Nam Lee Pressed Metal

[dydx]

Understandably Nam Lee remains the sole supplier of aluminium frames to Carrier Transicold's Container Refrigeration Division, which has its HQ in SG. Carrier Transicold mounts refrigeration units on the frames, and sells the finished products as the most important component to container manufacturers which produce the final reefer containers used by shippers worldwide to store/transport perishable goods, like bananas.

[Dosser]

I find the Annual Report:

https://links.sgx.com/FileOpen/Nam%20Lee...eID=742421

rather depressing reading. Increased turnover but reduced profit. Significant increase in borrowing (from very little). Projection for significant reduction in demand over the next year in the reefer segment.

The main issues are increasing labour and raw materials costs in an environment where external demand is dropping. The company seems to have a good job of controlling costs at the corporate level. This appears to be as much about the general business environment as the specific markets Nam Lee is in, or the operation of the company.

Rising costs combined with weakening external demand does not bode well for the manufacturing sector in Singapore over the next year or two. This does not appear to be fully priced into the market yet.

[ghchua]

Hi Dosser,

With respect to the increase in borrowings, the company had been trying to use trust receipts to finance stocking up of inventories for orders in hand to mitigate the risk of raw material cost and supply chain disruption.

Though reefer segment is not doing well, construction activities is expected to be better in the coming FY. Although outlook is not as good as before in the short term, we can take comfort from the fact that they still maintain their final and special dividend payout for FY22.

[Dosser]

Hi Dosser,

With respect to the increase in borrowings, the company had been trying to use trust receipts to finance stocking up of inventories for orders in hand to mitigate the risk of raw material cost and supply chain disruption.

Though reefer segment is not doing well, construction activities is expected to be better in the coming FY. Although outlook is not as good as before in the short term, we can take comfort from the fact that they still maintain their final and special dividend payout for FY22.

My concern is whether this is a canary in a coal mine. Singapore manufacturing companies face a nasty combination of:

• Rising labour costs
  
• Rising material costs
  
• A weak external environment
  
• A strong S$
  

which is not going to be good for profits. 

A distinction can be made between those companies that are focused on the local market and those which are primarily affected by the external market. Nam Lee straddles both, and it is the external side that is a worry for this year and probably next.

[weijian]

The Mgt of this Nam Lee Pressed Metal has passed onto the 3rd Generation of Yongs. Each of the 2nd Generation Yong family owns almost similar ~19% stakes and it seems like 2 of the 3 are trying to get one of them (Joanna Yong (Chairman/ED) out.

THE REQUISITION FOR A MEETING OF THE SHAREHOLDERS PURSUANT TO SECTION 176 OF THE COMPANIES ACT 1967 OF SINGAPORE FOR THE PROPOSED REMOVAL OF MS YONG LI YUEN, JOANNA FROM HER OFFICE AS DIRECTOR OF THE COMPANY WITH EFFECT FROM THE DATE OF THE EGM

Ms Joanna Yong Li Yuen
Ms. Joanna Yong Li Yuen is the niece of the Requisitioning Shareholders. She is also the cousin of both Mr. Eric Yong Han Keong and Mr. Yong Han Lim, Adrian. Ms. Joanna Yong Li Yuen is the daughter of Mr. Yong Koon Chin, who is a Substantial Shareholder of the Company.

Mr. Eric Yong Han Keong
Mr. Eric Yong Han Keong is the son of Mr. Yong Kin Sen, who is one of the Requisitioning Shareholders. He is also the nephew of Mr. Yong Koon Chin and Mr. Yong Poon Miew, who is one of the Requisitioning Shareholders. Mr. Eric Yong is also a cousin of both Ms. Joanna Yong Li Yuen and Mr. Yong Han Lim, Adrian.

Mr. Yong Han Lim, Adrian
Mr. Yong Han Lim, Adrian is the son of Mr. Yong Poon Miew, who is one of the Requisitioning Shareholders. He is also the nephew of Mr Yong Koon Chin and Mr. Yong Kin Sen, who is one of the Requisitioning Shareholders. Mr. Yong Han Lim, Adrian is also the cousin of both Ms. Joanna Yong Li Yuen and Mr. Eric Yong Han Keong.

https://links.sgx.com/FileOpen/Nam%20Lee...eID=870273

[weijian]

I am not a shareholder (nor attended the meeting) but I can imagine the sheer amount of tension in the ~1 hour Q&A session - security guards posted outside the meeting and 3 lawyer firm rep each representing different parties.

MINUTES OF EXTRAORDINARY GENERAL MEETING

Ms. Joanna Yong thanked shareholders for attending the Meeting. She was disappointed on the Requisition Notice as she has been acting as Executive Chairman of the Company in good faith acting in the interest of the Company. The Requisition Notice came in unexpected and was a shock to her, particularly hurtful as the Requisition Notice was moved by her two uncles, and she was unclear of the reason for the Requisition Notice. She invited the proxies appointed by the Requisitioning Shareholders to provide the reason for the Requisition Notice to allow Shareholders to understand and how they should cast their votes.

Counsel A added that the Requisitioning Shareholders are not obliged to provide the reason for the Requisition Notice under the Companies Act. The Board is obliged to hold the Meeting in accordance with the Companies Act upon receipt of the Requisition Notice.

https://links.sgx.com/FileOpen/Nam%20Lee...eID=874275