EPURE last closed at 82.5 cents.

EPURE INTERNATIONAL this morning announced a plan for a dual primary listing on the Main Board of The Stock Exchange of Hong Kong. It is the first Singapore-listed water-related business to do so.

The rationale given is the usual one: the dual listing will
provide the company with an additional channel to raise capital for its future business expansion, etc.

EPURE (82.5 ct) 

52-week Hi/Lo

Dividend yield0.93%
PE ratio22
Net Asset Value23.2 c
Unlike many a S-chip trading at under 8X PE, Epure can't be unhappy with the PE valuation it is getting in Singapore currently: Its stock trades at about 22X its 2008 earnings.

Epure (market cap: S$1 billionprovides water and wastewater treatment solutions in China. It is involved in engineering, procurement, construction and equipment fabrication.

It said it
has appointed Morgan Stanley Asia Limited as the sole sponsor to the proposed HK listing and the sole global coordinator for the Global Offering.

9 months ended Sept 09 (RMB ‘000)

% increase/


Gross profit295,29912.7
Profit before income tax215,0580.2
Profit after income tax212,01816.3

Attributable to equity holders


Epure proposes to allot and issue up to 430,000,000 New Shares. The issue price will be determined by the Company and Morgan Stanley.

The net proceeds are currently proposed for the following:  

(i) approximately 55% of net proceeds – for build-operate-transfer projects and other investment projects which the Company may identify in the future;  

(ii) approximately 20% – for R&D, upgrading the existing manufacturing facility and/or setting up of new manufacturing facility;

(iii) approximately 10% - debt repayment;  

(iv) approximately 10% -  for general corporate and working capital purposes; and  

(v) approximately 5% - for sales and marketing activities.

What Allen Jiao, analyst, UOB Kay Hian, said this morning:

Although HK-listed water treatment companies are trading at discount to their Singapore-listed peers, we believe the proposed dual listing of Epure will still trigger a re-rating for the company after the successful debut of China XLX (CXLX SP, 1866 HK) in HKSE recently.

”We remain positive on Epure due to its leadership position in the domestic water treatment sector, as well as its successful penetration into the global market. Maintain BUY with a target price of S$1.08 based on the peers' average of 22x 2010 PE.”


highlighted that the proposed HK listing will involve fairly extensive preparatory work over an uncertain time frame.

In addition, the listing is subject to, among others, the approval of SEHK and relevant authorities and the approval of the Shareholders at an extraordinary general meeting.

When the market opens in a few hours, trading of Epure stock (which was halted yesterday afternoon) is likely to be active.

Spillover interest could be seen in other water stocks such as United Envirotech, Sinomem Technology, Hyflux and Asia Environment.

In December, CIMB-GK Securities rated Hyflux, Epure and Sinomem Technology “outperform” with target prices of $4.02, $0.88 and $1.20, respectively.

Recent story: UNITED ENVIROTECH: Rising recurring income 


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