AmResearch Upgrades Wah Seong To Hold From Sell

    AmResearch upgrades Wah Seong Corp. Bhd (5142.KU) to Hold from Sell, and raises its price target to MYR2.45, pegging the stock to a higher FY11 forecast P/E of 17X vs 14X earlier. The house also raises its FY11-FY13 net profit forecasts by 6%-9% largely due to a 2 percentage point increase in its pipe-coating EBIT margin assumption. But the house adds, the time-line for new order replenishment to the company's net order book of MYR1.4 billion currently remains unclear given that a large proportion of its MYR5 billion tenders are derived from overseas. It also says, the stock currently trades at a CY11 forecast diluted P/E of 15X, at a slight premium to Malaysia's oil and gas sector. Wah Seong is up 1.4% at MYR2.17.