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NRA Capital Pte Ltd

Written by: Jacky Lee

Monday 11 May 2015

TEE International – Press release

Awarded S$130m worth of new contracts

We keep our earnings forecasts unchanged, fair value remains unchanged at S$0.33 and maintain Overweight.

TEE International Limited was awarded two contracts worth approximately S$130m, thereby crossing the half a billion dollar mark with a total outstanding order book of about S$540m to date.

The first contract was awarded by FCL Property Investments Pte Ltd (a wholly-owned subsidiary of Frasers Centrepoint Limited) to provide Addition and Alteration (A&A) works to Centrepoint Shopping Centre located at Orchard Road. The A&A contract, which is worth approximately S$30m, is the second project that TEE has been given by Frasers Centrepoint Limited in recent months.

Earlier in April this year, TEE was also appointed by FC Commercial Trustee to provide engineering works for Frasers Tower, a 38-storey Premium Grade A office tower linked with a retail podium, located at Cecil Street in Singapore’s Central Business District.

The second contract that is worth RM266.8m (approximately S$100m), was awarded by TEE Resources Sdn Bhd, an indirect wholly-owned subsidiary of TEE Land Limited, to PBT Engineering Sdn Bhd, an indirect wholly owned subsidiary of TEE. This IPT contract has been given approval at the last EGM. PBT Engineering was appointed as the main contractor for the execution and completion of TEE Resources’ mixed-used development project, Third Avenue, in Cyberjaya, Malaysia.

Our view:

Despite a record order book, we keep our earnings forecasts unchanged for the time being (we already project record engineering sales in both FY05/16 and FY05/17). We see TEE International’s gross profit margins remaining volatile quarter on quarter given its revenue recognition is not in line with its overhead cost spending on its projects, but should maintain between 10% and 20%. Fair value remains unchanged at S$0.33 and maintain Overweight.


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