Stock Buy Call: Rotary target price rise to 1.1 by Kim Eng!

Kim Eng Securities says it has started covering on Rotary Engineering Ltd with a "buy" rating and a price target of 1.10 sgd per share based on the company's growth prospects. The brokerage believes Rotary Engineering is well positioned to obtain work on the projects in the oil and gas industry here. "It is also a preferred engineer on the panel of leading refinery players like Shell and Exxon Mobil and looks set to benefit from the impending increase in downstream and oil terminal capital expenditures in Singapore and the region," Kim Eng said in a note to clients. Shell is building here a 3 bln-usd petrochemical cracker which is due to begin working by 2009 or 2010, and ExxonMobil is planning to build its second cracker here. Kim Eng expects Rotary's net profit to grow to 33.8 mln sgd this year from 9.3 mln sgd last year, to 35.5 mln sgd next year and to 40.4 mln sgd in 2008. At 11.19 am, Rotary was up 0.03 sgd or 3.92 pct at 0.795, with 6.86 mln shares traded.