Stock Name: UMW
Company Name: UMW HOLDINGS BHD
UMW Holdings Bhd's oil and gas (OandG) division is expected to report stronger earnings in 2013, said Hong Leong Investment Bank Research (HLIB Research).
In a note today, HLIB Research said UMW is in the midst of restructuring its OandG division and potentially listing it in 2013.
It said UMW Petrodil (Malaysia) Sdn Bhd was yesterday awarded a US$140 million (RM432 million)contract to supply a single combo top tension riser for Sabah Shell Petroleum Company Ltd's Malikai project. UMW Petrodil is a wholly-owned subsidiary of the UMW Group.
HLIB Research said the contract is expected to contribute positively to the 2013 earnings and net assets of the group.
"We expect the award to contribute marginally to UMW's earnings from 2013 onward, as we understand the project's profit margin is only 2-3 per cent (RM10 million).
"It is expected to expand over a two to three year timeframe," it
added.
HLIB Research also maintained a "hold" call on UMW with a higher target price of RM12.28 (from RM10.60), after rolling-forward its valuation into financial year 2014, and ascribing a 12 times price earnings to the automotive and OandG divisions. -- Bernama
Company Name: UMW HOLDINGS BHD
| Research House: HLG | Price Call: HOLD | Target Price: 12.28 |
UMW Holdings Bhd's oil and gas (OandG) division is expected to report stronger earnings in 2013, said Hong Leong Investment Bank Research (HLIB Research).
In a note today, HLIB Research said UMW is in the midst of restructuring its OandG division and potentially listing it in 2013.
It said UMW Petrodil (Malaysia) Sdn Bhd was yesterday awarded a US$140 million (RM432 million)contract to supply a single combo top tension riser for Sabah Shell Petroleum Company Ltd's Malikai project. UMW Petrodil is a wholly-owned subsidiary of the UMW Group.
HLIB Research said the contract is expected to contribute positively to the 2013 earnings and net assets of the group.
"We expect the award to contribute marginally to UMW's earnings from 2013 onward, as we understand the project's profit margin is only 2-3 per cent (RM10 million).
"It is expected to expand over a two to three year timeframe," it
added.
HLIB Research also maintained a "hold" call on UMW with a higher target price of RM12.28 (from RM10.60), after rolling-forward its valuation into financial year 2014, and ascribing a 12 times price earnings to the automotive and OandG divisions. -- Bernama
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