DMG starts Mun Siong Engineering (MF6.SG) at Buy with a $0.28 target price.

Says the provider of mechanical and electrical engineering services is well placed to ride the strong growth in petrochemical industry in Singapore, where oil giants Shell and Exxon Mobil have set up new petrochemical plants.

“Domestic players with a strong track record like Mun Siong Engineering are well-positioned to tap the new wave of downstream investments coming into Singapore.”

Forecasts 25.9% net profit CAGR over FY09-11, driven by maintenance contracts from major oil companies. Says the company is now in a stronger financial position to pursue M&A opportunities after its October listing. Shares +5.6% at $0.19.