An unexpected hard landing - from VickersInter-Roller Engineering An unexpected hard landing Fully Valued (Downgrade) S$1.13; Price Target : 12-Month S$ 1.00 (Prev S$ 1.15) Story: IRL reported 1H07 results that were below expectations. Excluding net gains (DBSV estimate) on sale of investment property S$10.6m, net earnings at half-time declined by 31% y-o-y to S$9.2m on a flat topline of c. S$77m. A S1ct dividend was declared for the quarter. Point: While the Group is confident of securing more orders in the second half of 2007, a delay in the award of tenders would affect the Group’s turnover in the 2nd half of the year with most of these orders being carried out in 2008. To reflect lower order wins and higher costs, we have cut our core earnings estimates for FY07 and FY08 by 24% and 13% respectively. Relevance: The stock has risen by over 25% since February and is currently trading at c.14x FY08 earnings. With our target price now at S$1, based on 12x FY08 earnings, following our lowered earnings esti