Analyst Research Report Snapshot

Title:

Company Update – UMW (REDUCE, downgrade) - Time to take profit on this super performer

Price:

$46.00

Provider:

Affin Investment Bank

Date:

19 Mar 2013

Pages:

5

Type:

AcrobatPDF

Companies referenced:

UMWS.KL

Available for Immediate Download
Summary:

Investment thesis The stock has outperformed the KLCI by 67% in 2012. The strong share price trajectory was driven by: (1) record 2012 Toyota sales of 105K units, (2) an improvement in the Group’s FY12 O&G and equipment earnings; and (3) potential listing of the O&G division in 2013. These catalysts helped to propel share price further this year, with the stock outperforming the broader market by 16% YTD. Trading at 14.3x CY13 EPS (above its 5-year historical average PER of 12x), we opine the stock is now fully valued as the risk-reward is less compelling given: (1) potential earnings headwind as the automotive sector faces intense competition; and (2) the listing of the O&G division is seen to be priced in - at an estimated market capitalisation of RM1.5bn. Since the beginning of the year, the improving domestic O&G prospects saw investors adding RM1.5bn to UMW’s market capitalisation of RM15.5bn. All in, we opine that our street-centric earnings is already embedded with a positive analyst bias and as such, there may be limited scope for potential earnings surprises in FY13.

Why buy analyst research?

  • Institutional quality research
  • Available for Immediate Download
  • Detailed company or industry insight
  • Print or save
  • 24 hour customer support
Return to previous page without adding this item to your cart.
Email Customer Support.

About Analyst Research

Analyst research reports are available for immediate download after purchase. You will have unlimited access to the report for 24 hours after purchase, to download, print or save it as many times as you wish. Analyst Research provided by Reuters does not constitute investment advice, and is not endorsed by Reuters Research. This information is protected by copyright and intellectual property laws. More information on Analyst Research.