UMW upgraded to BUY with TP of RM8.35 at Maybank

Quoted from Maybank report:

1. Upgrade to Buy with a higher TP of MYR8.35, ahead of recoveries at
the automotive and O&G sectors, and on the back of a 10-11% rise in
2012-13 net profit forecasts. The disruption to the regional auto supply chain has abated while its O&G segment is at the cusp of a revival.

2. With market already absorbing the anticipated weak 1Q12 earnings
and its 2011 kitchen-sinking exercise, UMW now offers a recovery play
angle with modest growth (3-year EPS CAGR of 20%) and
undemanding valuations, supported by a decent dividend yield (6%).

3. We have raised our forecasts for Toyota vehicle
sales by 2-9% in 2012-13 to reflect an improved sales order outlook,
fuelled by its interesting launches ahead.

4. Net earnings lifted by 10-11% in 2012-13, incorporating the higher
profits from auto (+5-11%) and O&G (loss in 2011) divisions. We now
expect UMW to register a higher net profit of MYR723m in 2012 and
MYR812m in 2013.