Written by CIMB Equities Research
Wednesday, 24 February 2010 08:56
KUALA LUMPUR: CIMB Equities Research said UMW's FY09 core net profit came in 9% below its forecast and 1% shy of consensus estimate.
It said on Wednesday, Feb 24 that it was keeping its OUTPERFORM call. Factors that could lead to a re-rating include 1) the improved earnings from the auto segment, 2) rising contribution from O&G, 3) listing of the O&G division.
It said although UMW's pretax profit was just 1% short of its forecast, net profits missed its forecast largely because of high minority interests as 51%-owned UMW Toyota performed better than expected.
A final single-tier dividend of 9 sen per share was declared for the quarter, bringing total DPS to 20 sen.
"We are cutting FY10-11 earnings by 4-6% after making some housekeeping adjustments and lowering our projection for O&G largely for the delay in the commissioning of Naga 2 and lower contribution from WSP.
"Our SOP target price is reduced from RM8.10 to RM7.95, which we continue to base on target P/Es of 13.5x for its auto division, 15x for its O&G division, and 10x for its manufacturing & equipment division," it said.