HwangDBS keeps 'buy' call on UMW

HwangDBS Vickers Research has maintained its 'buy' call on UMW Holdings Bhd at a higher target price of RM8.55 from RM7.95.

In a note today, HwangDBS said UMW president/group chief executive officer, Datuk Syed Hisham Syed Wazir, appeared to be dedicated leader.

"His key focus areas were to turn around oil and gas division as well as sustain 2011 motor sales," it said.

It expected car sales to recover in the second half of the year helped by Toyota's facelift models and Perodua's new Myvi.

Meanwhile, AmResearch Sdn Bhd has maintained its 'hold' call on UMW at an unchanged fair value of RM6.50 despite being positive about the potential potential turnaround of its oil and gas division.

"We are concerned that the turnaround might not be strong as expected," it said in a note today.

AmResearch said it was sceptical about a strong recovery of the car sales in the second half of this year due to uncertainties in second-hand car values; longer purchase process; and, a potential price war in the last quarter when supply fully recovered.

"All these could result in further earnings cuts by analysts in the near term," it said.

The stock fell two sen to RM7.45 at mid-afternoon today. -- Bernama