OCBC raises United Envirotech target price
OCBC Investment Research raised its target price on water treatment firm United Envirotech Ltd to S$0.67 from S$0.50 and kept its 'buy' rating, citing better-than-expected quarterly earnings.
By 0235 GMT, United Envirotech shares were up 1.4 percent at S$0.37, and have gained 13.8 percent since the start of the year, compared to a 1.5 percent rise in the FTSE ST China Index <.FTFSTC>.
United Envirotech posted a second-quarter net profit that more than doubled to S$8.4 million from a year earlier, helped by strong engineering and treatment sales.
"United Envirotech continues to remain bullish on the waste-water treatment market in China, where demand for membrane-based services will continue to grow," said OCBC, adding that the upgrading of old water treatment plants also offered growth potential.
The brokerage noted that United Envirotech was on the lookout for more water projects in Shandong, Jiangsu and Liaoning to add to its portfolio and had a relatively strong financial position to do so.
With a cash balance of S$470.1 million as of the end of September, OCBC expects United Engineer to be able to finance up to S$175 million of projects.
Source: Reuters