Tat Hong issued a profit guidance for its 4QFY16 and FY16 results, as they expect to report a loss due to further provisions and costs related to the exit of the excavator distribution business in Indonesia, FX losses (mostly unrealized), as well as non-cash impairment charges on goodwill and assets for its wholly-owned Australian subsidiary.

The impairment charges are anticipated to be „significant‟. These factors mentioned are not new, and the group had previously mentioned expectations for a „depressed‟ FY16. We currently have a HOLD rating and fair value estimate of S$0.45. The group will be announcing its FY16 results on or before 27 May „16. Discussions regarding the „potential transaction‟ are still in progress as well.

Source: OCBC Research - 16 May 2016