Meiban's 1Q09 net profit of S$2.9m (-18% yoy) came in 7% ahead of our expectation due to a lower-than-expected effective tax rate and better-than-expected margins arising from good cost-control. 1Q09 numbers represent 34% of consensus and our full-year forecasts. We have raised our FY09 profit forecast by 42% to factor in the better-than-expected 1Q as well as improved order flows from HP. We have also raised our FY10 forecast by 5% after lowering sales and opex assumptions. Our target price has been lifted from 30.5cts (based on 0.7x CY09 P/BV, its 10-year average low) to 41cts (0.9x P/BV, closer to its 10-year average) to factor in the gradual improvement in earnings. Maintain Outperform. We suspect there could be upside surprises to FY09 dividend payment in view of its solid cash flow.