DBS Vickers upgrades Pacific Andes Resources (P11.SG) to Buy from Hold and raises its target price to $0.48 from $0.37 on news its subsidiary China Fishery (B0Z.SG) is seeking a dual-listing in Hong Kong by offering up to 200 million new shares.

“With the potential funds raised of (about) U$350 million, we believe CFG could be aggressively looking for acquisition of more quotas/fishing companies.”

DBS says it’s not factored in the potential dilution nor earnings accretion from the deployment of funds, but a successful dual-listing of CFG “would highlight the market value of PAH’s (about) 56% effective holding in CFH.

Currently, the market value of PAH’s stake in CFG is (about) $1.27 billion, which is a 30% premium to its own market cap.” The house’s new target is pegged to 9x FY11F P/E, a 30% discount to CFG’s target P/E and a 20% discount to peers’ average. Pacific Andes shares are +2.9% at $0.355.