KUALA LUMPUR: CIMB Equities Research is upgrading Wah Seong Corp from Neutral to OUTPERFORM in view of the potential rerating catalysts of success in new markets and pipe coating contract awards.
It said on Thursday, April 28 that its phone conversation with management on Wednesday shed more light on Wah Seong's recently-announced JVs with US-based Insituform.
CIMB Research said this relationship could allow Wah Seong to venture into the US and set up a deepwater pipe coating plant in the Gulf of Mexico area.
It also noted that pipe coating prospects in Malaysia and Australia have improved. Wah Seong is already bidding for a Kebabangan pipe coating package.
'Imputing potential contributions from the JVs, we raise our EPS forecasts by 7.2% for FY12 and 7.1% for FY13 while keeping our FY11 numbers unchanged.
'Our target price goes up from RM2.50 to RM2.70, still pegged to our target market P/E of 14.5x,' it said.
It said on Thursday, April 28 that its phone conversation with management on Wednesday shed more light on Wah Seong's recently-announced JVs with US-based Insituform.
CIMB Research said this relationship could allow Wah Seong to venture into the US and set up a deepwater pipe coating plant in the Gulf of Mexico area.
It also noted that pipe coating prospects in Malaysia and Australia have improved. Wah Seong is already bidding for a Kebabangan pipe coating package.
'Imputing potential contributions from the JVs, we raise our EPS forecasts by 7.2% for FY12 and 7.1% for FY13 while keeping our FY11 numbers unchanged.
'Our target price goes up from RM2.50 to RM2.70, still pegged to our target market P/E of 14.5x,' it said.
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