Can buy Tiong Woon(SGX:BQM)?

Singapore-based Tiong Woon Corporation (TWC) operates as one of the world’s top heavy-lifting crane operators, offering integrated services for project management in heavy lift and haulage. Despite its strong performance and growth, particularly highlighted by a 49% increase in net profit to $10.8 million for the half-year ended December 2023, TWC’s stock has remained relatively stagnant around the 50 cents level.

Led by CEO Michael Ang, TWC is eyeing significant opportunities in infrastructure, construction, oil and gas, and petrochemical industries across Singapore, South-east Asia, South Asia, and the Middle East. While the majority of its income currently comes from Singapore, the company is experiencing growing demand in other markets.

Established in 1999 and listed on the Singapore Exchange, TWC dominates the tower crane market in Singapore’s Housing Board segment with a 30% to 40% market share. Additionally, the company has a strong presence in countries such as India, Thailand, Saudi Arabia, Malaysia, Brunei, Bangladesh, Indonesia, the Philippines, China, Vietnam, and Sri Lanka.

The company’s future growth is expected to be driven by offshore projects, particularly in India and Saudi Arabia, where infrastructure spending is increasing. TWC has also formed strategic partnerships with international heavy-lift companies, such as Mammoet, to enhance its capabilities and competitiveness in various markets.

Despite its strong fundamentals and growth potential, TWC’s stock is undervalued, trading at a forward FY2024 price-to-earnings multiple of 6.2 times and a price-to-book ratio of just 0.4 time. Analysts project a 20% earnings growth for 2024, with potential for a significant upside in stock price. TWC’s management remains committed to providing reliable solutions for its customers and creating value for its shareholders, both in Singapore and overseas.

Although no interim dividends were declared in February, analysts anticipate a larger payout in 2024 as TWC celebrates its 25th listing anniversary. The company doubled its dividends last year to one cent per share, and with its strong balance sheet boasting less than 10% net gearing, management has hinted at a positive dividend trajectory.

Despite its solid operating numbers and promising prospects, the market has yet to fully recognize TWC’s value. Currently, the stock is trading at a forward FY2024 price-to-earnings multiple of 6.2 times and a price-to-book ratio of just 0.4 times. Analysts have set price targets of 88 cents and 90 cents, respectively, indicating a potential 75% upside over the next 12 months.