United Envirotech

United Envirotech: Inks another project in Jiangsu. Grp has inked an agreement worth RMB200m (S$40m) with the local government of Siyang County, Jiangsu Province, for TOT (Transfer-Operate-Transfer) and BOT (Built-Operate-Transfer) projects in an industrial park for the textile industry. Management intends to finance its latest investment using proceeds from the previous convertible bond issue to KRR and bank financing. Based on its usual 40% equity/60% debt financing model, UEL would need around $5.6m for Phase 1 of the TOT project, which should not be an issue as it is currently sitting on $63.2m of cash (as at 31 Dec 2012). In light of the latest investment, house bump up FY14 estimates for revenue by 1.5% and earnings by 4.9%; this in turn raises our fair value from $0.88 to $0.90, still based on 13x FY14F EPS. Maintain BUY.