DBS Vickers starts Yongnam Holdings (Y02.SG) at Buy with $0.45 target price, pegged at 10x FY11 earnings, says Dow Jones.

DBS Vickers says despite construction group’s stronger-than-expected 1H10 results, stock continues to lag peers in terms of valuations.

“However, given the strong fundamentals — its market dominance in the steel strutting space in Singapore and record order books of $460 million — we believe the stock is poised to play catch up,” says the broker.

Tips 23% EPS growth in FY10, 12% in FY11. Expects Yongnam to benefit from increased government spending on infrastructure projects in Singapore, given its track record of involvement in projects like ION Orchard mall, Marina Bay Sands, Circle Line and Downtown Line rail networks. Shares +14.8% at $0.310.