Tat Hong made two announcements regarding disposal of assets totalling ~S$55.7m through its wholly-owned subsidiaries.

1) Tutt Bryant Group Limited has entered into a conditional sale and leaseback agreement with TransLinQ Income Pty Ltd in relation to five Australian properties for a total cash consideration of A$30.0m (~S$35.1m).

2) Tat Hong HeavyEquipment Pte Ltd has entered into a conditional sale and purchase agreement to divest its entire 70% interest in Hup Hin Transport Co Pte Ltd to Hup Hin Capital Pte Ltd for a total cash consideration of S$20.6m.

We think these moves are part of Tat Hong’s asset-light strategy and will allow the company to refocus in the face of a weaker Australian mining sector. We maintain HOLD with S$0.89 fair value estimate.

Source: OCBC Research - 8 Jul 2014