PEC

PEC: credible set of FYJun10 results. Revenue +6% yoy to $467m, on greater contribution from project works and maintenance services. Net profit to sh/h surged 114% to $44.8m on improved gross margins. Total div of 4cts (2cts final + 2cts special) translates to decent 4.5% yield…

Mgt expects long term prospects to remain promising, although notes FY11 could be challenging in view of increased competition and gradually increasing raw material and labor costs. To continue actively pursuing overseas expansion, particularly in in Asia, Europe, and the Middle East, where PEC already has strong entry points'. Order book stands at $260m, not including revenue from the Rotterdam project secured by PEC’s 50/50 JV, which has value of approximately EU 118m…

Stock trades at just 5x PE. CIMB rates as Outperform with $1.22 target.