Tat Hong Holdings released its 3QFY17 results yesterday evening. Revenue was down 3% YoY to S$121.5m while the group recorded a small positive PATMI of S$0.2m, vs. a net loss of S$6.7m in 3QFY16. 9MFY17 revenue was down 13% to S$348m with a net loss of S$8.8m.

This quarter, most business segments (Tower Crane Rental, Distribution and General Equipment Rental divisions) saw better revenues. Tower Crane Rental business has secured a good pipeline of potential projects in China.

On the other hand, Crane Rental division’s revenue was down 35% due to weak demand in main markets, Singapore and Australia.

Notably, the bottomline was helped by a gain of S$5.2m from a property disposal in Australia, as well as a disbursement of S$6.5m with respect to guaranteed trade receivables. But there was a non-cash impairment charge of S$1.2m, and management expects full year FY17 to be negatively impacted by impairments and on-going restructuring costs.

Across its business divisions, tower crane rental business remains the key growth area. We maintain our HOLD and S$0.40 fair value estimate.

Source: OCBC Research - 15 Feb 2017