Thursday, January 3, 2013

United Envirotech

United Envirotech: DBSV Initiates coverage with BUY Call & TP of $0.69 House expect earnings breakthrough as recurring income streams gather momentum. Valuations attractive at 8x/7xPE for 75%/21% net profit growth in FY14F/15F, industry averages 13x. Note that potential upside from acquisitions & expansion; CB dilution can be potential overhang. House SOTP TP is based on 10x PE for EPC and DCF valuation (8.6% WACC) for treatment. House have also assumed full dilution of the $136.2m convertible bond to KKR.

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