Stock Name: UMW
Company Name: UMW HOLDINGS BHD
Affin Investment Bank downgraded UMW Holdings Bhd to 'reduce' from 'add', with an unchanged fair value of RM12.40 per share, saying the automotive-to-oil and gas conglomerate is fully valued now and offers less compelling risk-reward.
"We continue to like management's drive and handle of the company, and this tactical downgrade is predominantly in reference to valuations as opposed to operational issues," the research house said in a note on Wednesday.
Affin said the risk-reward of UMW is less compelling now given potential earnings headwinds as the automotive sector faces intense competition. It said investors have priced in the listing of the oil and gas division with an estimated market capitalisation of RM1.5 billion.
"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 2013," it added.
Shares of UMW rose 85.17 per cent over the past one year, while the benchmark stock index climbed 3.18 per cent.
The counter remained unchanged at RM13.24 per share, outperforming the benchmark stock index's 0.17 per cent drop.-- Reuters
Company Name: UMW HOLDINGS BHD
| Research House: AFFIN | Price Call: SELL | Target Price: 12.40 |
Affin Investment Bank downgraded UMW Holdings Bhd to 'reduce' from 'add', with an unchanged fair value of RM12.40 per share, saying the automotive-to-oil and gas conglomerate is fully valued now and offers less compelling risk-reward.
"We continue to like management's drive and handle of the company, and this tactical downgrade is predominantly in reference to valuations as opposed to operational issues," the research house said in a note on Wednesday.
Affin said the risk-reward of UMW is less compelling now given potential earnings headwinds as the automotive sector faces intense competition. It said investors have priced in the listing of the oil and gas division with an estimated market capitalisation of RM1.5 billion.
"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 2013," it added.
Shares of UMW rose 85.17 per cent over the past one year, while the benchmark stock index climbed 3.18 per cent.
The counter remained unchanged at RM13.24 per share, outperforming the benchmark stock index's 0.17 per cent drop.-- Reuters
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