Phillip Securities starts Rotary Engineering (R07.SG) at Buy with $1.35 target price, based on 12.5x P/E, 2.5x P/B, says Dow Jones.

Phillip Securities says plant builder’s $1.1 billion contract in Saudi Arabia secured last year will offer strong foothold for subsequent ventures in Middle East, provide diversification from core Southeast Asian market.

Broker notes Rotary has 6 ongoing projects which could contribute $255 million to revenue for rest of FY10, another $375 million for FY11; “there is good visibility of the future revenue of the company till 2012.”

Says current debt level low while cash position strong at $150 million. Shares +2.7% at $0.965.