550sinopec_demoUnited Envirotech announced on 9 October a framework agreement for a JV with a leading PRC water treatment player, Chengdu Xingrong Investment, to provide EPC services using Memstar membrane technology and products. Company photo

Excerpt from analyst's report


Maybank Kim Eng analyst: Wei Bin

United Envirotech has signed a framework agreement with Chengdu Xingrong to set up a 49:51 JV. Xingrong is a water SOE listed in China’s A-share market. It has a market cap of SGD3.5 billion and owns about 5 million tonnes/day of water-treatment capacity.


570_LinYuCheng_GeHailin“The growing market share of membrane technology for upgrading, expansion and recycling is great news for our Memstar membrane products. Some S$60 million worth of Memstar membrane products will be used for our first block of projects with Chengdu Xingrong.” - United Envirotech executive chairman, Dr Lin Yu Cheng (left).

To his left is Memstar founder and executive chairman, Dr Ge Hailin. NextInsight file photo
The JV will provide EPC services using UENV’s membrane technology and products. It will also invest in water-treatment projects in Western China.

Its first block of projects will involve the expansion and upgrading of wastewater treatment plants and recycling of treated wastewater with a combined capacity of 1m tonnes/day.

Valued at more than CNY1.5 billion (SGD 300 million), the jobs will commence immediately and are expected to be completed by end-2015.


Right way to expand, in our view: We believe strategic partnerships with local players are the right way to expand for UENV. Xingrong is one of the largest water companies with a stronghold in Western China. UENV can leverage its local presence to penetrate new markets.

Still, in view of a lack of immediate catalysts, maintain HOLD and SGD1.44 TP, at 27x FY3/15E P/E, 10% discount to peers due to its smaller recurring income base. Valuations are rich at 30.3x FY3/15E P/E. We still prefer HanKore and SIIC in the sector.

UEL_stkpx_10.14At $1.32, United Envirotech's stock price is up by more than 60% year-to-date.
Bloomberg data



Related story: MEMSTAR PTE LTD: What's next post UEL merger?

You may also be interested in:


You have no rights to post comments

Counter NameLastChange
AEM Holdings2.3400.040
Avi-Tech Electronics0.260-0.005
Best World1.7400.040
Broadway Ind0.095-0.001
China Sunsine0.380-0.010
ComfortDelGro1.3700.010
Delfi Limited0.9400.010
Food Empire1.400-0.020
Fortress Minerals0.280-
Geo Energy Res0.350-0.010
GSS Energy0.027-
Hong Leong Finance2.4800.010
Hongkong Land (USD)3.080-0.070
InnoTek0.440-
ISDN Holdings0.310-0.010
ISOTeam0.035-
IX Biopharma0.0460.005
Jiutian Chemical0.0250.001
KSH Holdings0.250-
Leader Env0.050-
Medtecs Intl0.1330.002
Nordic Group0.335-
Oxley Holdings0.0910.001
REX International0.137-0.009
Riverstone0.6850.020
Sinostar PEC0.125-0.010
Southern Alliance Mining0.600-
Straco Corp.0.500-
Sunpower Group0.220-
The Trendlines0.084-0.001
Totm Technologies0.0220.001
Uni-Asia Group0.800-0.015
Wilmar Intl3.330-0.030
Yangzijiang Shipbldg1.7900.010
 

We have 1751 guests and 2 members online

rss_2 NextInsight - Latest News