Reiterate BUY; TP has upside bias with this development. UMW's move to purchase 1+1 rigs from Standard Drilling is to capitalise on the rising demand for locally-owned rigs in Malaysia and Asia. The acquisitions could add up to MYR42m p.a. a rig to our FY14 earnings estimates. We have not incorporated this into our forecasts pending clarification on returns from these two rigs. We also maintain our TP, based on 12x FY13 EPS. We continue to like UMW for an exposure to both the auto and O&G sectors.

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Source: Maybank Research - 27 June 2012