Sound Global (former Epure)

Sound Global (former Epure) +7.7% to 2-week high of S$0.84 in active trade as sharp improvement in 1Q10 results fuels hopes earnings momentum will remain strong in coming quarters. While 1Q seasonally weakest quarter for China-based water treatment firm, net profit rose 2.5x to Rmb45.5m vs Rmb18.2m year earlier as revenue jumped 74% to Rmb234m. Despite China's credit tightening, the group managed to secure US$600m credit line from China Merchants Bank to finance capital-intensive BOT projects. Expect stronger 2H with more contract flows. Share price supported by proposed dual listing in HK. Immediate resistance at $0.90.