UEM Edgenta Bhd

Market leader in healthcare support services

• Largest hospital support service player in Southeast Asia having serve over 300 hospital beds across several countries such as Malaysia, Singapore, Indonesia, Taiwan, India and United Arab Emirates. More than 30 years of experience in highway maintenance having managed and maintained over 3,100km of expressways in Malaysia and Indonesia.

• Secured a hospital support services contract valued between RM264.5m-284.0m from the Ministry of Health of Singapore back in July 2020.

• Technically, the recovery beyond RM2.13 suggests price may stage further upside towards the next resistances at RM2.30-RM2.48 with long term target at RM2.65.

Trading Catalyst

• UEM Edgenta Bhd is involved in the provision of asset consultancy services, healthcare services and infrastructure services. The group is ranked as the largest hospital support service player in Southeast Asia having serve over 300 hospital beds across several countries such as Malaysia, Singapore, Indonesia, Taiwan, India and United Arab Emirates. The group has more than 30 years of experience in highway maintenance having managed and maintained over 3,100km of expressways in Malaysia and Indonesia.

• We see the demand for hospital support services to rise overtime in tandem with the rising number of Covid-19 cases across the globe. Already, the group’s indirect subsidiary has recently secured a hospital support services contract valued between RM264.5m-284.0m from the Ministry of Health of Singapore back in July 2020 to sustain the facilities management business segment.

• We like UEM Edgenta for its strong balance sheet with a low net gearing of 0.02x in 1QFY20. Meanwhile, prospective dividend yields are also decent at 4.1% and 6.0% for FY20f and FY21f respectively.

Technical Outlook

• Technically, price has found some support and rebounded over the past couple of days. Price has gapped up to close above the daily EMA60 level accompanied by rising volumes. The recovery beyond RM2.13 suggests price may stage further upside towards the next resistances at RM2.30-2.48 with long term target at RM2.65. Support is pegged at RM2.02 and cut loss is located at RM2.00.

Source: Mplus Research - 26 Aug 2020