Period 3Q12/9M12
Actual vs. Expectations
Uzma Bhd’s (“UZMA”) 3Q12 net profit
of RM5.7m brought its 9M12 net profit to RM15.8m, which was broadly in line
with market expectations.
The reported 9M12
accounted for 70% and 69% of our (RM22.3m) and consensus’ estimate (RM22.8m).
The main variance for
the lower-than-expected net profit was the late deployment of the seventh unit of
UzmAPRES.
Dividends No
dividend was declared as expected.
Key Results Highlights
QoQ, the 3Q12 net profit grew by 7.0% from RM5.3m
in 2Q12, on the back of rising revenue, which improved by 16% to RM81.4m from RM69.9m
in 2Q12.
The marginally lower
net earning growth of 7% in 3Q12 (vs. 10% in 2Q12) was again partly due to the
further delays in the deployment of the seventh unit of UzmAPRES. Note,
however, that this unit is now finally ready for deployment by next week.
YTD, the 9M12 net
earnings soared by 94% from RM8.2m in 9M11, attributable to the 57% growth in revenue
(from RM131.4m) and the improvement in the net margin of 10% (from 8% last
year) on account of better cost management on Uzma’s part. In addition, its
only JCE – Setagap Venture Petroleum (SVP) has also contributed RM2.2m in 9M12.
Outlook We are
optimistic that UZMA will be able to deliver sterling FY12 full-year results as
its 9M12 net earnings has already surpassed the FY11A net profit of RM12.1m.
For its eighth unit
of UzmAPRES, UZMA has received the Purchase Order (PO) approval and is awaiting
further instruction for deployment from the end user.
In addition, we are
expecting its JCE to contribute RM3.0m earnings in FY12E.
Change to Forecasts
Maintaining our
FY12-14E net incomes of RM22.3m-RM34.0m
Rating MAINTAIN OUTPERFORM
Valuation We
are keeping our target price of RM2.04 unchanged, which is pegged to a 9.0x PER
on our FY13E EPS estimate of 22.7 sen.
Risks Delays
in the deployment of its upcoming UzmAPRES units due to clients’ requests.
A decline in the
global crude oil price trend that will discourage O&G activities.
Source: Kenanga
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