Wolf Money(Tai Sin Electric）
Before I go for my CNY break. I took a small position in Tai Sin Electric. I find the business attractive due to its strong competitive advantages. It is a unique data centres, electrification and construction play combined. This old school company pulls the levers on the digital economy. Below are my thoughts.
1.) Tai Sin is the largest cable and wire company in Singapore.
2.) They supply cables to 70% of data centres in Singapore.
3.) Tai Sin Electric’s businesses are anchored on the construction boom in Singapore. Over the next few years with mega projects like T5, MRT, MBS, RWS 2.0 providing opportunities for Tai Sin Electric. Ten of thousands of kilometres in cables and wires will be needed.
4.) A play on Malaysia data centres with a strong presence in Malaysia and Vietnam.
5.) Capable and experience management in place.
6.) Stock is trading at 1.1x p/b with a 4.4% dividend yield at time of writing.
7.) There was a renewed push in EV during the recent budget announcement with the lowering of PARF. More charging stations will be required to fulfil the demand. More stations, more cables needed. Simple economic.
Risks
1.) High copper prices will affect margins, which the company experienced it recently. Copper made up more than 60% of the cable’s cost. They reporting lower earnings for 1H26 due to the same reason.
2.) Poor trade receivables are especially common in the construction industry where more than half of the companies in the construction sector experienced delays in payment. (None company specific)
Summary
Tai Sin is an important company in Singapore’s drive towards a digital economy as they provide the arteries of the digital world. Electrification of the economy will be more prevalent in the coming decades with AI, EV and robotics. High-tech companies can come out with amazing solutions using generative AI, but they still need Tai Sin’s cables to deliver the high performance. More details at the end of month update. God blessed. 🙏
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