Tat Hong Holdings braces for a profit loss in 4Q15

Its Australian business is underperforming.

Significant charges for the impairment of goodwill and assets are expected for Tat Hong Holdings in the short-term.

According to a report by OCBC, Tat Hong issued a profit guidance statement last Friday evening as the group expects to report a loss for 4QFY15, attributed to weak performance of its Australia wholly-owned subsidiary amid challenging business conditions.

However, the group expects to remain profitable for FY15, citing a stable underlying performance. Performance in Australia had remained a concern over the past quarters. Given the muted outlook for its key market, OCBC analysts reduce their fair value from S$0.75 to S$0.63.

However, as its share price has fallen by ~18% over the past five months, OCBC analysts think that the negatives may have been priced in.