UOB KayHian has cut Mermaid Maritime’s (DU4.SG) target price to $0.70 from $1.30 after changing valuation basis to 1.0x P/B from 11.0x FY11 P/E, says Dow Jones.

Lowers FY10-12 net profit estimates by 141%, 71%, 69% respectively to reflect loss of earnings from KM-1 rig, which oil drilling group recently sold for US$7.4 million ($10.3 million) loss.

Still, UOB KayHian is keeping its Buy call on view stock “grossly undervalued” after recent correction due to loss of income after sale.

Broker notes company considering acquiring new assets, some of which already come with charter agreements.

Shares flat at $0.485.