Singapore Stock Market News

UE E & C - Constructing cash

StockFanatic
Publish date: Wed, 11 Dec 2013, 11:35 AM
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UE E&C is reaching out regionally to expand its business, while remaining cash-rich and maintaining its core strengths in Singapore. It is poised to enjoy bumper profits in FY14 and FY15 as earnings from its property development stakes kick in.

UE E&C has a strong local franchise and is now expanding regionally. Its stakes in property development offer earnings upside in the next two years as these properties reach completion. At 5.5x (0.5 s.d. above the construction sector's average forward P/E of 4.7x) P/E and our rough estimate of CY15 EPS of S$0.214, UE E&C could be worth S$1.18. This will still peg the fair value below an estimated BVPS of S$1.23 then.
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