The news: Tee International (Tee) won three contracts totalling S$17.4m contracts, two of which are awarded by Citibank and the remaining by Tarkus Interiors. Tee is to perform fit-out works and M&E works at Asia Square Tower 1 for Citibank. The contracts are commencing in Jun and Jul 11 and expected to be completed by Aug 2011.
Our thoughts: With the above new contracts, Tee’s order book has been boosted up to ~S$235.3m for its engineering segment, to be fulfilled over the next two years. Milestone completions for these projects will be recognised substantially as revenue in Tee’s FY12. We see demand for construction services to remain sustained on the back of public infrastructure and private property projects being rolled out. We maintain our Overweight recommendation on the construction sector and like BBR (BUY, TP S$0.52), Kian Ann Engineering (BUY, TP S$0.31), KSH (BUY, TP S$0.31) and Lian Beng (BUY, TP S$.0.67).
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