• Yongnam’s results were below our expectations. The 1H18 net loss of S$13m was mainly due to the low level of strutting and fabrication work.
• Order book stood at S$273m as at end-Jun 18, a significant uplift from the S$142m in orders at end-Mar after winning the N103 contract for North-South Corridor.
• It is actively pursuing S$1.4bn worth of projects in Singapore, Hong Kong, Australia, and other developing countries in Asia.
• We change our FY18F EPS to LPS and cut our FY19-20F EPS by 3-43% in view of delays in getting strut works from North-South Corridor and Melbourne Metro projects.
• Maintain ADD with a reduced Target Price of S$0.45, based on 0.8x FY19F P/BV.

Source: CGS-CIMB Research - 14 Aug 2018