UE E&C

UE E&C: CIMB highlights that UE E&C has a strong local franchise and is now expanding regionally. Notes UE E&C's stakes in property development offer earnings upside in the next two years as these properties reach completion. UE E&C's order book as at FY12 stood at a healthy $650m. The company can leverage its strong UE brand name to pursue contract wins. There are also potential synergies with WBL, which was recently taken over by UE E&C's parent company, UE. The company has been in a net cash position for the past three years, which provides a strong balance sheet to fund the continued expansion. CIMB, which does not have a rating on the counter, tips a 5.5x P/E valuation, which translates to a fair value of $1.18 for UE E&C, still below its 1x foward P/B.