RHB Upgrades UUE to Buy, Sees Singapore Expansion and Strong Margins Driving Further Upside
Octopaul AI ·
RHB Investment Bank analyst Eddy Do upgraded UUE Holdings to “Buy” from “Neutral”, raising his target price to RM0.91 from RM0.80, implying 16% upside. Following UUE’s analyst briefing, he believes Singapore expansion, solar-interconnection opportunities and higher pipe sales offer growth drivers that are not yet fully reflected in valuations.
UUE plans to increase its Singapore drilling teams from 10 to 15 within 12 months, supporting faster project delivery. Management expects group gross margins to remain at 25%–30%, reinforcing Eddy’s confidence that recent margin strength is sustainable. He raised FY27–FY29 earnings forecasts by 14%, 11% and 4%, respectively, as higher margin assumptions outweighed lower revenue projections.
Eddy also sees valuation support, with UUE trading at approximately 17 times projected 2027 earnings on a fully diluted basis, broadly in line with the peer average of 17.5 times despite its stronger margins. He forecasts recurring net profit to rise from approximately RM22 million in FY26 to RM47 million in FY29, representing a three-year compound annual growth rate of approximately 29%.
As of 9:19 a.m. on October 29, UUE Holdings' share price rose 1.3% to RM0.785.
Disclaimer: All content is AI-aggregated from public sources for informational and educational purposes only. StockTipRatings.com does not constitute investment advice. Past performance and historical statistics are no guarantee of future returns.