TTJ Holdings

[TUBInvesting]

Please allow me to add my 2 cents to the discussion.

To discuss whether the drop in share price was warranted, we need a framework to analyse what we are getting for the current price.

Cash Assets and liabilities.
1) 25.5 cents per share in cash
2) Approximately 13.6 cents per share in receivables and 9 cents in taxes and accounts payable.

Total should be approximately 30.5 cents.

Business side.

Order book of $48 million in the structural steel segment which will bring in approximately $8.5 million in cash profits if we are to assume that the EBITDA margin of the segment will be steady even with low utilization. Of the $8.5 million in expected cash profits to be received from the order book, $961,000 has already been billed so that leaves about $7.5 million. Applying a 10% discount for time value yields a present value of the current order book of $6.7 million or 2 cents a share.

The dormitory business generated 3.7 cents per share of EBITDA in the previous FY. Assuming non renewal, it will operate of about 5 months next year and assuming the same monthly EBITDA, it is worth approximately 1.5 cents per share.

That brings us to a total of about 34 cents per share. We are minority shareholders and must attach a lack of control discount to account for our lack of ability to control the cash flows of the company. Attaching a low 10% lack of control discount to account for privatization possibility, we get a fair value of 30.5 cents.

Now this is just a framework for discussion and the valuation arrived is rather low as it does not attach a value to potential future cash flow from new order wins.

This figure is rather close to my estimated amount from my scorecard.

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