KUALA LUMPUR (Oct 27): Seremban Engineering Bhd (SEB)'s share price rallied as much as 17 sen or 36.96% in the first half of the trading day to 63 sen, following the news that the effects of its Sabah project's cost overrun issue should be diluted by next year.

The engineering firm, which was 65%-owned by another listed company Success Transformer Corp Bhd, settled at 59 sen as at market break, still up 13 sen or 28.26%, after some 9.95 million shares were traded.

At 59 sen, SEB was valued at RM47.41 million.

Last Saturday, local media reported, quoting Success Transformer general manager (finance) Wong Wai Hung, that SEB's Sabah Ammonia Urea or Samur project's cost overrun issue is about to be diluted by next year.

Wong was quoted as saying that since Success Transformer bought over SEB back in 2006, the latter had been contributing an average of 20% to 30% to Success Transformer's total group profits until last year, when the cost overruns and higher finance costs negatively affected SEB's earnings.

Success Transformer, whose share price hit a record high on Oct 23 at RM2.07, saw its stock fall four sen or 1.99% from yesterday's close to RM1.97 as at 12.29pm today after some 1.27 million shares were done.

Its latest price gives it a market capitalisation of RM227.08 million.

(Note: The Edge Research's fundamental score reflects a company's profitability and balance sheet strength, calculated based on historical numbers. The valuation score determines if a stock is attractively valued or not, also based on historical numbers. A score of 3 suggests strong fundamentals and attractive valuations.)