Shares of Singapore-listed Chinese water treatment firm Sound Global (SOGL.SI) rose as much as 10 percent as investors bought the stock ahead of the start of its dual listing in Hong Kong on Thursday.

At 0221 GMT, shares of Sound Global were trading at $0.885 with a volume of around 20.4 million shares.

 

“Investors see it as a positive move because of the higher earnings multiple,” said a local trader, referring to the tendency for smaller Chinese firms to command higher valuations once they start trading in either Hong Kong or Taiwan.

 

DBS Vickers upgraded its rating on the firm to “buy” from “hold” and raised its target price to $0.96 from $0.84.

 

The brokerage said it has raised its earnings estimates for Sound Global's 2011 financial year by 15.9%, adding that the firm's 2.4 billion yuan ($472.8 million) order book covers 66% of its FY2011 sales.

 

DBS also said that Sound Global has limited downside due to a potential contract worth 1.38 billion yuan ($271.9 million) and its convertible bond issue that raised 885 million yuan.