1

Aqua-Terra Supply Co. Limited

(Company Registration No: 200100108D)

2 Sixth Lok Yang Road

Singapore 628100

Tel: (65) 6319 4666 Fax: (65) 6268 4455

http://www.aqua-terra.com

NEWS RELEASE

AQUA-TERRA SETS UP A RIGGING AND

TESTING & CERTIFICATION FACILITY IN BATAM

SINGAPORE,

(?Aqua-Terra? or ?ATS?) today announced that it has set up a rigging and testing &

certification facility in Batam. This new facility is poised to serve the needs of the

rapidly increasing number of oil and gas and marine companies operating in Batam.

Incorporated in Indonesia, this new entity is a subsidiary of Marinehub Pte Ltd

(?Marinehub?). It will operate under the name of PT MH Global Indonesia

(?PTMHG?). Marinehub is a wholly owned subsidiary of Aqua-Terra.

PTMHG occupies an area of 86,000 square feet within the 400-hectare Kabil

Industrial Estate, which is located on the eastern seaboard of Batam Island, Indonesia.

This industrial park is owned and managed by PT Kabil Indonusa Estate. The

presence of Aqua-Terra in Batam is timely. Recent years have seen an increasing

number of shipbuilding, marine and oil and gas companies expanding their

manufacturing and fabricating operations to the island. This new facility will enable

Aqua-Terra to expand its rigging and testing & certification facility that is currently

located in Singapore, so that it can better serve its customers in Batam.

Commenting on Aqua-Terra?s move, Mr. Kris Wiluan, Chairman and CEO said, ?the

close proximity of Batam to Singapore and the recent implementation of the Special

Economic Zone have raised the attractiveness of Batam as an operation base for the

oil and gas and marine industries. Our Kabil Industrial Estate, which has an offshore

jetty capable to berth vessels of 30,000 dwt, is currently serving many international

oil and gas and marine companies, and Aqua-Terra?s presence will help us to respond

more rapidly to the needs of customers operating in Batam and Singapore.?

27th January 2008 ? Main board listed Aqua-Terra Supply Co. Limited

AQUA-TERRA SUPPLY CO. LIMITED

(Company Registration No: 200100108D)

PTMHG has an issued and paid up share capital of US$1.5 million with Marinehub

holding 99% of the equity interest and the remaining 1% equity interest held by PT

Kabil Indonusa Estate. The total investment in PTMHG will be in excess of US$3.0

million.

Funding for the abovementioned investment will be through a combination of internal

resources and bank borrowings.

The abovementioned transaction is not expected to have any material effect on the net

earnings per share and net tangible assets per share of the Company for the financial

year ended 31 December 2007 but it is expected to contribute positively to the

Group?s earnings in 2008 and beyond.

Except as disclosed above, none of the directors or substantial shareholders of the

Company have any interest, direct or indirect on the abovementioned transaction.

About Aqua-Terra Supply Co. Limited (?ATS?)

ATS is a leading integrated supply and procurement services provider serving

customers from the oil and gas and marine industries. Headquartered in Singapore,

ATS has offices in China, Hong Kong, India, Indonesia, Qatar and Vietnam

For more information, please visit our website at: www.aqua-terra.com

**********

For enquiry, please contact:

Tan Peck Hwa

Asia Business Channels Pte Ltd

Tel: 6749 8871 / 9635 4996

email: tphcomms@singnet.com.sg

Source: DBS Vickers

PLEASE SEE THE RECOMMENDATION FROM OCBC POSTED TODAY -03/12/07(MONDAY)

Aqua-Terra Supply Co.

 

True value yet to be unleashed Maintain

 

BUY

 

Previous Rating: BUY

 

S$0.45

 

Fair Value: S$0.70

 

Stock Code:

 

Reuters: AQUA.SI

 

Bloomberg: AQUA SP

 

Event: Update

 

General Data

 

Issued Capital (m) 351

 

Mkt Cap (S$m/US$m) 158 / 109

 

Major Shareholder KS Energy

 

(55%)

 

Free Float (%) 46.2

 

NTA per share (S$) 0.25

 

Daily Vol 3-mth (?000) 3,159

 

52Wk High (S$) 0.650

 

52Wk Low (S$) 0.349

 

A player in the booming oil and gas industry. The recent weakness in

 

market sentiment has resulted in Aqua-Terra Supply's (ATS) share price

 

falling by 18% from its peak in mid October. Given ATS's affirmed market

 

position and strong order book from the booming oil and gas industry, we

 

view ATS as an undervalued stockist whose true potential has yet to be

 

fully appreciated.

 

Recent wins augment ATS' market position. In Jan 07, ATS secured its

 

maiden sizeable project of S$68m from China National Offshore Oil Corp

 

(CNOOC) Oil Base Group Ltd to provide integrated procurement and

 

management services for the construction of Bunkering Oil Tankers and

 

Offshore Utility Vessels. In Sept 07, ATS clinched another S$30m contract

 

to supply pre-fabricated chord and rack and other rig components for the

 

construction of a jack-up rig. We view both wins to be an affirmation of ATS'

 

market position and capability as a one-stop shop engineering services

 

provider.

 

Expect more contract wins in 2008. Owing to robust demand from the

 

local yards, 75% of ATS' revenue comes from Singapore. With order books

 

of these yards stretching out till 2010-11, we expect ATS to continue to

 

have good earnings visibility and contract wins in the coming year. Although

 

we expect piecemeal contracts from the overseas operations to flow in

 

soon, we have not factored in ATS' long term consumables and equipment

 

supply for the rig refurbishment facility in Batam, Indonesia.

 

Maiden contributions from China in FY08. We expect topline contribution

 

of S$49m from the operations in China in 2008. We believe that these

 

projects are merely the tip of the ice-berg, and ATS should be leaving more

 

footprints in the Chinese rig market. We are optimistic of the potential

 

upside from China, and foresee revenue contributions from China growing

 

from 8% currently to 20%.

 

Reiterate BUY with fair value of S$0.70. We are projecting bottom-line

 

gain of S$11.5m (EPS of S$0.033) for FY07 and S$19.5m (S$0.056 EPS)

 

for FY08. Using 16x FY07/08F blended earnings, we derive a fair value of S$0.70 .

We reiterate BUY

OUTPERFORM rating remains.

focus their business on 1.Deepwater exploration services equipment such

as

2.Middle East play such as

gas services-related stockists such as

and

this presents a good opportunity to re-enter the market, riding on the still

strong demand growth in this sector.We remain bullish on oil & gas stocks thatKeppel Corporation [BUY; S$17.10] and Ezra Holdings [BUY; S$4.02].Rotary Engineering [BUY; S$1.60]. 3.Oil &Aqua-Terra Supply [BUY; S$0.70]SSH Corporation [BUY; S$0.60]. With the recent market sell-down,

Outperform

Source: Bloomberg & OIR estimates

Last Closing Price Share Price Capital Gain Fair Potential Rating

Company Fin Year Ended (30 Nov 2007) (3 Jan 2007) to-date Value Upside

(S$) (S$) (%) (S$) (%)

                           FY END  CLOSING PRI SHARE PRI   CAPITAL GAIN      FAIR VALUE        UPSIDE POTENTIAL      RATING

                                31.11.07          03.01.07           SO FAR

Aqua Terra    Dec         0.450           0.372               20.9                         0.70                               55.6                              BUY

Ezra Hldgs     Aug        3.340           2.100                59.0                        4.02                                20.4                              BUY

Keppel Corp  Dec         13.400        9.136                46.70                       17.10                              27.6                              BUY

Rotary            Dec         1.250           0.720               73.6                        1.60                                28.0                              BUY

SSH Corp       Jun        0.365        0.275                   32.7                        0.60                                64.4                              BUY

Serene Lim

 

(65) 6531 9824

 

e-mail: serene@ocbc-research.com

 

*Reporting Currency in SGD

 

*Technical Analysis Information is updated Daily

 

Aqua Terra S falls under the oversold status..... It's the time to pick up the stock before it's too late.....