KUALA LUMPUR (Jan 30): Kenanga IB Research has downgraded Uzma Bhd to “Market Perform” at 76 sen with a higher target price of 81 sen (from 65 sen) after Uzma said it is acquiring an additional 15% stake in Setegap Ventures Petroleum for RM36 million, bringing its total stake to 64%.

In a note today, the research house said the acquisition implies valuations of 14x PER, and is 4-10% earnings accretive to FY19-20.

“While we are positive on the acquisition due to synergistic benefits, acceptable valuations and positive earnings impact, we downgrade our call to Market Perform due to earnings delivery concerns and strong share price rebound; despite raising its target price to 81 sen,” it said.