Highlights from Tuan Sing’s First Quarter Results Release

For the first quarter of 2014, Tuan Sing Holdings  (SGX: T24) posted a year-on-year revenue decline of 6% to S$61.3 million. The company has four main business segments: Property; Hotel investments; Industrial Services; and Others.

The slip in revenue for the quarter was due mainly to lower sales from the Industrial Services segment on the back of lower tyre and commodity trading activities. However, a 49% year-on-year rise in revenue from the Property segment, due to progressive revenue recognition for units sold at Seletar Park Residence as well as additional rental income from Robinson Point, helped dampen the slump.

Meanwhile, Tuan Sing’s net profit rose 33% year-on-year to S$7.7 million, up from S$5.8 million in the previous year.

As of 31 March 2014, the firm had total borrowings of S$917 million, unchanged from three months ago. This translated to a gross gearing ratio of 1.19; gross gearing is calculated by dividing the total debt by total equity. With such high leverage, it might be worthwhile for investors to keep an eye out on Tuan Sing’s balance sheet to ensure that the company’s not overstretching its finances.

The firm used S$3.2 million in cash from its operating activities in the first quarter of 2014. In comparison, the company had generated operating cash flow of S$12.5 million in the corresponding period in the previous year.

Thus far, Tuan Sing has sold 582 units at Seletar Park Residence, Sennett Residence and Cluny Park Residence with a total order book of $745.6 million. Most of the revenue and profit from the projects are expected to be recognised in both 2014 and 2015.

The company said it will continue its property development business and acquire more investment properties, despite the property cooling measures in both our shores and in China. The firm added that it will explore opportunities in the region as well.

Shares of Tuan Sing last changed hands at S$0.35 on Tuesday. It is currently trading at 10 times its trailing earnings.

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The information provided is for general information purposes only and is not intended to be personalised investment or financial advice. Motley Fool Singapore contributor Sudhan P doesn’t own shares in any companies mentioned.