United Envirotechhas placed out 98m new shares to buyout firm KKR at S$0.50 apiece to raise US$40m. The proceeds from this placement is meant for further acquisitions of water plants, upgrading of existing plants and working capital. This follow-on investment by KKR reinforces UENV's ability to capture acquisition opportunities as they rises. It also raises KKR's potential stake in UENV to 46% of enlarged capital if the latter convert an earlier convertible bonds issue. In view of KKR's dominant position in UENV, we do not rule out the possibility of an eventual buyout/privatisation by KKR. We will review our TP lower post share count adjustment. Our current TP is S$0.69 (based on fully dilution of convertible bonds into 302m shares) / S$0.92 (based on existing share cap).

Separately, United Envirotech is acquiring 350m vendor shares in Memstar Technology at S$0.10 per share for S$35m. The purchase consideration will be satisfied by cash and issue of 18m UENV shares at S$0.50 per share. Upon completion, UENV will own approximately 13.18% of the existing issued and paid-up capital of Memstar. The Memstar Group is a leading manufacturer and supplier of PVDF hollow fibre membrane, membrane products and integrated membrane systems service, and one of the few manufacturers of high performance PVDF hollow fibre membranes in the world today. UENV has been one of the major customers of Memstar Group and is also one of the largest users of Memstar's membrane products in China.

Hi-P holds back expansion plan amid challenging climate. It will half the size of the initial S$300m expansion to double production capacity to S$150m and pace out construction given challenging business conditions. We will review our earnings forecast post this announcement but we maintain our view that operating environment remains challenging for Apple's suppliers in the near term due to overcapacity now.

Yongnam Holdingsannounced that its ADRs will commence trading on the OTCQX starting 8 January 2013. This market platform will allow Yongnam shares to trade more easily on an international basis, enable the Company to diversify its shareholder base, encourage trading liquidity, and improve access to new capital markets.

In property news, a new benchmark unit land price - higher by a whisker - is believed to have been set for residential land here. Based on caveats evidence, Hong Kong's Swire Properties is thought to have bought all 12 units in the four-storey Hampton Court for $155m. This is understood to work out to $2,526 psf ppr, which is inclusive of an estimated development charge of $22.3m. This is slightly

higher than the standing record by just $1 psf ppr set in November 2007, when Westwood Apartments in Orchard Boulevard was bought by YTL for $2,525 psf ppr.

A Wheelock Propertiesunit has put in the highest bid of $789.89 psf ppr for a private residential site at Ang Mo Kio Avenue 2. Demand was strong for the 99-year leasehold site with 12 bids put in, which included some big name developers. Wheelock's bid translated to an absolute sum of just over $550m, compared with the second highest offer of $536.2m, or $770.08 psf ppr, from a CapitaLand unit, and also higher than market expectations of $560 to $650 psf ppr. The market expects breakeven prices of between $1,180 and $1,300 psf, and selling prices of between $1,350 and $1,600 psf.

Source: DBSV