Tuesday, 24 April 2012

UMW advances following upgrade

KUALA LUMPUR (April 24): UMW HOLDINGS BHD [] shares advanced on Tuesday after Maybank Investment Bank Bhd Research upgraded the stock to a Buy from Hold and raised its target price to RM8.35 (from RM6.95).

At 4pm, UMW rose 16 sen to RM7.70 with 4.49 million shared done.

Maybank IB Research in a note on Monday said it had upgraded UMW, ahead of recoveries at the automotive and O&G sectors, and on the back of a 10-11% rise in 2012-13 net profit forecasts.

“The disruption to the regional auto supply chain has abated while its O&G segment is at the cusp of a revival.

“ With market already absorbing the anticipated weak 1Q12 earnings and its 2011 kitchen-sinking exercise, UMW now offers a recovery play angle with modest growth (3-year EPS CAGR of 20%) and undemanding valuations, supported by a decent dividend yield (6%),” it said.

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