DMG maintains EPURE’s fair value at 75 centsAnalysts – Selena Leong & Terence Wong:
Potential contracts ahead. The recent contract win in Hainan where eight wastewater treatment plants’ operations were “bundled” and awarded to one party (the first of its kind) could be an emerging trend among other provincial governments.
This could indicate similar type of contract wins to come as winning this landmark contract further strengthens Epure’s market position and paves the way for it to secure more of such deals as well as more EPC and BOT projects going forward. With that, we believe that these potential orderflows will help maintain, if not boost, order books.
Maintain BUY, fair value of S$0.75. With the positive industry outlook, we are expecting continued growth in revenue from Epure’s project wins. Applying a P/E of 14x to Epure’s FY10 earnings, we derive a target price of S$0.75.Maintain BUY.
CIMB-GK downgrades TAT HONG’s target price to 92 cents
Analyst – Kenneth Ng
Results well below; maintain Underperform. 2Q10 core net profit of S$5.8m (-74% yoy) came in way below expectations, forming 12% of our FY10 estimate and11% of consensus.
Impact of the downturn lingers as revenue across all but one segment fell sharply.
1H09 core net profit of S$16.4m forms 33% of our FY10 forecast.
We cut our FY10-12 EPS estimates by 20-33% in view of weak business environment and downgrade our target price from S$0.99 to S$0.92, based on 8xCY11 P/E (20% discount to 5 year avg) as we roll over to end CY10.
We keep our Underperform rating on TAT as demand for cranes remain weak and valuation forTAT seemingly expensive against peers. Interim dividend of 1 ct per ordinary and convertible redeemable preference share was declared for the quarter.