See Hup Seng

See Hup Seng (SHS): Voyage Research initiate on SHS with INCREASE EXPOSURE and TP of $0.56 (56% upside), given its robust fundamentals and positive growth prospects. On its Hetat acquisition, SHS will be given the exposure in the glass and steel structural frameworks industry, a future core business of SHS' recurring income sources on top of its Refined Petroleum (RP) and Corrosion Prevention (CP) business units. With construction demand forecasted to be between $20b and $28b annually in the next few years, Voyage expect Hetat to be able to win more contracts. Hence, potentially contribute more than the guaranteed earnings to SHS. In addition, House expect the RP business unit to see further improvements in cost efficiencies, higher revenue growth and may potentially move up the value chain, due to the concentration of petroleum refining operations in Singapore. Voyage also highlights its entry into the EC property development market via a JV with established players, as the project "Heron Bay" being fully sold and is expected to contribute $20m over the next 4 years.