United Envirotech looks to China for demand growth

And sustain net profit rally.

United Envirotech has just announced a 182% profit spike to S$29.2m, slightly beating market forecasts, on the back of higher engineering business revenues. OCBC Investment Research noted that the company sees China as a still-hungry market, especially for its membrane-based eater and waster-water treatment services, and the country will figure largely in its growth trajectory.

Here's more OCBC:

United Envirotech: FY13 results almost spot-on. United Envirotech Ltd (UEL) reported its FY13 results last night, with revenue jumping 117% to S$185.0m, or just 2% above our forecast, aided by higher engineering business (+132%) and also the 77% jump in water treatment business. Net profit surged 182% to S$29.5m, and was about 1.6% ahead of our estimate. UEL also declared a final dividend of S$0.005/share. Going forward, management continues to see growing demand for membrane-based eater and waste-water treatment services, especially in China; this mainly driven by stricter discharge limits imposed by the Chinese government and the shortage of water supply in various parts of the mainland. We will be speaking to management shortly to get greater clarity on its plans. Meanwhile, we are placing our Buy rating and S$0.90 fair value under review.