Musing over OSK commentary on KNM

I was just reading OSK commentary on KNM.

• Within our forecasts. Although this contract can be viewed as a breakthrough for KNM as it expands its business in the minerals industry, it falls well within our expectations. Management had guided that the minerals sector would increase revenue contribution from 10% in 2007 to 12% in 2008. As such, we make no changes to our estimates. Our FY07 net profit is 12.2% above guidance while FY08’s is 24.8% above guidance partly due to our inclusion of Pisces Engineering numbers.
  
  Still amongst the cheapest O&G companies. With KNM’s upside to our fundamental fair value of RM5.20 pared down, we downgrade KNM to a Trading Buy. Our Trading target fair value (21x PER on CY08 numbers) is RM6.80, providing some 42% upside. KNM remains one of the cheapest O&G companies with a proven track record and our top pick amongst the bigger cap Malaysian O&G peers.

See what is so confusing is that their 'fundie' value for the stock is stated at rm5.20 for KNM but they have placed a trading value of rm6.80 on the stock!

I guess they are saying that the stock should trade higher than their fundie value.

Am I translating it correct here?

Hmm...