Thursday, May 17, 2012
United Engineers - Outperform by CIMB
CIMB gave an Outperform call on United Engineers (UE) with a target price of S$2.83. According to CIMB, 1Q12 core was within expectations at 12%. With UE trading at 35% discount to RNAV, perhaps now is the good time to look at this stock.
I have been watching this stock for some time since the good old Wallstraits.com days but never ever bought into it. Believe that it has been paying solid dividends too. 1Q12 property rental revenues was up 22% year on year on contributions from the mixed development (retail + business hotel) at Rochester. Completion of UE BizHub East (office, retail and hotel mixed development) will also provide further recurring rental income. The bulk of it is expected to flow in during FY13 based on expected end 2012 completion date.
Just in case you are a foreign investor, Rochester is located conveniently near Buona Vista MRT and is connected to both the East West MRT line and the newly opened Circle Line MRT station. The entire Buona Vista area in Singapore is being transformed with various offices, business parks and retail outlets ongoing. I think it will be exciting to see how UE grows further. UE also has one of the highest dividend yields compared to the other property developer counters listed in Singapore.