SG: MARKET PULSE: Tee Int'l, China Environment (7 Oct 2013)

Stock Name: Tee Intl
Company Name: TEE INTERNATIONAL LIMITED

Research House: OCBC

Price Call: BUY

Target Price: 0.38

MARKET PULSE: Tee Int'l, China Environment

7 Oct 2013

KEY IDEA TEE International: Scrip dividend scheme in place Summary: Tee International announced that its scrip dividend scheme will apply to the final tax-exempt (one-tier) dividend of 2.5 S-cents per ordinary share for the financial year ended 31 May 2013. Management updates that the price for the new shares issued under the scheme will be set at not more than a 10% discount, nor shall it exceed the average of the last traded prices for the period between 9 Oct 2013 and 11 Oct 2013 (both dates included). We believe this scrip dividend scheme allows shareholders who are looking to re-invest dividends into the counter to do so conveniently, and also enable the group to retain such capital for allocation into future opportunities. While we hold our fair value estimate of S$0.38 per share unchanged, we are upgrading our rating to a BUY (from hold previously) on valuation grounds as the share price has weakened marginally from our last update. (Eli Lee) MORE REPORTS China Environment: Focus on air pollution control Summary: China Environment Ltd (CEL) is a provider of industrial waste gas treatment solutions in China, which is likely to benefit from the Chinese government's increased focus on cleaning up the environment in China. The Chinese government has reiterated its stance to clean up the environment, this time with the intent to spend RMB1.7t to combat air pollution, where a key focus is on reducing the amount of PM2.5 particle in the air. With its new facility in Anhui nearing completion, which will increase its capacity to process 80k tonnes of steel to over 350k tonnes, as well as the recent RMB80m share place, CEL feels that it has sufficient working capital to take on bigger and more jobs. We currently do not have a rating on the stock. (Carey Wong)

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