CIMB upgrades Cosco (F83.SG) to Neutral from Underperform, lifts target price to $2.01 from $1.41 after changing valuation basis to 15x FY12 P/E from sum-of-parts methodology, says Dow Jones.

CIMB says execution, default risks for shipbuilding sector have eased with steady vessel deliveries, absence of contract cancellations or deferrals since 1Q10.

Research house notes Cosco has delivered 24 vessels year to date with average of 8 units each quarter: "We think this trend is sustainable in 2011." But remains cautious on Cosco's foray into offshore & marine segment; "its execution of turnkey projects remains untested."

Shares off 0.5% at $1.86.