Capital-raising may be on cards for IEV: UOB Kay Hian

Stock Name: IEV
Company Name: IEV HOLDINGS LIMITED

Research House: UOB KayHian

Price Call: HOLD

Target Price: 0.54

Capital-raising may be on the cards for IEV Holdings (5TN.SG) after it terminated an agreement for Altfield Global Resources to invest in wholly-owned unit IEV Energy Investments, UOB KayHian says; “we believe the group will need to raise US$10 million-US$15 million ($12.2 million - $18.3 million) to develop its upstream business.

As IEV is currently in a net cash position, the capital requirements could be funded by a combination of debt and equity.” It notes IEV’s 49%-owned associate IEV (Malaysia) received a Letter of Award for a major transportation and installation project by an established O&G operator for a Southeast Asian deepwater facility.

UOB-KH estimates the contract value at MYR400 million-MYR500 million ($159.5 million - $199 million), adding that its earnings forecasts already factor in the project’s profit contribution. UOB-KH trims its target to $0.54 from $0.55 on a lower market value for associate CNG Vietnam (CNG.VH); it keeps a Hold call. On a technical basis, it notes the stock has twice rebounded from its $0.435 support level and tips it could test its next resistance at $0.62 if it breaks over $0.54. The stock is up 7.3% at $0.515.

Capital-raising may be on cards for IEV: UOB Kay Hian

Stock Name: IEV
Company Name: IEV HOLDINGS LIMITED

Research House: UOB KayHian

Price Call: HOLD

Target Price: 0.54

Capital-raising may be on the cards for IEV Holdings (5TN.SG) after it terminated an agreement for Altfield Global Resources to invest in wholly-owned unit IEV Energy Investments, UOB KayHian says; “we believe the group will need to raise US$10 million-US$15 million ($12.2 million - $18.3 million) to develop its upstream business.

As IEV is currently in a net cash position, the capital requirements could be funded by a combination of debt and equity.” It notes IEV’s 49%-owned associate IEV (Malaysia) received a Letter of Award for a major transportation and installation project by an established O&G operator for a Southeast Asian deepwater facility.

UOB-KH estimates the contract value at MYR400 million-MYR500 million ($159.5 million - $199 million), adding that its earnings forecasts already factor in the project’s profit contribution. UOB-KH trims its target to $0.54 from $0.55 on a lower market value for associate CNG Vietnam (CNG.VH); it keeps a Hold call. On a technical basis, it notes the stock has twice rebounded from its $0.435 support level and tips it could test its next resistance at $0.62 if it breaks over $0.54. The stock is up 7.3% at $0.515.

IEV Holdings rated 'buy' by UOB Kay Hian

Stock Name: IEV
Company Name: IEV HOLDINGS LIMITED

Research House: UOB KayHian

Price Call: BUY

Target Price: 1.23

UOB Kay Hian in an Apr 25 research report says: "IEV has received a letter of award for a two-year contract from PT Unilever TBK to supply compressed natural gas (CNG) to its manufacturing plant in West Java, Indonesia. Pursuant to the award, PT Unilever will purchase more than 350,000 mmbtu of CNG over a two-year period.

"We expect this agreement will contribute US$5.0 million (RM15.0 million) in revenue and US$1.4 million (RM4.2 million) in gross profit from April 12 to March 14, assuming 28.0% gross profit margin.

"We maintain our earnings forecast as we have already factored-in an increase in CNG processing volume. Target price of $1.23 (unchanged), implying 80.9% upside from the current price. MAINTAIN BUY."

IEV Holdings up after contract win

Stock Name: IEV
Company Name: IEV HOLDINGS LIMITED

Research House: UOB KayHian

Price Call: BUY

Target Price: 1.23

Shares of IEV Holdings jumped as much as 10.3% after the engineering company secured a two-year compressed natural gas supply contract from PT Unilever Indonesia Tbk.

IEV shares were up 8.1% at $0.735, having surged 56% so far this year.

PT Unilever, which manufactures home, personal care and food products, will buy more than 350,000 million metric British thermal units of CNG.

The revenue of more than US$5 million ($6.23 million) from the contract is expected to boost the net tangible assets or earnings per share of IEV for the current financial year ending December 2012, the company said in a statement.

UOB Kay Hian expects IEV to increase CNG processing capacity to 1.5 million mmbtu per annum this year from 1 million. It also forecast production to rise to 1.4 million mmbtu by the end of 2013 from 1 million in 2011.    

“We see further earnings upside as we have not factored in gas volume growth and margin expansion arising from IEV's upstream expansion and gas concession,” UOB Kay Hian said, maintaining its buy rating and $1.23 target price on the stock.