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SIIC Environment 1HFY2014 profit up 61%

250-Zhou-JunSIIC Environment executive chairman Zhou Jun.
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MAYBANK KIM ENG has maintained its ‘Buy’ call on SIIC Environment after it posted a 60.9% year-on-year (yoy) increase in its net profit attributable to shareholders to Rmb 129.6 million for 1HFY2014.

Analyst Wei Bin has a target price of 20 cents for the stock, based on a PE of 30x FY15E.

He said: “SIIC’s future growth will depend on more acquisitions, in our view.

"We believe there are sufficient targets in its pipeline.

"With its recent Rmb 700 million (S$141.4 million) share placement and strongest balance sheet among peers, it should have sufficient muscle to execute its acquisition plan.” 

Group revenue for 1HFY2014 increased by 41.3% to Rmb 679.6 million, driven by the following:

1) 121.1% yoy increase in revenue from the construction business segment to Rmb 278.5 million.

2) 15.6% yoy increase in revenue from the water treatment and water supply business segment to Rmb 369.8 million

3) Maiden contribution of RMB12.5 million from the waste incineration business segment.

Group revenue was boosted due to contribution from its newly acquired subsidiaries - Shanghai Qingpu (wastewater treatment), Shanghai Pucheng (waste to energy) and Dazhou Jiajing (waste to energy).

Net profit margin improved by 0.6 percentage points to 24.6% year-on-year.

The Group has also forayed into Northeastern China by acquiring 25% in Longjiang Environmental Protection Group, one of the leading water players there.

Recent story: SIIC ENVIRONMENT -- 22 C Target; ISOTeam -- 52 Cents

Yongmao 1QFY2015 net profit up 176.5%

200_Sun-TianExecutive director Sun Tian. Company photoWeaker construction activity in China has resulted in Yongmao Holdings posting a year-on-year fall in 1QFY2015 Group revenue by 11.2% to reach Rmb 229.5 million.

PRC sales fell by 31.7% year-on-year to Rmb 133.4 million, contributing 58.1% of Group revenue.

The good news is: Its export sales to Europe, Middle East and Asia grew across the board by 628.9%, 208.5% and 12.8%, respectively.

There was significantly higher demand especially from Russia/Belgium, Israel/UAE, Malaysia and Hong Kong/Macau.

Average gross profit margin expanded by 7.8 percentage points to reach 31.6% mainly due to higher overseas sales and rental and service income which generated higher margins.

In addition, there was no provision for stock obsolescence in 1QFY2015 compared to 1QFY2014.

Net profit attributable to equity holders increased 176.5% to RMB36.2 million in Q1 FY2015 from RMB13.1 million in Q1 FY2014.

This was mainly due to higher gross profit, other income and income tax expense, partly offset by lower operating expenses.

The Group expects demand for tower cranes in South East Asia markets such as Malaysia and new markets like Myanmar to improve due to an increase in construction activities there.

It also expects the sale and rental of tower cranes to increase in line with infrastructure development in both Hong Kong and Macau.

Recent story: YONGMAO's CFO Makes It To Top 20 Shareholders' List

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