Company Name: UMW HOLDINGS BHD
|Research House: MAYBANK||Price Call: HOLD||Target Price: 6.10|
WSP continues to hurt. WSP, a 23% China-based associate of UMW, continues to be loss making for the last 9 consecutive quarters with net loss of USD17m in 3Q11 and USD50m for 9M11. Against this backdrop, we have trimmed UMW's 2011-12 earnings by 1-3% with a higher net loss assumption at WSP (see Table 1). Coupled with headwinds at the auto division, there are minimal catalysts to re-rate UMW, which is a Hold with an unchanged RM6.10 target price, pegged at 11x 2012 EPS.
Maybank research (23 December 2011)
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