Tiong Woon Corporation Holding Ltd 2025 AGM: Financial Performance, Overseas Expansion, Dividend Policy, and Strategic Updates

Summary of the AGM Proceedings

Tiong Woon Corporation Holding Ltd (“TWC”) held its Annual General Meeting (AGM), where the company presented detailed updates on its financial performance, strategic direction, and operational outlook. All resolutions tabled at the meeting were passed with overwhelming shareholder support, with most ordinary resolutions receiving 100% of votes in favour.

Key Resolutions Passed

Adoption of Financial Statements: The Directors’ Statement and Audited Financial Statements for FY2025 were adopted unanimously, reflecting confidence in the company’s financial reporting.
Final Dividend: A one-tier tax-exempt final dividend of 1.75 Singapore cents per share for the year ended 30 June 2025 was approved, signalling the company’s ongoing commitment to shareholder returns.
Directors’ Fees: Directors’ fees for FY2025 were set at S\$152,000, down from S\$208,000 the previous year, reflecting tighter cost control.
Re-election of Directors: Mr Ang Kah Hong and Mr Ang Kha King were re-elected as directors, ensuring continuity in leadership.
Re-appointment of Auditors: PricewaterhouseCoopers LLP was re-appointed as the company’s auditors.
Share Issue Mandate: The board was authorised to issue shares up to 50% of the issued share capital, with a maximum of 20% on a non-pro-rata basis. This provides flexibility for future capital raising and growth initiatives.
Renewal of Share Purchase Mandate: The company can now repurchase up to 10% of its issued shares at a price not exceeding 105% (on-market) or 120% (off-market) of the average closing price, giving the board an important tool for capital management.

Financial and Strategic Highlights

Capital Expenditure and Cash Flow

Significant CAPEX: The Group incurred capital expenditure of over \$60 million in FY2025, with projected CAPEX for the following year between \$40–\$50 million. Despite this, the Group maintains a strong cash position of about \$65 million, and management is confident in sustaining dividend payments as well as pursuing strategic acquisitions.

Investor Note: The high CAPEX and reduction in net cash could be price sensitive, especially if future acquisitions or expansion plans are announced. The ability of TWC to maintain dividends in the face of high CAPEX is a positive signal for income-focused investors.

Operational Performance and Utilisation Rates

Heavy Lift and Haulage: Segment utilisation declined slightly from 56% to 54% due to equipment mobilisation for overseas projects.
Marine Transportation: Saw a significant improvement in utilisation—from 28% to 43%. Overseas projects in Brunei and Thailand provided strong momentum.

Growth in Overseas Markets: Thailand revenue rose from \$3.4 million in FY2023 to \$11.4 million in FY2025. India is also emerging as a key growth market, and the Group is exploring opportunities in the Middle East, especially in data centres, power plants, and e-commerce infrastructure.

Return on Equity (ROE) and Market Positioning

ROE Concerns: The current ROE stands at 6%, which is below benchmarks set by tech companies and banks. Shareholders raised concerns about pricing power and whether TWC is capturing sufficient value from its capital-intensive operations. Management is actively working to strengthen its commercial capabilities and evolve into a premium solutions provider, positioning itself as a strategic partner rather than just a rental service.

Leadership Changes: New COO, Mr Tan Guan Liang, and CFO, Mr William Tan, bring fresh perspectives and operational experience, signalling management’s intent to drive efficiency and specialisation.

International Expansion Strategy

Strategic Partnerships: The company is cautious about overseas expansion, prioritising collaboration with reputable local partners (e.g., partnership with Mammoet in Thailand) to mitigate risk. Shareholders urged TWC to consider equity partnerships to strengthen capital and local expertise, rather than relying solely on internal resources.

Equipment Rental Costs

External Rental Spike: External equipment rental expenses surged to \$11.9 million in FY2025, due to overlapping projects and fleet capacity constraints. Management indicated this was a one-off event and is focused on improving internal asset utilisation, currently below 50%.

Investor Note: Elevated rental costs can compress profit margins and may be price sensitive if not managed in subsequent periods.

Receivables and Impairments

Allowance for Impairment: The Group holds a \$23 million allowance for impairment of trade receivables, with the largest single exposure (> \$10 million) relating to a Saudi customer from a project completed over a decade ago. The remaining \$13 million is spread across overseas markets, where collection cycles are longer.

Investor Note: Large impairment allowances may concern investors about credit risk in certain overseas markets. Nevertheless, management has demonstrated success in recovering aged receivables.

Payables and Working Capital

Reduction in Other Payables: Other payables dropped from \$62 million to \$34 million, reflecting the settlement or refinancing of capex-related obligations. The Group’s cash position has doubled from \$30–\$40 million to \$60–\$80 million, underlining disciplined liquidity and working capital management.

Foreign Exchange Exposure

Forex Losses: Annual forex losses of \$1–\$2 million continue to affect the Group, mostly from intercompany balances. SGD strength is generally unfavourable, while USD and INR strength are positive.

Investor Note: Persistent forex volatility may impact future earnings, especially as the Group’s overseas exposure increases.

Market Dynamics and Competitive Position

Integrated Solutions: TWC differentiates itself in the fragmented mass-market rental segment by offering integrated engineering and installation solutions, serving sectors such as semiconductors, oil & gas, and data centres. While charter rates in mass-market rentals remain stable, competition is increasing in high-capacity segments, especially from Chinese players.

Customer Diversification: TWC avoids over-reliance on single clients or sectors, maintaining a diversified portfolio across regions and industries.

Headcount and Cost Structure

Rising Wage Costs: The Group’s global headcount stands at 1,300, with 800 in Singapore. Wage expenses increased from \$49 million in FY2024 to nearly \$56 million in FY2025, attributed to expansion and core inflation. Management expects wage-related costs to continue rising.

Shareholder Sentiments and Strategic Outlook

Shareholders expressed appreciation for management’s responsiveness, improved dividend policy, and overall financial discipline.
Concerns remain about the Group’s ability to capture higher ROE, manage forex risk, and successfully penetrate overseas markets.
The potential for future strategic moves—including partnerships, acquisitions, or capital market reforms—could be price sensitive, especially if they lead to significant changes in the company’s capital structure or market positioning.

Potential Price-Sensitive Issues

Large planned CAPEX and ongoing expansion: Any announcement about acquisitions, strategic partnerships, or entry into new markets could materially affect share price.
Share buyback mandate: The renewed share purchase mandate gives the board flexibility to support the share price or manage capital more proactively.
Dividend sustainability: Management’s assurance of maintaining dividends despite high CAPEX is a positive signal.
Receivable impairment: Persistent high impairment may worry investors about overseas credit risk, but ongoing recoveries alleviate some concerns.
Cost control and efficiency: Management’s efforts to improve operational planning, asset utilisation, and cost structure are crucial for future profitability.
Foreign exchange exposure: As the Group expands abroad, forex volatility may increasingly influence results.
Potential capital market changes: Shareholders encouraged management to be proactive about Singapore’s capital market reforms, and even consider privatisation or strategic consolidation if benefits of listing diminish further.

Disclaimer: This article is for informational purposes only and does not constitute investment advice. Investors should conduct their own due diligence and consult professional advisers before making any investment decisions. The views presented are based on the official minutes and shareholder Q&A from the company’s AGM and may not reflect future developments or management actions. The content herein does not guarantee any investment outcome or future share price performance.