UMW (BUY) - O&G and Equipment Division to Lead in FY12

Stock Name: UMW
Company Name: UMW HOLDINGS BHD

Research House: HLG

Price Call: BUY

Target Price: 8.25

UMW (BUY)

O&G and Equipment Division to Lead in FY12

• Above ' Reported 4Q11 core net profit of RM328.6m, leading to FY11 core profit of RM812.2m, as compare to our forecast ofRM611.1m due to better than expected margins for Automotive, Oil & Gas andEquipment divisions.
• Impairments and provisions of RM322.4m in FY11 for Oil & Gas andEquipment divisions. Management do not expect further impairments andprovisions in FY12, and hence stronger earnings for both divisions.
• Announced final net dividend of 7.5 sen. The total net dividend for FY11will be 31 sen (4.4% net dividend yield).
• Upgrade to BUY with revised Target Price of RM8.25.

Source: HLIB Research 27 Feb 2012