Friday, April 19, 2013

TEE International : Reaching Into New Markets (SIAS)


TEE International
 Intrinsic Value S$0.475
 Prev Close S$0.370
Reaching Into New Markets

TEE International Limited’s (TEE) 9M FY13 revenue was up 22.6% to S$127.7m. Since our last update on 11 January 2013, TEE has been aggressively growing its portfolio with new projects in Thailand, Singapore and New Zealand. It even plans to tender for a project in Myanmar with its business partners. The proposed listing of TEE’s property development arm saw progress as TEE Land managed to secure total investment of S$4.0m from certain Pre-IPO investors. (Increase Exposure).


Positive on Business Developments: We like how TEE is sustaining momentum with its multi-faceted portfolio. The new land sites acquired over the last three months included industrial, commercial and hospitality projects, spread around the region.

For instance, TEE is developing a workers’ accommodation project in New Zealand to capitalize on rebuilding efforts at Christchurch and to take advantage of future capital appreciation potential.

Over in Myanmar, TEE has tied up with Yongnam Holdings Limited, Samwoh Corporation Pte Ltd, JGC Corporation and Changi Airport Planners & Engineers Pte Ltd to jointly tender for an airport project, which the consortium has already been pre-qualified for. This project comes on the heels of a November 2012 MOU to develop and operate a cement plant in Myanmar.

Existing projects also saw steady sales. The Duku Road and Camay Court projects are respectively already 80% and 90% sold versus 49% and 71% in our last update. Contracted sales for Singapore property developments (excluding associates) rose from S$48.8m a quarter ago to S$81.1m as disclosed in this results announcement.

Our View: We are of the view that these projects showcase the strength of TEE’s capabilities and business reach. Meanwhile, the proposed listing of TEE Land continues to be a potential positive catalyst for TEE. As such, we keep our forecasts and valuation on TEE unchanged for now.

Recent Key Projects & Activities
Notable Projects: Of the projects that TEE announced, the JV to acquire the commercial property at 160 Changi Road stands out for its quantum. TEE’s share of the land cost is about S$20.4m. On a unit basis, the land cost is about S$1,254 per sq. ft.

The New Zealand project marks TEE’s first foray into this new market. Instead of a plain vanilla residential or commercial development, TEE has earmarked the site for conversion to a workers’ temporary accommodation and will be adding capacity to house up to 300 guests. TEE’s objective is to meet potential demand for good quality medium term housing from skilled construction professionals, who are participating in the rebuilding of Christchurch, as well as displaced residents.

Based on the press release, we gather that this property is centrally located in the city and thus enjoys a location advantage. We reckon that TEE will enjoy some price appreciation potential from this site at the completion of the rebuilding of Christchurch.

Finally, TEE is participating, as part of a consortium, in a tender to perform specific works for the construction, management, operation and maintenance of the Hanthawaddy International Airport in Myanmar. TEE’s effective stake in this project is a maximum of 15%. We reckon that TEE will most likely take on the M&E works for the project if the consortium is successful in the tender.



Source/Extract/Excerpts/来源/转贴/摘录: SIAS-Research,
Publish date: 13/04/13

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