Share placement Epure has just announced a share placement. The details are as follows: �� 30m new shares; �� 20m vendor shares from Green Capital, an investment vehicle of the fatherin- law and mother-in-law of Mr Wen Yibo, the non executive chairman and major shareholder of Epure; and. �� 1.4m vendor shares from IFC The indicative price range is S$2.16-S$2.20, representing 8-10% discount to the last traded price of S$2.39 before the trading halt. The net proceeds of approximately S$63m will be used to acquire similar and synergistic business. The company is currently considering the possibility of acquiring environmental equipment companies and construction project management companies focusing on environmental projects. We believe that the company has already identified the target and with the new funds from the placement, Epure should be able to announce its M&A plan within 3-4 months. We like environmental plays given the continued investors’ interest in the sector. The world and China are increasingly concerned about environmental issues such as pollution and global warming. Water treatment companies are trading at higher valuation and the market is quite receptive about putting money into these stocks. For instance, Asia Environment’s share price has done very well despite having two placements in the last three months. We like Epure for its strong fundamentals, well run operation and transparent management. While there is a 7.5% earnings dilution from the issue of new shares, we believe that Epure is able to make an earning accretive acquisition. Therefore, we may need to raise our forecast and target price when the M&A news is out. We will review our forecast after the 1H07 results announcement when we have more updated information about the order books and corporate development.