UMW (BUY) - O&G to turnaround in 2012!

Stock Name: UMW
Company Name: UMW HOLDINGS BHD

Research House: HLG

Price Call: BUY

Target Price: 8.25

UMW (BUY)

O&G to turnaround in 2012!

• UMW Oil & Gas division (O&G) has received a Letter of Amendmentand Extension from Petronas Carigali (PCSB) for a 2-year extension of theProvision of Naga 3 Jack-up Drilling Rig, worth US$105m (RM315m).
• The contract value of US$52.5m pa (US$105m/2) is higher than ourexpectations of US$41.5m pa, indicating potential higher margins (higherearnings contribution) from Naga 3 in 2012-14.
• The contract extension has reaffirmed our view on the turnaround of Oil& Gas division and lead UMW's growth in 2012.
• Maintain Buy on UMW with Target Price of RM8.25.

HLIB Research - 2 April 2012