December 31, 2010 respectivelyYear ended December 31
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FY2010 Financial Performance
Dec 31
2009
Dec 31
2010
Change (%)
Net Work-in-progress (S$’m)
93.0 60.9 -34.5
Debtors (S$’m) 47.8 55.6 +16.3
Cash (S$’m) 18.7 20.6 +10.2
Borrowings (S$’m) 159.1 137.0 -13.9
Net Borrowings (S$’m) 140.4 116.4 -17.1
Gearing (times) 0.75 0.49 -34.7
Shareholders’ Funds (S$’m)
187.6 235.6 +25.6
Year ended December 31
Strengthened Balance Sheet
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FY2010 Financial Performance
FY2010 Revenue decreased 3.4%:
• Structural Steelworks decreased from S$256.8 million to S$211.1 million mainly due to:
• Completion of several projects in FY2009 including New Delhi Airport project and some of the Group’s projects in the Marina Bay Sands Integrated Resort
• Substantial completion of Dubai Metro Rail project by third quarter FY2009
• Specialist Civil Engineering increased 37.8% to S$123.9 million mainly due to:
• Strong contributions from the Group’s contracts for the Marina Coastal Expressway
Year ended December 31
CAGR32.7%
Revenue
81.4
150.4174.1
337.6 346.8 335.1
0
50
100
150
200
250
300
350
S$'m
FY2005 FY2006 FY2007 FY2008 FY2009 FY2010
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FY2010 Financial Performance
FY2009 FY2010
63.0%37.0%
Specialist Civil Engineering S$123.9m
Structural SteelworksS$211.1m
Year ended December 31
74.0%
26.0%
Specialist Civil Engineering
S$90.0m
Structural SteelworksS$256.8m
Revenue by Business Activity
13.422.1
31.4
68.1
77.4
95.7
0
10
20
30
40
50
60
70
80
90
100S$'m
FY2005 FY2006 FY2007 FY2008 FY2009 FY2010
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FY2010 Financial Performance
Gross Profit 23.7% Due mainly to:
• Improved margins : 28.6% in FY2010 compared to 22.3% in FY2009
• Improved margins in Structural Steelwork segment
• Increasing contributions from the higher margin Specialist Civil Engineering segment
Year ended December 31
CAGR48.2%
22.3%
28.6%
Gross Profit & Margin
0.75.6
24.1
36.7
48.8
67.7
0
10
20
30
40
50
60
70S$'m
FY2005 FY2006 FY2007 FY2008 FY2009 FY2010
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FY2010 Financial Performance
Consequently, profit before tax 38.8%
Year ended December 31
CAGR150.2%
Profit before Tax
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FY2010 Financial Performance
• Strong order book of S$450 million as at December 31, 2010
- Structural Steelworks Vs Specialist Civil Engineering – 30:70
- 60% expected to complete in FY2011
Year ended December 31
Order Book
Prospects and Market Outlook
• Construction demand for:▫ 2011 expected between $22 – 28 billion(1)
▫ 2012 – 2013 projected between $20-$27 billion per year• Public sector to contribute between $12-$15 billion (55%), comprising:
▫ civil engineering construction (MRT Downtown Line Stage 3) ▫ public sector institutional construction demand (e.g. ITE’s 3rd campus at Ang Mo Kio, development
of community hospital at Jurong East, redevelopment of Victoria Theatre and Victoria Concert Hall)
• Private sector expected to contribute between $10-$13 billion:▫ backed by buoyant office space demand and vibrant retail sector▫ Dominated by High-specification and state-of-the-art buildings
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Market Prospects : Singapore
Promising Outlook for Construction Sector Demand in 2011 :
(1) Building and Construction Authority press release, January 12, 2011(2) Straits Times, February11, 2011
Government to continue to invest in infrastructure :• Recently announced North-South Expressway, estimated at between $7-$8 billion to be ready by
2020 – with two semi-tunnel sections, Singapore’s longest viaduct(2)
• Other upcoming infrastructure projects: Singapore Sports Hub, LNG terminal, Fusionopolis etc• Transport infrastructure : MRT Thomson Line and Eastern Region Line
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Market Prospects : Regional
• Malaysia:▫ Economic Transformation Programme:
2011 - construction sector expected to expand by 5.6%2012 - accelerate to 7% in 2012 RM 36bn MRT project planned for Greater KL High-speed rail link from KL to Singaporeabout 18 projects with an estimated investment value of RM52 billion:
Tanjung Agas oil & gas complexKL International Financial DistrictPower plants, hotels, etc
• Hong Kong:▫ HK Budget 2011-12 : government committed to investing in infrastructure. ▫ Estimated capital works expenditure:
2011-2012 to increase to over HK$58 billion (from HK$49.6 billion in 2010-2011)For each of the next few years to exceed HK$60 billion
▫ Major infrastructure projects rolled out: Hong Kong-Zhuhai-Macao BridgeHong Kong section of the Guangzhou-Shenzhen-Hong Kong Express Rail LinkKai Tak Development Plan Stage 1
▫ Major projects expected to start in 2011-2012: MTR projects eg.Kwun Tung Line extension, Shatin to Central Link, South Island Line (East)
▫ Proposed cross-border infrastructure projects:Railway linking Hong Kong and Shenzhen airports – Hong Kong section to cost over HK$50billion
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Market Prospects : Regional
• India:▫ Needs investments of US$1.7 trillion this decade▫ US$90 billion Delhi-Mumbai Industrial Corridor provides immense opportunities:
construction of roads and bridgesurban rail transit systemsairport and port developmentcontainer terminals
▫ Estimated investment of US$9 billion for airport development and upgrading over the next 5 years
• Middle East▫ Positive 2011-2012 outlook for Arab Gulf states: high oil prices will support government
infrastructure spending plans▫ Saudi Arabia : US$400 billion infrastructure development program to boost economic
growth ▫ Qatar :
world’s fastest growing economy in 2010World Cup host 2022US$140 billion infrastructure investment plan over next 10 years
▫ Abu Dhabi : investing US$200 billion by 2030 in various infrastructure projects to develop transportation networks (sea, air, road, rail), industrial zones, key manufacturing plants eg aluminium, steel, plastics
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Potential Projects
• Structural Steelworks▫ Singapore Sports Hub▫ National Arts Gallery▫ Hong Kong MTR▫ Muscat Airport Terminal Building▫ Haramain High Speed Rail (Saudi
Arabia)▫ Abu Dhabi Stadium▫ Offshore Structures
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Potential Projects
• Specialist Civil Engineering• North-south Line Extension• Downtown Line 3• Hong Kong MTR
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Potential Projects
• Structural Steelworks
LocationExpected
CommencementGovernment
$ Mil
Non-Government
$ Mil
Total
Singapore2011 229.4 Nil 229.4
2012 130.5 Nil 130.5
Overseas2011 50.0 Nil 50.0
2012 Nil Nil Nil
Total 409.9 Nil 409.9
LocationExpected
CommencementGovernment
$ Mil
Non-Government
$ Mil
Total
Singapore2011 92.9 16.0 108.9
2012 130.0 29.0 159.0
Overseas2011 256.0 Nil 256.0
2012 214.0 218.0 432.0
Total 692.9 263.0 955.9
• Projects announced by Government (not included above):
• Contracts for infrastructural developments such as:
MRT Thomson LineMRT Eastern Region Line
North-South ExpresswayMRT Greater KL
• Specialist Civil Engineering
MRT Downtown Line Singapore Sports Hub National Arts Gallery
Infrastructure – Abu Dhabi, Oman, Saudi, HK Offshore Structures
Growth Strategies and Plans
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Growth Strategies and Plans
Continue to grow the two core businesses – StructuralSteelworks and Specialist Civil Engineering
Actively pursue offshore structure projects
Leverage on established brand name and strong foothold in theSingapore market
Continue to explore projects in Hong Kong, Malaysia, Abu Dhabi,Saudi Arabia, Qatar, Oman, India and Europe
Thank You