Some so-called aggressive, growth cos. reinvest (I hope they really do and not siphon it away) most of the profits into R&D to grow their business. In lieu of dividends, investors get to see capital appreciation over time. I don't mind the tradeoff. I am willing to give Dr Lin one more year before I unload, even if at a loss. I'll give him the benefit of the doubt, given the prevailing world economic climate.
devilman ( Date: 09-Feb-2010 12:25) Posted:
Make a lot of money. No dividend ? where the money goes to ?
that is why i dump this stock liao at 0.355... especially there are giving their staff discounted shares including the chairman, Dr Lin... himself at discounted price...
devilman ( Date: 09-Feb-2010 12:25) Posted:
Make a lot of money. No dividend ? where the money goes to ?
This co. has never paid dividend? Dr Lin should know better than to pay dividend if he wants to see his co stock price go up. Hyflux pays dividend.It pays to pay dividend, Dr Lin!
Dr Lin Yucheng, chairman & CEO, United Envirotech, has been a Singapore citizen since 1993. NextInsight file photo
DR LIN YUCHENG has reason to be delighted with his company's just-announced Q3 results but he is not thrilled that United Envirotech’s shares still trade at a sharp discount to its peers.
Over lunch with analysts last Thursday, Dr Lin, the chairman and CEO of United Envirotech, brought up his observation that the market was according his peers a much higher valuation.
Over time, the market could re-rate his stock - if United Envirotech continues to deliver handsome earnings growth.
There is a piece of public information that seems to point towards that happy outcome: United Envirotech has an order book of S$140 million for its industrial wastewaer treatement projects that would be recognized over the next 18 months.
That works out to an average of S$23.3 million per quarter, which is a significant increase as any back-of-the-envelope calculation will show.
RISING QUARTERLY REVENUE, RISING PROFIT
UNITED ENVIROTECH
Revenue (S$m)
Net profit (S$m)
Net margin (%)
Q1 (Apr – June)
8.9
1.1
12.4
Q2 (July –Sept)
11.3
3.1
27.5
Q3 (Oct –Dec)
18.8
5.15
27.5
Assuming Q4 (ending March 2010) sees revenue of S$23.3 million, the total revenue for the current FY 10 would be S$62.2 million (ie, S$38.9 m for the first 9 months + $23.3 m).
That is a 45% jump from the $42.9 million for the previous financial year.
Assuming the next financial year has S$23.3 million multiplied by 4 quarters in revenue, one would get $93.2 million, which would be an increase of 50% year-on-year.
Here the assumption is that United Envirotech does not enjoy any contribution from any new contract that it may get from now on.
That assumption is very conservative. Take a look at CIMB-GK’s forecast in a report on Jan 20 this year, as follows:
FYE MAR
2008
2009
2010 F
2011 F
2012 F
Revenue (S$m)
51.2
42.9
77.3
159.2
201.5
Growth (%)
116
-16
80
106
27
Net profit (S$m)
8.5
3.7
15.2
24.5
33.5
Growth (%)
363
-57
314
62
37
PE @ 34 c
13.3
36.9
9.8
6.1
4.4
Dividend
0.3
0.3
0.3
0.3
0.3
Dividend yield
0.9%
0.9%
0.9%
0.9%
0.9%
Source: CIMB-GK, Jan 20
In his Jan 20 report, CIMB-GK analyst Gary Ng forecasts far higher revenue for even this current financial year and for the next.
He has a target price of S$0.56, reflecting FY11 earnings, and 10x earnings multiple.
This is still below the mid-cycle valuation, and is at a discount to bigger peers who were re-rated upon awards of overseas contracts (e.g. Epure, Hyflux).
”We like UENV for its projects visibility in the municipal sector, and its proven execution in overseas projects," wrote Gary.
The company offers "excellent value" trading at 6.1x FY11 P/E against its 3-year core earnings CAGR forecast of 37%, according to him.
Recurring revenue increased in Q3 FY10 as a result of higher quantity of wastewater treated.
At the time of the report, the stock price was 34 cents, much higher than the 27 cents it closed at last Friday, pulled down by the overall market downturn.
Now, let's look at several highlights from the recent Q3 (Oct-Dec 09) results of United Envirotech, which operates in a niche servicing petrochemical giants such as Sinopec, CNOOC, and CNPC in China:
* Cash and cash balances stood at S$43.4 million. The company is in a net cash position.
* Net cash used in operating activities was $9.1 million (ie, there was a net outflow), mainly attributable to a $20 million tender deposit placed for a project. The money has since been returned to the company after Dec 31.
* Revenue stood at $18.8 m, which was 114.3% higher year-on-year.
* Net profit was $5.2 million, which was 383.6% higher year-on-year.
* Recurring revenue for treatment of wastewater at 5 projects that it maintains rose by $1 million, to $3.6 million, as a result of higher capacity of wastewater treated. United Envirotech's recurring revenue has been climbing over the years - an interesting trend of assured revenue, which could lead the company to spin off the water treatment business as a water trust.
This counter will surely be undervalued when they release their final 4Q (31 Mar 2010) financial report in Apr or May 2010. Base on their 3Q financial report, it is not difficult to see that their EPS will at least be at 3cts (1Q=0.28+2Q=0.78+3Q=1.19+4Q) or more.
Let say it is at 3cts and base on current PE Ratio of 14, we should be looking at 42cts by then.....just another positive thinking.
This counter will surely be undervalued when they release their final 4Q (31 Mar 2010) financial report in Apr or May 2010. Base on their 3Q financial report, it is not difficult to see that their EPS will at least be at 3cts (1Q=0.28+2Q=0.78+3Q=1.19+4Q) or more.
Let say it is at 3cts and base on current PE Ratio of 14, we should be looking at 42cts by then.....just another positive thinking.
After checking 30 and 55-day MA, both is horizontally runing for the past week with Stochastic & William touching the threhold of Oversold. This counter will stay around 28 - 30 cts for awhile, unless more bad news from the market else it should not be moving downward to far.
Bintang ( Date: 03-Feb-2010 21:30) Posted:
The dead cross has just formed , going down further is more likely .
> Revenue increased 114.3% to S$18.8 million in 3QFY2010 largely due to higher engineering contribution arising mainly from the recently secured Guangzhou EPC project
> Recurring treatment revenue from wastewater investment projects improved to S$3.6 million in 3QFY2010 in tandem with higher quantity of wastewater treated
> To focus on its twin-growth strategy of securing membrane-based industrial wastewater treatment projects and expanding into municipal wastewater investments and operation and maintenance (O&M) services to improve earnings and recurring income
dealer0168 ( Date: 03-Feb-2010 18:48) Posted:
United Envirotech’s net profit increases
383.6% to S$5.2 million in 3QFY2010
engineering contribution arising mainly from the recently secured Guangzhou EPC
project
Revenue increased 114.3% to S$18.8 million in 3QFY2010 largely due to higher
million in 3QFY2010 in tandem with higher quantity of wastewater treated
Recurring treatment revenue from wastewater investment projects improved to S$3.6
wastewater treatment projects and expanding into municipal wastewater investments
and operation and maintenance (O&M) services to improve earnings and recurring
income
To focus on its twin-growth strategy of securing membrane-based industrial
Yea....support your idea. Halt under they die......
Bon3260 ( Date: 02-Feb-2010 13:11) Posted:
Alot of pple Sell Shorts tis morning. U'll c rebounce in e late aftnoon. Cos those Sell Shorts pple'll buy back in e late aftnoon. I personally wished dat UtdEnvirotech'll Halt later. Cos I 1 2 c Sell Shorts pple die... ('',)
Alot of pple Sell Shorts tis morning. U'll c rebounce in e late aftnoon. Cos those Sell Shorts pple'll buy back in e late aftnoon. I personally wished dat UtdEnvirotech'll Halt later. Cos I 1 2 c Sell Shorts pple die... ('',)
Post Reply
661-680 of 1730
