Chasen

Chasen: its Technical & Engineering business segment secured a total of 4 projects worth ~$9.1m since 1 Jul ’13. The duration of the projects vary from 2 – 30 mths. The nature of the projects include: - steel structure and pipe racks of a pharmaceutical mnftg plant in Tuas, - metal scaffolding for building retrofitting and construction projects within Spore, - aircon and mechanical ventilation improvement works - tower mounted amplifier and device and machining of telco components for two telco mnftrs based in Suzhou, PRC The group is confident that momentum will continue and it should see more contract wins from both its Relocation and Technical & Engineering business segments over the remaining months of the financial yr. Mgt expects to be profitable for FY14. NRA has a results note on the 1QFY14 financials announced early Aug. Net profit was $0.3m, below its expectation of $1m, due to lower-than-expected sales and gross margin. Sales grew 8% yoy to $21.7m, mainly driven by the relocation business segment, which jumped 37% yoy to $6.6m, due to the commencement of several relocation projects in the PRC, Msia, and Vietnam. For its technical & engineering business segment, Chasen has broken new ground with its venture into a new market in Timor Leste. Mgt believes a massive rebuilding of the country’s destroyed infrastructure is underway, financed by its new found oil wealth and devt aid from developed economies and int’l financial institutions. The group has sepnt ~$3m capex in 1Q14 to embark on an eqpt rental and construction project financing scheme as its initial business in this new mkt. Despite the 1Q14 miss, the house believes more relocation orders will be secured in 2H. Keeps its rating at Neutral, but raises TP to $0.35 (from $0.28).