KUALA LUMPUR (Sept 5): UEM Edgenta Bhd's share price rose after falling as much as 30 sen or 9% to RM3 so far today. The stock rose on bargain hunting and after analysts expressed optimism on the integrated facilities management specialist's outlook.
At 9:24am, UEM Edgenta shares rose one sen or 0.3% to RM3.31 with 30,200 units transacted.
Analysts had yesterday attended UEM Edgenta's briefing. Today, Hong Leong Investment Bank Bhd analysts Sheikh Abdullah and Farah Diyana Kamaludin wrote in a note UEM Edgenta's focus is on growing its order book to boost top line while ramping up technology-cost efficiency to maintain profit margins.
They said Hong Leong expects UEM Edgenta's organic revenue growth to follow through in financial year ending Dec 31, 2019 (FY19). Edgenta has RM13.2 billion of work in hand as at 1HFY19, according to them.
According to the analysts, Hong Leong maintained its buy call for UEM Edgenta shares with an unchanged target price (TP)at RM3.58.
"The stock remains a good exposure to a stable earnings stream with FY19-20 dividend yield of 3.8%-4.0% to match. We like UEM Edgenta for its defensive earnings profile and pivot towards healthcare support services regionally. We expect more news flow from regional healthcare support services jobs in 2HFY19," the analysts said.
MIDF Amanah Investment Bank Bhd analyst Noor Athila Mohd Razali wrote in a note today MIDF raised its TP for UEM Edgenta to RM3.45 from RM3.28 previously following a revision on MIDF's profit margin assumptions for each of UEM Edgenta's business segments.
"Pending further news flow on new contract wins, we are maintaining our neutral recommendation on UEM Edgenta at his juncture. Though we remain optimistic on UEM Edgenta’s growth prospect going forward; as mentioned in our recent earnings report we opine that all the positives have been priced in at this juncture.
"UEM Edgenta’s share price has also risen by more than 15% since our last TP revision (to RM3.28, back in February 2019) which we believe now limits the room for further share price appreciation," Noor Athila said.