Nam Lee Pressed Metal

[Greenrookie]

FY13 (ended 30Sep13) AR makes interesting reading.....
http://infopub.sgx.com/FileOpen/Nam%20Le...leID=20065 [FY13 AR]
and Nam Lee is extending the existing share buy-back mandate by another year.....
http://infopub.sgx.com/FileOpen/Nam%20Le...leID=20064 [Circular to Shareholders]

From reading the AR, it is quite clear that the lower reported NP in FY13 was mainly attributed to cost overrun in a major one-off project already completed (possibly Jems?). The stronger sales in 4Q and the higher year-end inventories and trade debtors balances do give confidence of better sales and cash collections to come in the next few quarters. Latest B/S as at 30Sep13 remained rock-solid and very liquid.

I now look forward to the total $0.015/share Final & Special dividends, which should be paid by end-Feb14.

I agree and believe the next few quarters should see better numbers.

I am however, rather uncomfortable with a few facts.

1) Is the contract with carrier going to be renewed? They mentioned the bulk of the revenue is from the building and infrastructure products, what happen to the container boxes? Carrier is doing booming business, why has it not translate to numbers to Nam Lee?

2) "The Group’s building products business is bracing for negative impacts to its operating environment from the slowdown in Singapore’s property market and coupled with an increasing number of competitors. " With the construction boom attracting competitors, which really wonder what happens when demand tapers off. Already, if you look at BCA 2014 forecast in construction, the big fall in private construction demand is due to the property cooling measures, and HDB is tapering off too.

I have bought into Nam Lee partly because it is the sole supplier to carrier, granted margins might not be good, but at least the contract would have locked out other competitors. If the contract is not going to be a 5 year contract, or worse, not renewed, then the business outlook is going to be quite dark.

Enquiry to Nam Lee through email draw a blank.

Vested, but rethinking about its longer term prospect