Public Investment maintains 'outperform' call for Uzma, TP at RM3.98

by **Cals** Fri 15 Aug 2014, 00:51

Business & Markets 2014

Written by Chen Shaua Fui of theedgemalaysia.com

Thursday, 14 August 2014 14:57

KUALA LUMPUR (Aug 14): Public Investment Bank Bhd maintained its "outperform" recommendation for Uzma Bhd with a target price of RM3.98 after the company announced a joint venture (JV) to provide integrated solutions to the oil and gas industry.

The JV followed an agreement between Uzma’s wholly-owned subsidiary Uzma Engineering Sdn Bhd and information technology company SmartCore Technologies.

In a report, Public Investment said the JV's material contribution to Uzma remained to be seen.

"When the JV company does secure any project(s), it is expected to contribute positively to the group's future earnings.

"Having enhanced its resources, we continue to await further "special projects", in activities such as brownfield rejuvenation and RSC (risk service contract) works going forward. To-date, Uzma's secured orderbook is about RM1.8bn, to last until 2017, and its bid book is estimated to be about RM2.8bn," Public Investment said.

Public Investment believes that the JV would strengthen Uzma’s competencies in technological resources required to complement its services.

"From our understanding, this JV is an integral part of the group's new segment – integrated solutions. As a new division, we can only expect any material contribution in the long-run, but (the JV) will strengthen Uzma's capabilities in the geoscience and petroleum engineering (GPE) division, thus, increasing its chances in securing contracts," Public Investment said.