Sin Heng Heavy Machinery

[Stockerman]

Why does the controlling shareholder want to sell off Sin Heng on the cheap at 21 cents? (even below the market price of 26.5 cents; NAV = 19.3 cents)

Not much premium from its NAV. EPS is approx 1.8 cents..



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Sin Heng shares fall 17% after stake sale news disappoint
SINGAPORE - Shares of mainboard listed Sin Heng Heavy Machinery Ltd fell as much as 17 per cent after Toyota Tsusho Corp acquired a 27 per cent stake in the Singapore heavy lifting services firm at a discount to the last traded price.
Toyota, a member of Toyota Motor Corp Group, bought around 123.8 million shares in Sin Heng from its controlling shareholder SEAVI Advent Equity V © Ltd for S$26 million (US$20.3 million).
That translates to S$0.21 per share, a 20.75 per cent discount to its closing price of S$0.265 last Thursday before the company requested a halt in trading of its shares. The stock had risen nearly 13 per cent before the halt.
"People were already buying the stock before the news and they were probably expecting a premium. But the offer was quite disappointing because it was a fairly big discount to the last traded price," said a local trader.
By the first 45 minutes of trading on Monday, Sin Heng shares were down 15 per cent at S$0.225 on volume of 31.5 million shares, 1.4 times the average full-day volume over the past 30 days.
Sin Heng shares were the second-highest traded stock by volume in the Singapore market on Monday. - REUTERS

[brattzz]

it shows that sin heng needs toyota motor more...

guess SH should have made it clearer... :O

[KopiKat]

I went to look at the Price vs Volume data from Yahoo Finance.

As recent as March, there were days when the Volume = 0! Prices were closer to $0.15 then. It was only sometime in end-Mar that we see huge volumes appearing and prices moving upwards. I don't see any related SGX Announcements during that period.

IMO, it looks very suspicious that those with insider info must have started buying in anticipation of the the Toyota deal...

[orangetea]

On 25 May 2012
Toyota Tsusho Corp (TTC) acquired 123,800 lots (26.96%) at $0.21 ea from SEAVI Advent Equity V © Ltd.

Subsequently TTC subscribed 30,950 lots rights on Jul 25, 2013
[one (1) Rights share @ $0.16 for every four (4) existing ordinary)]

Prior to rights 1000 at $0.21 = 0.21 * 1000 = $210
(1 for 4) 250 shares at $0.16 = 0.16 @ 250 = $40
Value of 1250 shares after rights = $210 + $40 = $250

Ex-rights share per 1000 shares = $250/1250 = $0.20

As at 19 Aug 2013
TTC has 154,750 lots post rights (26.96%) @ $0.20 ea

[orangetea]

Sin Heng awarded exclusive distributorship of Arcomet’s self‐erecting cranes in Singapore and several Southeast Asia countries

 Arcomet distributorship to herald in wider use of self‐erecting cranes in Singapore and the region.
 Group expects warm reception of new product offering in the industry with its productivity and cost benefits.

SINGAPORE – 19 February 2014 – Mainboard‐listed Sin Heng Heavy Machinery Limited (“Sin Heng” or the “Company”) and its subsidiaries (collectively the “Group”), a lifting service provider and equipment trader, has been awarded the exclusive distributorship of Arcomet’s self‐erecting crane in Singapore as well as Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, Thailand and Vietnam.

Founded in 1954 at its global headquarters in Belgium, Arcomet has become one of the world’s largest crane rental companies and an OEM of its self‐erecting cranes. Since designing and manufacturing its first self‐erecting crane in 1968, Arcomet has continued to develop new models with its most recent Eco range bringing low power consumption advantages.

Mr. Don Tan, Managing Director of Sin Heng, commented, “To augment our product offerings, we are always on the lookout to bring in suitable machinery which is acceptable in our markets. We are confident that the self‐erecting crane can help to reduce the use of manpower and improve overall productivity through their ease of assembly and flexibility of deployment.”

The Group intends to bring in several models with different capacity, reach and mode so as to cater for different lifting requirements. The Group believes that this new distributorship will herald in the wider use of self‐erecting cranes in Singapore and the region.
Mr. Tan added, “The Group’s latest product offering will definitely widen our scope of providing lifting solutions. We will continue to explore opportunities to expand our business either through entering new markets or introducing new products.”

[orangetea]

Some impetus for construction firms to apply for grants for quieter equipment

Published February 21, 2014
NEA starts Quieter Construction Fund
By Mindy Tan [email protected]
print |email this article

THE National Environment Agency (NEA) has launched a $10 million Quieter Construction Fund (QCF) to encourage construction companies to use quieter machines and noise control equipment.

For instance, a Singapore-registered builder can apply to the fund to acquire a jack-in piling machine which generates about 20 dB(A) (A-weighted decibels) less noise than bore piling machines. Alternatively, the company may choose to acquire perimeter noise barriers, which can reduce noise by 5dB(A) to 10 dB(A).

The QCF will reimburse companies up to 50 per cent of the cost of purchase or leasing of supported items, subject to individual equipment caps. The maximum grant that will be disbursed to each project site is $100,000 or 5 per cent of the project contract value, whichever is lower.

In his opening address at the Quieter Construction Fund Seminar organised by the NEA yesterday, Ho Nyok Yong, president of the Singapore Contractors Association Ltd (SCAL), welcomed the move to adopt quieter equipment and methods of construction.


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Article in Amfraser Morning Buzz
Thursday, 20 February 2014

SIN HENG TO OFFER SELF‐ERECTING CRANES

Group awarded exclusive Arcomet distributorship.
Lifting services provider and equipment trader Sin Heng Heavy
Machinery yesterday inked an exclusive distributor agreement with
Arcomet to offer self‐erecting cranes in South‐east Asia.
Sin Heng has decided to spend an initial $2 million in the first year to
purchase five to eight of the cranes in varying capacities. Two cranes
are expected by the end of this month.

The distributorship with Arcomet ‐ a Belgium crane rental and
original equipment manufacturer of self‐erecting cranes, covers all
South‐east Asian countries with the exception of the Philippines and
East Timor.

As these cranes build up to only eight storeys, they rule out much of
the local residential market. But Arcomet's chief executive officer
Dirk Theyskens said that the local low‐rise development market is
also large, consisting of transport infrastructure such as the
expanding airport and train tracks. Sin Heng's managing director Don
Tan added that the cranes would be useful in countries such as
Myanmar and Vietnam where developments tend to be low‐rise.
Erection of such cranes is largely automated and done above the
ground. Compared to those of similar capacity in the market, these
cranes halve the manpower needed, reduce the space required for
crane assembly by at least 10 times, and are quieter, said Scoti Story,
Arcomet's Asia chief executive officer.

Besides being friendlier for the community, the cranes are also said
to be friendlier for the environment. Their frequency‐controlled
motors work out real power consumption needs by comparing the
load with the operator's input. Mr Story projects around a respective
30 per cent and 15 to 20 per cent savings in electrical power and fuel
costs compared to non‐frequency controlled cranes.

[dydx]

Another negative Profit Guidance.....
http://infopub.sgx.com/FileOpen/Sin%20He...eID=417792

but a well-written, honest one!

[Quickbeam]

Is anyone still following this name. Trades at a significant discount to NAV, with assets that a have tradeable value, cranes can be sold worldwide. Historical strong profitability on a lower asset base than the current one. If the market recovers EBIT could surpass historical levels. Combination of Toyota makes me less weary of a take under. Founder has retaken the reigns from his son. Business is now profitable again, albeit marginally. Business trades at a a significant discount to firesale asset prices. The crane business has been under duress from commodities being under a pressure, and is definitely late cyclical. Long duration projects are winding down releasing more capacity into the market. This has depressed rates. With a recovery in commodities, and tightening in oil supply, business may improve. Singapore housing and infrastructure projects seem to be improving as well.

Looks like a case of limited downside, lots of potential upside. Illiquid though.

[GreedandFear]

Is anyone still following this name. Trades at a significant discount to NAV, with assets that a have tradeable value, cranes can be sold worldwide. Historical strong profitability on a lower asset base than the current one. If the market recovers EBIT could surpass historical levels. Combination of Toyota makes me less weary of a take under. Founder has retaken the reigns from his son. Business is now profitable again, albeit marginally. Business trades at a a significant discount to firesale asset prices. The crane business has been under duress from commodities being under a pressure, and is definitely late cyclical. Long duration projects are winding down releasing more capacity into the market. This has depressed rates. With a recovery in commodities, and tightening in oil supply, business may improve. Singapore housing and infrastructure projects seem to be improving as well.

Looks like a case of limited downside, lots of potential upside. Illiquid though.

I have been long and wrong on this one for a long time....it was also trading at a discount to NAV when I entered but clearly things have become worse. The company's profitability has improved over the past 12 months, so hopefully we have hit rock bottom. The recent disclosure by Tat Hong that it has been approached about a potential takeover (unclear if this is a third party our the controlling shareholder) would also seem to suggest that other strategic or industry investors feel that the cycle has bottomed. Having said that, I think my lesson from this sector has been that there really are very very few barriers to entry. If you have the capital (or have access to lease funding), you can purchase cranes and lease them out. I am sure that is grossly oversimplifying the business but I really do not see much differentiation between the three Singapore listed players (Tat Hong, Sing Heng and Tiong Woon) about from some different geographic focus and their mix between rentals and sales of equipment. I am optimistic that the cycle is turning and profit margins could significantly increase (1.6% net profit in FY2017 vs 7.6% in FY2011) as could revenues ($99MM in 2017 vs a peak of $200M in FY2014), so I am holding on but it has been a long journey.

Vested

[Quickbeam]

I have experience with other crane companies, namely Boom Logistics, so I am aware that The cycle has been very tough over the past few years. With consolidation in the sector, also outside of Singapore, over capacity should be reduced and margins should improve. This may take another couple of years, but I am Patient. I think barriers to entry are limited, but I dont think it is a business that warrants a valuation below book value. If you run a tight ship, and you're qualified for large projects, I think you make a decent amount of money throughout the cycle. Sin Heng has shown it is an above average operator in a mediocre industry.