OSK Research Sdn Bhd is maintaining a 'Buy' recommendation for Faber Group and has revised its target price to RM4.00 from RM3.58 previously.

The research house said the justification for the recommendation was based on the fact that Faber's 15-year concession for government hospital support services, which was due to expire in October 2011, would be renewed for another 15-years.

'The value for this business is RM716 million derived from a discounted cash flow valuation based on OSK Research's assumption,' it said in a research note today.

While examining other possible outcomes based on different scenarios, OSK Research said the concession was valued as low as RM285.2 million under the worst-case scenario and as high as RM905 million under the best scenario.

Faber's share price closed nine sen higher at RM3.22 with 638.8 million shares traded. -- Bernama