Sino-Thai Eng & Construction

Sino-Thai Eng & Construction Plc (STEC)    
Strong earnings visibility backed by sizeable backlog, less volatile margins and good cost control makes STEC more attractive than other contractors. With its strong balance sheet, it is well-positioned to benefit from the new infrastructure spending cycle. Given the limited number of infrastructure plays and with STEC’s robust earnings visibility, we believe STEC deserves to trade at a premium. We reiterate our Outperform call and target price, still based on 3.5x CY12 P/BV, two standard deviations above the historical average.