United Envirotech Limited (UEL) posted a stronger showing in 2QFY15, with revenue jumping 103% YoY to S$105.4m, driven largely by higher EPC revenue (+105%). Reported NPAT also surged 134% to S$16.7m, while underlying NPAT rose 133% to S$16.6m. 1H revenue climbed 79% to S$171.7m, meeting 60% of our full-year forecast, while reported NPAT added 205% to S$39.2m; core earnings of S$24.9m met 62% of our estimate.

Going forward, management intends to continue to harness its strength as a fully-integrated waters solutions provider to secure more water assets and engineering projects in China. UEL is also upbeat about its newlyacquired membrane manufacturing operations, citing the stronger demand for membrane products in China and USA.

We will be speaking with management to get more clarity on its project pipeline and prospects. Until then, we place our Hold rating and S$1.43 fair value under review.

Source: OCBC Research - 12 Nov 2014