Ferrochina reports a rise in turnover and net profit

China based steel processor FerroChina reported that turnover for 1Q06 increased to RMB784.2 million by 96.2% compared to last year. It also reported that net profit increased by 38.4% to RMB41.7m after providing for a RMB 6.3m income tax payment. In addition, the company expects that acquisition of a 35.45% stake in Changshu Everbright Material, that will be completed by April 06, would contribute positively to the group. FerroChina's share of Everbright's 1Q06 net profit would have been RMB25.5m. This would have boosted FerroChina's overall net profit to RMB67.3m and with two additional production lines coming on-stream this year and four more in 2007, Everbright's profitability is expected to increase significantly and further contribute to the group's bottomline. Furthermore, both Everbright and Ferrochina produces a different mix of products that caters to different customers.

However it should be noted that operating and selling costs have risen, while domestic prices of processed steel have dropped as demand drops due to the effect of China's clampdown on construction. Thus Ferrochina could be pressured by higher operating costs and could see its margins shrink by next year. At the last traded price of S$0.88, it has risen considerably against the IPO price of S$0.50 though P/E ratio based on FY2005 earnings stands at around 9.1x which is still fair.

Memtech could see increased earnings from new clients

China-based handset keypad manufacturer Memtech International have made news recently by announcing that it is targeting new multinational clients like Motorola, Siemens and HTC. Memtech's main customers currently are Lenovo and Bird, 2 large Chinese mobile phone manufacturers and analysts are banking that the move to attract these large clients would help in growth of earnings. For the year 2005, Memtech announced a drop in net profits from US$14.8 million to US$10.4 million. This is mainly due to the drop in market share experienced by Lenovo and Bird as well as increased cost of raw materials due to the rise in oil prices. The company is expecting its new clients to gradually form up to 20% of its revenue base. With the company giving out good dividends of 1.0 cents per share, the yield for its share is modest.

However, upside to the stock is expected after JP Morgan and Merrill Lynch both covered the stock in its analyst reports. JP Morgan states that with Memtech's earnings expectations for FY06, its share is presently trading at 9.7 times of FY06 earnings, which is high compared to more established Taiwanese keypad makers. Upside could still be maintained as it is still trading below its IPO price of S$0.55 and the current take up of China stocks.

Singapore Petroleum announces drop in earnings

Singapore Petroleum Company (SPC), which is controlled by the world's largest rig-builder, Keppel Corp, announces that its first quarter 2006 results dropped by 6.6% from S$72.7 million a year ago to S$69.7 million for 1Q2006. This drop in earnings is despite a growth in revenues from S$1.45 billion to S$2.2 billion. It is expected that the rising oil prices has made a dent in the refining margins enjoyed by SPC as it is mainly an oil refiner. However, SPC states that it expects improving refining margin for the rest of the year citing the lack of global refining capacity as the main reason.

It is also worth noting that the company has some stakes in oil fields being explored in Indonesia and Myanmar. Discoveries in these areas could lead to improvement in earnings as it stands to reap the benefits of higher oil prices. SPC's share price dropped 10 cents in today's trading as it ends the day at S$5.85.

UTAC announces purchase of NS Electronics Bangkok

One of the fastest growing companies in SGX, it has been a year of good news for United Test & Assembly Center Ltd. (UTAC). The company was admitted into the Straits Times Index this year and announced a huge jump in turnover and net profit. This week, it announced that it will pump in around S$500 million in Singapore amidst increasing demand for its services. Trading in UTAC's shares was halted on Friday morning and it turns out UTAC will purchase 68.45% share of NS Electronics Bangkok (NSEB) from UBS Capital and make an offer for the rest of the shares. The company plans to use an all cash offer of US$175 million for the purchase of all the shares in NSEB.

The acquisition of NSEB will allow UTAC to take over Taiwan's Powertech to become the world's 6th largest chip testing company. In addition, it will enhance the reach of UTAC as NSEB only have one overlapping customer with UTAC. NSEB made a net profit of around US$11.9 million for FY2005 and it is expected to be earnings accretive to UTAC for the year 2006. Overall, the fitting of the company into UTAC looks good and it should also increase EPS of the enlarged entity to be US$0.0335 from US$0.0306.

Capitaland strikes into India with a joint venture

CapitaLand enters into the Indian retail property market after it announced a tie-up with Mumbai-listed Pantaloon, which is also India's largest listed retailing group. The deal that was announced with Pantaloon includes:
1) Setting up a 50:50 JV retail management company to provide management services to retail properties owned or managed by Pantaloon and related funds, and future funds to be created by CapitaLand and Pantaloon. The JV company aims to manage a portfolio of about 50 malls, which equates to around 15m sqf of space worth US$1.2bn (S$1.9bn) across 30 Indian cities within the next two to three years.
2) Another 50:50 JV fund management company that will create a retail development fund, a retail income fund or retail real estate investment trusts (Reits) to capture the tremendous growth in the Indian retail real estate market. For such funds or Reits, CapitaLand plans to invest 20 to 40% as a sponsor, or wherever allowed under Indian regulations.
3) A US$75m (S$121m) investment stake in Horizon Realty Fund, an international fund sponsored by by Pantaloon. This fund, which will invest in predominantly retail real estate development assets in India, has an initial closing of US$263m and a target fund size of US$350m. If it reaches this target fund size, CapLand will have a 21% stake. The fund has identified four potential investments - in Mumbai, Chennai, Bangalore and Kolkata - worth US$330m (S$534m) for 4.1m sf GFA, slated for completion by 2008-2009.

These 3 tie-ups have shown that Capitaland has the expertise of managing and funding real estate development and is true to Capitaland's vision of moving away from a traditional property developer into a real estate funding and management company.

C&O Pharmaceuticals launch proprietary gastro-intestinal drug

C & O Pharmaceutical Technology has launched a new C&O branded gastro-intestinal drug, Domperidone Maleate tablets under the brand 'Youmalin' in China.

According to C&O, Domperidone Maleate is used in the treatment of gastric indigestion to improve gastric mobility. The drug helps to relieve symptoms such as bloating, abdominal pain, belch and flatulence caused by delayed gastric emptying, gastroesophageal reflux disease (GERD) and esophagitis; pyrosis and oral burning sensation caused by GERD, chronic and subacute gastritis caused by gastroesophageal mobility disorder; and diabetic gastroparesis and general nausea and vomiting. It was estimated that the market for Domperidone would exceed RMB 400 million.

The company further states that Domperidone has already been sold in many developed countries, but Domperidone Maleate had not been available in Mainland China until the launch of Youmalin. Moving forward, C&O is expected to launch a series of new drugs in China and according to stockbroking firm CIMB-GK, these series of launches have been factored into their target price of S$0.70.

COSCO gains new contract; 2 from SembCorp Marine

COSCO Corporation announced that its 51%-owned subsidiary, COSCO Shipyard Group had successfully secured contracts for the lower pontoons of two units of semi-submersible rigs, single to double-hull conversions and four specialized conversions. All these contracts add uo to a total of US$92.4m into COSCO's order books. The deal also includes a $31 million contract that was given by one of the world's largest builder of rigs, SembCorp Marine. The completion date of these projects ranges from Jun 06 to Apr 07.

In the back of falling freight rates, COSCO have still managed to improve profits and earnings by moving into shipbuilding and repair. In addition some of its shipyards in China have also gained small rig-building contracts. With oil reaching US$70 per barrel yesterday, COSCO's move into rig-building and competing with the likes of SembCorp Marine and Keppel Corp will increase earnings. In addition, the heavy volume experienced by the latter two heavyweights have also resulted in some spillover into lower end companies like COSCO and Labroy Marine, both of which are listed in SGX.

Hongguo is in expansion mode

Hongguo International, a manufacturer of ladies shoes in China has made plans to expand its production facility in both the Nanjing and Dongguan facility. The Nanjing plant will see its production line increase by 1 from 3 and the Dongguan plant by 2 from 3 lines and the expansion is expected to be complete by end of June 2007. The total cost will be around RMB18 million Yuan and will increase the production output by 50% increasing the shoes manufactured from 2.52 million to 3.90 million pairs.

In addition to this expansion plans, the company has signed a Memorandum of Understanding (MOU) with San-Diego based KIA Group Inc., (KIA) – a designer and manufacturer of fashion footwear in the US. Under the MOU, Hongguo will receive exclusive distribution rights for Naughty Monkey footwear for next five years in China. In the first two years, Hongguo will sell the Naughty Monkey footwear through its in-house E.Blan footwear stores, which number 108 as at end 2005. From the third year onwards, the company plans to start Naughty Monkey branded stores and it plans to have as much as 210 such individual shops for the new brand, as well as sales of one million pairs of Naughty Monkey shoes. The 'Naughty Monkey' brand is currently targeted at young, urban females between 18 to 35 years of age and fits in well with Hongguo's other brands. Hongguo's share of distribution revenue will also improve as a result of this.

China's economy and China stocks

Over the weekend, the Chinese government released official data on the country's economic growth for the 1st quarter of 2006. GDP growth stands at 10.2% which was higher than the 9.2% figure for the year 2005. Domestic demand could be behind the economic expansion for the 1st quarter of 2006 as celebrations abound during the festive Lunar New Year. This has shown that China's economy is well on track for growth and that could be the main reason behind the rally of China's stock for the last week. Expect China-based counters to continue in the limelight for the week or next.

Meanwhile, analysts are looking at two Chinese companies - Landwind Medical and China Hongxing. CIMB has a price target of S$0.80 for Landwind and S$1.65 for China Hongxing, based on their expansion in China. OCBC has a price target of S$0.70 for Landwind Medical.

OCBC pares down stake in Robinsons

Singapore's smallest bank, OCBC and insurer Great Eastern will sell off majority of their 29.9% stake in listed retailer Robinsons to Auric Pacific, a company linked to Indonesian tycoon Mochtar Riady. The stake, which is sold off at a price of S$7.90 per share will reap OCBC and Great Eastern a total of S$203 million. Moreover OCBC and Great Eastern seems to have a good deal from this stake sale as the purchase price represents a 15% premium over last traded price of S$6.75.

OCBC expects to realize a consolidated net gain of S$98 million from the sale, which should be completed in the second quarter of 2006.The combined stake of OCBC and its subsidiaries in Robinson will fall to 6.1% from 35.96% as a result of the sale. The stake sale have been speculated since last year as banks have to pare down stakes in non-financial institutions to meet government set regulations.

Fraser & Neave to benefit from China ventures

China Dairy have teamed up with F&N Dairy Investments to establish a 45:55 joint venture to build a premium milk powder production facility in China. The JV company will promote one of F&N's premium brands that will be complementary to China Dairy's local brands. Total development costs will come down to RMB92.1 million and the new plant is expected to churn out 12,000 tonnes of milk powder per annum.

This new venture located in Xi'an City will boost F&N's presence in China. Moreover consumers in China are expected to go for well established milk powder brands on cases of food poisoning from inferior grades of milk powder. This JV will boost China Dairy's profile as well as F&N's entry into the fast growing China beverage market. Other F&N's venture in China includes Tiger Beer's breweries in China, the partnership with Vinamilk and publishing & media company Fung Choi. Investment bank Merrill Lynch today increased the price target of F&N to S$21.90 per share based on 13.9x FY2006 earnings.

SPH results in line with expectations

Singapore Press Holdings announces that its net profit for the 1st half of 2006 was S$183 million which is in line with expectations. This lower earning can be attributed to a decreasing investment income and higher newsprint expenses. As operational costs increases, Singapore Press Holdings should still benefit from better advertising revenues. It was reported that the advertising industry was one of the fastest growing one in Asia. This indicates the increasing use of advertisement as a media for communications. Furthermore a booming economy in Asia Pacific could likely pull up the retail and mass consumer industry. This would benefit SPH greatly.

In addition to its earnings results, SPH also announces an interim dividend of S$0.07 per share and total dividends for the year is expected to be around S$0.28 per share which would mean a yield of around 6.4% for FY06. This would represent a relatively good DPS yield.

Ho Bee issues new shares at S$0.905 each

The largest property developer in Sentosa Island - Ho Bee Investment have issued a new round of share placement at S$0.905 each, totalling 120 million new shares. Ho Bee Investement stands to gain up to S$107.2 million after settlement of placement expenses and the company intends to use these fresh funds to settle outstanding bank loans and for future property developments. Considering that Ho Bee has several new land parcels for developments, this move is likely to provide fresh funds without the need for bank loans. This would increase the gross margin for property developments as the company is not encumbered by higher interest rates.

The issue price of S$0.905 represents a discount of approximately 6.5% to the volume weighted average price (VWAP) of S$0.9679. Thus Ho Bee shares are likely to receive a sell-down in the market for the short term mainly due to EPS dilution and a lower share placement offering.

Keppel Land distributes K-REIT to shareholders

As expected by investors of Keppel Land, the company have obtained approval from its stakeholders to distribute in specie the shares of K-Reit. K-Reit Asia was set up by Keppel Land consisting of 4 prime office towers in Singapore. They are Prudential Towers, Keppel Tower, GE Tower and the Bugis Junction office towers. Investors in Keppel Land stand to obtain one K-Reit share for every 5 Keppel Land share held. After this distribution, Keppel Land is still expected to hold up to 40% of K-Reit. K-Reit is expected to start listing on the Mainboard of SGX on 28th April 2006.

Ever since the announcement for this plan, Keppel Land's share price have run up considerably. Prices of Keppel Land have exceeded analysts recommended target prices. In addition, its bid partner Harrah's has been regarded as a relatively weaker partner compared to other bidders. However, Keppel Land has the potential for merger with the larger government linked Capitaland. This could be expected as Temasek Holdings which hold direct and indirect stakes in these 2 companies will continue to divest more stakes in Singapore and move into Asia.

Olam's shares are down after share placement

Olam, one of the largest commodities trading and supply chain company in Asia saw heavy trading of its shares in Singapore's bourse today after major shareholder AIF Singapore Investments Limited and Dragon Orient Holdings Limited placed out their stakes in the company. After the placement, AIF's stake in the company is reduced to 7.67% from 8.33% and Dragon Orient will no longer hold any stake in Olam. This is the second time a substantial shareholder has pared down a stake in the firm. In March, Singapore's Temasek Holdings sold off its stake in Olam and this latest share sale caused Olam's share price to drop by 6 cents to end the trading day at S$1.65.

However, AIF have clarified that they will not proceed to sell anymore of Olam's shares within the next 90 days. Moreover this share sale seems to be a small stake sale and it should still imply that institutional investors still see further upside in this company.

SembCorp Marine wins US$165.5 million contract

SembCorp Marine yesterday announced the winning of a new jack-up rig order from local firm JackInvest Pte. Ltd. worth up to US$165.5 million. SembCorp Marine's Jurong Shipyard will construct the rig with effect from May 2006 and delivery of the rig is scheduled before end of 2008. This latest contract brings SembCorp Marine's total order book since the start of 2006 to S$1.6 billion. And in its order books are a total of 14 jack-up rigs and 4 semis which have resulted in a full schedule and its shipyards running at near to full capacity. An industrial accident which led to 3 deaths in SembCorp Marine's shipyards have highlighted this. Smaller shipyards in China and Singapore have also started to join in the fray for rig orders. All these will force margins down considerably.

However, one bright point to note is that prices of new orders have increased as well and this should help ease any increase in operating costs. Expect larger marine companies like SembCorp Marine and Keppel Corp to continue the lead in this market as they should be able to contain costs more efficiently than the smaller new entrants in this market.

Singapore Exchange expected to announce a set of sterling results

Singapore Exchange, which operates the Mainboard listing of companies in Singapore is expected to announce a set of good 1Q2006 results tomorrow on the back of high volumes. Furthermore, the success of its derivatives trading has led to higher revenues. Singapore Exchange recently denied speculations that it will merge with US-based Nasdaq. However, fresh rumours are up again on talks that Australia-based Macquarie Bank will snap up stakes in Singapore Exchange as it looks forward to build a portfolio of stakes in Asia-Pacific bourses.

A stake purchase by Macquarie in SGX will help support long term prices. However, recent prices of Singapore Exchange has reached a new high and short term upside to this stock seems unlikely. Analysts covering the stock have placed target price to be between S$4.15 to $4.30 while the company's share price has breached this mark.

LMA drops after Credit Suisse downgrades the stock

Credit Suisse is downgrading the EPS forecast of medical device manufacturer LMA International by 11% for the year 2006. The downgrade is due to LMA's investment in developing a 'rest-of-the-world' distribution network which would hurt earnings in the short term as costs increases and revenues are 'disrupted'. Credit Suisse, however believes that long term prospects would be brighter and that 'higher growth rates' can be expected upon this expansion.

The downgrade from 'Overweight' to 'Neutral' resulted in the drop of shares of LMA to fall by 2.8% to end the day at S$0.865. Upon market opening today, the shares of LMA has continued to drop to last trade done at S$0.845. However with long term prospects of the company to remain intact as a result of its product differentiation strategy and its win of a lawsuit against industry giant Tyco, investors could look to buy into the company at around S$0.82-0.83.

Creative falls after announcement of loss

Creative Technology Ltd., one of the largest manufacturers of MP3 players in the world announced yesterday that it is projecting an operating loss of approximately $55 million to $65 million on revenues of approximately $220 million to $230 million for the third quarter of its 2006 fiscal year, ended March 31, 2006. These poor set of results would add onto the previously announced non-cash impairment charge of $25 million and the restructuring charge of $9 million associated with the refocus of the Company's graphics business in the period. The company attributes the loss primarily to a drop in flash memory prices. As a result of the reduction in memory prices, there was a negative impact on sales in March and this have resulted in lower revenues and gross margins and inventory write-downs in the period.

Going forward, the company is not expected to make any profit for this fiscal year and FY2006 results could end with an overall net loss. This announcement have resulted in a fall of its share price by 9% to close at S$11.00 for 6th of April. Further drops could be seen as the support for the company seems to be weakening with increased sales competition in the MP3 business by Sony and Samsung.

Landwind is on the road to success

Landwind's business is growing and that has been the main reason behind its share price appreciation. The announcement of several good news have also helped to lift the company's valuations. Up till now however, few analysts are covering the stock and OCBC , one of the few who is covering the stock has set a price target of S$0.70. The company has announced that its proprietary ultrasound imaging product, the NeuCrystal C30 has gained CE Mark and this will mark its first foray into the European and International markets. In addition the company has also gained several new clients for its medical distribution business. However its shift into building its own range of products shows its commitment to increase profits as the company's FY2005 results shows that net profit growth is slightly below the growth in earnings and the company has attributed it to increase in distribution costs.

According to OCBC, out of 18,000 hospitals in China, one third are Landwind's clients. As China places more emphasis on healthcare, Landwind is expected to gain as its order books have risen considerably since 2004. The company is trading at between 12 to 13 times P/E according to FY2005 EPS and medical device companies in Singapore like LMA and Sunray are trading at a similar price band.

China Paper experiences sell-down after major shareholder unloads shares

China Paper was heavily sold down this morning after news was released that the largest shareholder, Sky Media was selling its shares in the company. Sky Media, which is controlled by China Paper's Chairman Mr. Chen Yong and MD Mr. Li Hanpu sold a total of 50 million shares yesterday which represents 12.5% of the company's issued capital. In addition, Mr Chen's wife sold about 13 million shares held by her. This sale is the second share offloading by Sky Media since the 20th March. It has also signalled the run up of the share price of the company. However, with the company expected to give its dividends this year, the share sale should probably represent a high price that the directors are willing to take. Based on the 2004 Annual Report, Sky Media should be left with around 25-28% of the company's share.

Kim Eng Securities issued a 'Sell' call as opposed to its 'Buy' call when the share was priced at S$0.37. The company's good fundamentals should be a good buy at prices below S$0.40 as it has a low P/E ratio as well as a good dividend yield.

Genting's Integrated Resort bid at Marina Bay

Daytime impression of Genting's Casino Resort.


Nighttime impression.

Genting International's bid for the Marina Bay casino site have included 2 mnificent skyscraper built to look like the turning torso in Sweden that was built by reknowned Spanish architectural firm. On top of that, Genting today divulged further information about its IR bid and it would include a all mechanical, solar-adjusted clock to last 10,000 years that would be installed with a US-based firm. The exterior design would be judged by a Singapore committee of architects, designers and officials. The Genting IR is also supposed to include 4 hotels, with one 6 star hotel, one 5 star hotel and 2 four-star hotels aimed at the convention and resort business respectively.

FerroChina states earnings could rise by as much as 30%

FerroChina, one of Asia's largest makers of heavy galvanised steel coils, forecasts that its earnings will rise by as much as 30 percent this year due to its purchase of Changshu Everbright Material Technology Co. Ltd. This purchase is earnings accretive with effect of FY2006. The company has reported a 35% increase in net profit to RMB146 million for FY2005 and analyst estimates the company could see profits rise up to 48% this year.

In addition the FerroChina, whose products are used in China's auto and construction industry, has said it will aggressively expand production capacity over the next couple of years to drive earnings growth. However, the stance by the Chinese government to curb growth could potentially limit revenues and earnings for FerroChina.

Midas enters into joint venture in China to manufacture metro trains

Midas Holdings announced yesterday that it has entered into a joint venture with 4 China-based companies to develop, manufacture and sell metro trains. The JV company will be named as Nanjing Puzhen Rail Transport Co. and Midas Holdings is expected to hold a 32.5% interest in the company by investing up to RMB148.7 million out of a total investment of RMB407.6 million.

Midas business in manufacturing aluminium and plastic parts for train carriages have been certified by Alstom, and this has boosted its capability. In the 2004 Annual Report, the company have even started to venture into European markets. With the increasing urbanization in China, its move into this venture will help the company to continuously grow its business and keep a steady stream of orders. The major downside is that Midas main business relies on aluminium alloys and the price of such alloys has increased considerably since 2004. Thus should Midas manage to diversify its earnings, and manage costs increase well enough, the company's share price should appreciate. This is also from the fact that the company gave out hefty dividends last year on top of a stock split in mid 2004.

Lippo continues its push into residential property in Singapore

Indonesia conglomerate Lippo, which controls the country's largest retailer Matahari, has been snapping properties around the region and has emerged as the highest bidder for a plot of freehold land opposite Great World City along Kim Seng Road. This plot of land which is in close proximity to Orchard Road was put on sale by OCBC Bank and Lippo outbid other property developers with an estimated bid of between S$300-330 million which should work out to a breakeven cost of around S$1090-1100 psf. Lippo would be able to build up to two 29 storey residential blocks and no development charge would be necessary. Listed property developer Wheelock is building 'The Cosmopolitan' beside the plot of land and has been selling the units at a cost of between S$1400-1600 psf. This deal however is a win-win for both sides as Lippo has been trying to expand in Singapore with its acquisition of an office tower from MCL last year and OCBC is also expected to net a high profit gain as the plot of land is estimated to hold a book value of around S$50-60 million.

YHI to manufacture alloy wheels for Enkei

YHI International today announces the addition of Enkei Corporation as one of its clients and partners. Since 1975, YHI has been a distributor of Enkei's alloy wheels in Singapore. Starting from July 2006, YHI will officially start to manufacture "ENKEI TUNING" brand of alloy wheels through its manufacturing plants in Shanghai, Suzhou, Taiwan and Malaysia. This manufacturing agreement will secure for YHI at least an 8% utilization rate amongst its 12 manufacturing lines and the deal comes after YHI's announcement of its investment in Italy-based OZ Racing.

This latest announcement is also testament of YHI's status as a world-class manufacturer of alloy wheels and with its extensive distribution business across Asia-Pacific, the company looks set to grow with this latest deal. Moreover, by securing deals and partnerships with well-known alloy wheel manufacturers, YHI will form a stable network of clients and gain their distribution rights. Vested in this counter and most likely would continue to hold this stock for as long as possible for the company's vision and capable management.

Hyflux loses Middle East but gains Europe

Water treatment company Hyflux announces its first foray into Europe by acquiring 51% of CEPAration B.V. of Netherlands (CEPA) for 1.5 million Euro (S$2.94 million). CEPA, set up in 2001, is a spin-off from a leading Dutch technology institute, Netherlands Organisation for Applied Scientific Research. The company's main operation is in the development, research and distribution of ceramic membranes used in liquid & gas separation. CEPA is also known to be one of the few ceramic membrane manufacturers in the world. From this deal, Hyflux is expected to gain the following:
1) Access to CEPA's modern technologies, and the ability to manufacture ceramic hollow fibre membranes worldwide.
2) Distribution of these ceramic membranes outside Europe.
3) Ability to extend Hyflux's product offerings into Europe.

Hyflux will continue to pay royalty based on annual net sales of ceramic membranes of CEPA, on top of an initial royalty fee. However, the tie-up will bring Hyflux further up the value chain and allows it to maintain a lead over other water treatment companies. This will also increase Hyflux's capabilities which will be beneficial for the long run. Furthermore, from recent news regarding the company, Hyflux seems to be moving towards the distribution and sales of membranes outside of Asia rather than taking up the engineering and building work as it leaves the UAE project. This could be attributed to the inability to control projects overseas, or due to its heavy book orders within Asia.