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. 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%).

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Source: Maybank Research - 23 April 2012