Thursday, October 28, 2010

Rotary Engrg

Rotary Engrg: OCBC Sec keeps at Buy, raises target price to $1.22 from $1.16 on 10-18% upward revision to earnings forecasts after it won US$250m contract to build petroleum storage facility in Mid-East. Work expected to commence 1Q11 with completion slated for 4Q12, thereby boosting group's FY11/12 revenue. Tips 27.4% growth in FY11 earnings to $70.6m. With latest win, the group's order book now stands at $1.3b with visibility extending till 2012.

This latest order also represents one of the group's larger contracts, which will boost its presence in the Mid-East. Group's 3Q10 results expected on Nov 4. A breakout of double top resistance at $1.00 would pave the way for next target at $1.07; support at $0.965.

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