CIMB Research keeps Uchi Tech an Outperform

KUALA LUMPUR: CIMB Equities Research is maintaining its Outperform outlook on Uchi Technologies Bhd and a target price of RM1.62.

It said on Tuesday, Aug 2 the positive takeaway from its recent teleconference was the potential upside to our dividend and earnings forecasts.

“Uchi expects low single-digit revenue growth, better than our 1% forecast. Core profit growth could be in the 0%-8% range versus our forecast of 2% growth. Dividends could match last year’s payout vs. our forecast of a 17% fall if Uchi meets its earnings projections,” it said.

CIMB Research said Uchi is still worried about currency effects and maintained its guidance of a slower 2H11 due to supply disruption, weak demand and relocation of Eugster’s production.

“We maintain our EPS and RM1.62 target price, still based a 20% discount to our 14.5 times target market P/E. Valuations remain attractive and yields are double-digit. The stock remains an OUTPERFORM as it could be catalysed by earnings/dividend surprises,” it said.