Wednesday, 25 April 2012

UMW extends gains after Maybank IB Research upgrade

KUALA LUMPUR (April 25): UMW HOLDINGS BHD [] extended its gains on Wednesday after Maybank Investment Bank Bhd Research had upgraded the stock to a Buy from Hold on Monday and raised its target price to RM8.35 (from RM6.95).

At 9.38am, UMW rose 17 sen to RM7.82 with 80,600 shares 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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