CIMB upgrades Technics Oil & Gas (5CQ.SG) to Buy from Hold, raises its target to $1.08 from $0.89 on 10x CY12 P/E (a 20% premium above downstream engineering firms’ 5-year average) and factoring in a 10%-13% increase in earnings estimates for FY11-FY12 on higher order-win projections.

“The premium is justified thanks to Technic’s strong exposure to Vietnam’s oil & gas sector and above peers’ profitability, earnings growth as well as dividend yield.”

It expects stock catalysts from a successful TDR listing and higher-than-expected orders. It adds, YTD orders form 40% of the house’s FY11 order-win forecast.

“Our assumptions could be overly-conservative.” It raises its order-win estimates to $150 million from $120 million for FY11 and ups DPS forecast to 7.0 cents from 6.0 cents, and 8.0 cents from 7.0 cents for FY11, FY12 respectively which result in “an attractive 8.0% dividend yield.” The stock is up 3.4% at $0.920.