TEE International

TEE International: OCBC notes that its FY13 PATMI of $13.1m was judged to be somewhat below its full year expectations. However, FY13 top-line increased 51% to $216.4m as the group recognized higher levels of contributions from engineering and property development projects. The order book of the engineering segment now stands at $215.4m, which remains fairly stable on a y/y basis. OCBC believe the spinoff on TEE Land will yield a few key benefits. First, a separate listing structure would allow the equity market to value the property segment alongside similar property peers. Second, this IPO would raise significant capital for growing the engineering, infrastructure and property development businesses. OCBC has a HOLD rating for TEE International, with TP of $0.38. House believe the downside may be capped from here, given the yield of 6.8% on the last closing price of $0.37.