Tiong Woon delivered strong December 2008 quarter results with net profit jumping 75% YoY to S$12.1 mn, on revenue growth of 38% YoY, driven by strength in its heavy lift and haulage (up 46% YoY), and trading operations (up 251% YoY).

Excluding S$1.2 mn in gains from the disposal of seven units of used cranes during the quarter, core earnings would have jumped by 68% YoY, with six months-to-date results achieving 59% and 63% of our full-year revenue and earnings estimates, respectively.

Management has hinted at a peaking of the crane rental market, and guiding for rates to decline by 10-15% sequentially in 2H09. Like competitor Tat Hong (reporting interims on 13 February), tight credit markets are challenging its trading/distribution operations.

We have raised our estimates by 1-4%, but maintain our target price at S$0.25. While Tiong Woon‘s operational outlook remains firmly supported by the many ongoing oil and gas activities and the rollout of the public sector infrastructure projects, its low liquidity is likely to impede share price performance. Maintain NEUTRAL rating.