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Terence Wong, CFA

CEO and Executive Director
Azure Capital

Yongnam CEO Seow Soon Yong catches up in neighbourhood kopitiam

May 24, 2019

I had breakfast with Yongnam’s CEO Seow Soon Yong at our neighbourhood kopitiam. Yongnam completed a fundraising exercise the day before, raising S$15m through convertible bonds. My fund took up some. The past few years have been very challenging for Yongnam as projects got delayed. It is now at a cusp of a recovery, with order books growing to almost S$450m. Based on the host of public sector jobs up for tender, including Changi Airport, North-South Corridor and Jurong Region Line (MRT), Yongnam should see orders surpass the half-billion mark. To be clear, the company will still be making losses this year. Backed by the flow of projects, it should turnaround in 2020. It is trading at 0.3x price-to-book, which suggest that downside is limited. And there is a potential kicker. Yongnam’s record profits came after winning contracts from Marina Bay Sands back in 2008. The casino operator valued Yongnam’s quality, experience and speed. With the commitment by MBS to pour money into Phase 2 of development, Yongnam looks set to benefit once again. That’s a bet I am willing to take.