Phillip Securities starts PEC (IX2.SG) at Buy with $1.50 target price, based on 8.75x P/E, 1.75x P/B, says Dow Jones.

Phillip Securities says Singapore-based plant builder has established working ties on Jurong Island with key industry players including Shell Eastern, Exxon Mobil, Singapore Refining Company, allowing it to secure long-term maintenance contracts, which are less volatile than project works.

Broker says PEC’s 2 key projects in Europe, Malaysia “key milestones” as they establish new phase of growth beyond its traditional business on Jurong Island. Expects strong competition in industry to keep PEC’s profit margins flat, but notes strong cash position of $160.8 million will be useful for buying new synergistic businesses to increase returns to shareholders. Shares +4.8% at $1.10.