Boustead

Boustead: AmFraser initiates coverage with $1.91 TP. Note that Boustead is a progressive global Infrastructure-Related Engineering Services and Geo-Spatial Technology Group listed on the Singapore Exchange. Boustead’s Engineering services include Energy-Related Engineering, Water & Wastewater Engineering and Real Estate Solutions. Book value not reflective of true underlying market value. Boustead’s industrial leasehold properties are currently carried on its books at cost, which stands at approx. S$105.6mil. This is substantially lower than our revalued net asset value of S$238.2mil.A REIT listing could potentially catalyze the realization of the hidden value and trigger its share price outperformance. Building the recurring income stream. Boustead’s Geo-spatial division has traditionally been a cash cow, consistently generating stable recurring income between 2010-2013. House highlight that Boustead’s emphasis on expanding its design-build-lease portfolio would further strengthen its recurring income stream. Forecast recurring revenue from these 2 segments to encompass 59% of Group’s profit before tax in FY14. Putting it all together. Relying on growth of its four distinct divisions, Boustead’s fortunes are not solely reliant on the cycle of just one division, and this will continue to leave it well-positioned to ride out economic uncertainties or downturns.