United Envirotech

United Envirotech: United Envirotech (UEL) has set up a 49/51 JV with Chengdu Xingrong Investment (XRI), to provide engineering, procurement and construction services using UEL's membrane technologies, as well as to undertake water treatment projects in the western China. XRI is a prominent water company in China who owns about 5m tons/day of water treatment concessions. To kick start the JV, the company will undertake its first project worth Rmb1.5b ($300m) immediately, to expand and upgrade wastewater treatment plants and recycling of treated wastewater with combined capacity of 1m tons/day. The project is expected for completion by end-2015. Maybank-KE believes that strategic partnership with local players would offer leverage for UEL to expand into Western China. However, house maintains its Hold rating ($1.44 TP), due to UEL's rich valuation of 30.3x forward P/E, above SGX-listed peers' average of 22x. Latest broker ratings: OCBC places it Hold rating and $1.43 TP under review