TARGET $1.23

Broker initiates coverage of this company, calling it an " undervalued laggard play"

THE CONTEXT &bull   Tiong Woon Corp, whose bright orange cranes are a familiar sight across Singapore,  is entering its 27th year as a listed firm on the SGX. Longevity on the exchange, especially for a company serving the construction, oil and gas, and petrochemical industries, reflects a business that has successfully weathered more than one economic cycle. &bull   For many years, investors were not attracted to this company (recent market cap: S$212 million), let alone accord it a respectable valuation.  &bull   More recently, the construction upturn in Singapore has boosted the company' s share price more than 30% over the past year to about 80 cents. Last week, an initiation report from CGS International helped push it further, to around 91 cents. Read excerpts of CGS' report below ....

Excerpts from CGS report
Analyst: Natalie Ong

Tiong Woon Corp -- An undervalued laggard play   ■ TWC is trading at CY27F P/E of 6.7x, a 45% discount to regional peers despite its global ranking (#15 on IC100) and strong track record.   TIONG WOON Share price:  $0.87 Target:  $1.23 ■ We view TWC as a beneficiary of construction-/infrastructure-focused nation building plans implemented by many SEA and Middle East countries. ■ Initiate coverage with an Add call. Re-rating catalysts include securing larger market share in its various geographies and a higher dividend payout ratio.

 

Undervalued regional one-stop heavy lift solutions provider

Tiong Woon Corporation (TWC) is trading at a discount to peers despite its global ranking and track record.

TWC ranks #15 globally on IC100 2024/2025, an annual ranking published by International Cranes and Specialized Transport magazine, and competes for heavier‑ tonnage work (up to 2,200 tonnes) yet trades around 0.6x CY26F P/BV, c.6.7x CFY27F P/E and 1.1x CY27F EV/EBITDA vs. peers&rsquo 2.1x, 12.1x and 5.6x, respectively.
 

Metric	Tiong Woon	Peers&rsquo average
CY26F P/BV (x)	0.6	2.1
CFY27F P/E (x)	6.7	12.1
CY27F EV/EBITDA (x)	1.1	5.6

 

Late cycle beneficiary of construction boom, DC and O& G builds

 

The majority of heavy lift and hauling services pertain to above-ground or superstructure work, which occurs after foundation/substructure work is largely completed.

Construction of mega projects Changi Airport Terminal 5 and Marina Bay Sands Integrated Resort 2 will run from 2025 till mid-2030F and are currently undergoing substructure works, with superstructure works likely to commence from 2027F onwards.

As at end-2025, contracts for the superstructure work for these two mega projects have not been tendered/awarded.

As such, we believe TWC&rsquo s revenue will grow and peak in FY28F.
 

Vertically integrated with regional capabilities

 

TWC&rsquo s fleet consists of 579 cranes, 359 haulage assets, 7 tugboats and 9 barges. It also has its own jetty located at its Pandan Crescent headquarters, allowing it to mobilise its cranes to capture overseas opportunities quickly.

With its haulage fleet, it provides transportation services (of cranes/counterweights) to and from the respective sites while its engineering know-how (mechanical and auxiliary engineering capabilities) enables it to offer project-specific lift plans, which we believe positions TWC as a one-stop heavy lift solutions provider.

We also believe its track record of data centre (DC), semiconductor, petrochemical and oil and gas (O& G) projects positions it as a strong contender for such projects, where safety and execution are critical to success.

 

Initiate coverage with an Add call and TP of S$1.23   We initiate coverage on TWC with an Add for its strong regional track record and vertically integrated model. Natalie Ong, analystWe believe it stands to benefit from various construction- and infrastructure-focused nation-building plans implemented by countries in Southeast Asia (SEA) and the Middle East. Our TP is based on 4x 2027F EV/EBITDA, a c.28% discount to global peers given TWC&rsquo s smaller scale, which implies FY27F P/E of  10x. Re-rating catalysts include higher fleet utilisation/market share in its various geographies and a higher dividend payout ratio. Downside risks include construction delays impacting TWC&rsquo s crane scheduling, which could lead to an increase in external equipment rental costs.

 

Tiong Woon Corp, ranked as the 15th largest crane operator in the world, has reported FY2025 earnings in line with expectations. However, given how the company is incurring higher capex, which is weighing on near-term cash flow and gearing, Heidi Mo and John Cheong of UOB Kay Hian have downgraded the stock from " buy" to " hold" .

 

Yet, given how Tiong Woon' s share price has gained more than a third in the past six months, they have raised their target price to 73 cents from 64 cents previously.

 

For its 2HFY2025 ended June, Tiong Woon reported revenue of $164 million, up 14% y-o-y. However, earnings dipped by 4% y-o-y to $7 million on margin pressure and less favourable project mix.

 

For the whole of FY2025, earnings grew by 6% y-o-y to $19 million, which was 98% of their estimates.

 

In FY2025, to grow its fleet, the company incurred higher capex of $65.5 million, up 5% over FY2024, which led to higher borrowings of $111.8 million, up 20% y-o-y and lower cash balance of $62.6 million, down 21% y-o-y.

 

Despite the lower 2HFY2025 earnings and cash balance, the company plans to increase its final dividend to 1.75 cents from 1.5 cents, equivalent to a pay out ratio of 21% from 19%.

 

From the perspective of Mo and Cheong, the higher dividends is an indication of the management' s confidence in sustainable earnings.

 

" Tiong Woon remains confident of resilient demand across its core markets, underpinned by petrochemical, semiconductor, infrastructure, and construction activity.

 

" Leveraging its position as a one-stop heavy lift specialist, we are of the view that Tiong Woon is well-positioned to capture opportunities while staying disciplined in cost and cash flow management. Fleet renewal and expansion should further drive efficiency and strengthen its competitive edge," they add.

 

For the current FY2026 and coming FY2027, Mo and Cheong have lowered their margin assumptions by around 2 percentage points, due to the expected continued cross-hiring of equipment to meet project demand.

 

On the other hand, they have raised their revenue forecasts by around 12% on stronger demand across Singapore, India, Saudi Arabia and Thailand.

 

As a result, their FY2026 earnings forecast has been trimmed by 4% and FY2027' s by 7%.

 

Their new target price of 73 cents is based on 0.5x FY2026 P/B, which is 0.5 sd above its historical 15-year average P/B, up from 0.45x previously, which is its historical mean.

 

" While demand drivers remain strong and Tiong Woon has reinforced its global standing, the ongoing high capex cycle is expected to weigh on free cash flow, raise gearing, and cap near-term upside.

 

" Looking ahead, successful deployment and utilisation of new cranes, coupled with margin recovery as cross-hiring eases and higher-tonnage cranes are progressively deployed, could serve as catalysts for an upgrade in the medium term," the analysts say.

Tiong Woon Corporation Holding has reported earnings of $19.2 million for the full year ended June 30, up 6% y-o-y.

 

The group&rsquo s revenue for the full year grew 14% y-o-y to $163.5 million, while gross profit grew 4% y-o-y to $61.4 million. However, gross profit margin declined 3.6 percentage points (ppts) to 37.6%.

 

The group says that revenue growth is due to the increase in contributions from heavy lift and haulage segment, but the lower gross profit margin was attributed to sales mix of projects undertaken during the year.

 

The group&rsquo s heavy lift and haulage segment external revenue grew 15% y-o-y as the company undertook more heavy lift and installation projects in Singapore, Thailand, Malaysia, Middle East and Indonesia during FY2025.

 

Its marine transportation segment external revenue remained stable at $2.2 million, while trading segment external revenue decreased to $1.4 million.

 

The group&rsquo s net assets stood at $322.3 million as at June 30, translating to a net asset value per share of $1.39.

 

Tiong Woon says that it maintains a positive outlook, as customer demand for heavy lift and haulage solutions is expected to remain resilient in Singapore and key regional markets such as India, Saudi Arabia and Thailand, particularly in the petrochemical, semiconductor, infrastructure, logistics and heavy transport, as well as construction sectors.

 

 

Crane operator Tiong Woon Corporation Holding reports earnings of $12.06 million for the 1HFY2025 ended Dec 31, 2024, up 12% y-o-y. 

 

Earnings per share for the reporting period came in at 5.20 cents, also up 12% y-o-y from 4.65 cents in the same period a year ago. 

 

The group&rsquo s revenue grew by 5% y-o-y to $78.8 million, while gross profit decreased by 8% y-o-y to $30.35 million. 

 

Cash and cash equivalents per consolidated statement of cash flows decreased by $8.7 million to $70.5 million as at Dec 31, 2024 due to net cash outflows from financing activities and investing activities of $19.1 million and $8.2 million respectively.

 

Revenue from the heavy lift and haulage segment grew mainly due to business in Malaysia, Middle East, SIngapore and Indonesia, offset by lower revenue from Brunei. Trading segment revenue also increased. 

 

Gross profit decreased mainly due to external heavy equipment rental, manpower and other costs outpacing revenue growth for the above segments.