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United Envirotech Ltd - By WestComb
Target Price S$0.110
Potential increase in revenue of S$8-9 million: To date, UEL has bidded for jobs amounting to S$87 million. According to management, the results of contract awards will be announced by end of March 2009. If awarded, the firm is allowed to book in about 10% of contract value as sales, representing approximately S$8.7 million. The management also revealed that the profit margin of sales recognized during the initial stage is generally higher, ranging from 30 to 40%. Based on that, the potential upward adjustment on earnings in FY09 is about S$3 million.
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