DBS Vickers downgrades Tat Hong (T03.SG) to Hold from Buy, lowers target to $1.08 from $1.11; says 2Q’s 32% on-quarter drop in net profit to $7.1 million below expectations of over $10 million, “mainly due to a one-off $2.5 million goodwill impairment for Kingston and higher forex loss of $1.5 million”.

DBS Vickers notes excluding these items, bottomline would have been around $11 million. Says crane business gradually recovering, based on industry checks, tender of construction projects picking up but at slower pace than thought.

Broking house adds competition remains stiff, capping upside to rental rates, crane prices. Cuts FY11/12 earnings forecasts by 14%/4%; revision reflects weaker 2Q, slower sequential improvement.  Says stock has performed well, +16% since house upgrade late May, “however, with the slower than expected sequential improvement in the next few months, a near-term catalyst is lacking.” Shares down 2.0% at $1.00.