Wednesday, May 25, 2011

United Environment Tech

United Environment Tech: Reported FY11 results which were in-line, with rev at $78m, +12.8% yoy, while net profit at $16m, +7.8% yoy. Rev growth was mainly from increase in engineering segment at $68.2m, +9.2% yoy, while Grp’s recurring income from treatment business at $16m, +30.1% yoy. Other income at $5.8m, +204.9% due to negative goodwill arising from acquisition of Linhai during the yr…..

Gross margins also increased to 63.3% vs 56.9% yoy. Going forward, grp remains confident on prospects and tip increases in treatment capacity, to positively contribute to rev and continue its uptrend going forward. Expect PRC remain as the major contributor for Grp’s rev due to the greater mkt and demand for advanced membrane tech ….

We note that at current price, valuations appear undemanding, with grp trading at 10.5x FY11 P/E vs historical average of 14.2x and peers average of 17.7x.

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