CIMB Research raised its target price on United Engineers
Ltd to S$3.14 from S$2.78 and maintained its
'outperform' rating to factor in the company's hospitality
assets and business park values.
United shares were down 0.4 percent at S$2.48 on Monday. The
stock has increased 32 percent so far this year versus the 25
percent gain in the FT ST Small Cap Index.
CIMB said United's portfolio of investment assets has grown
to S$1.7 billion ($1.4 billion). It added that it sees potential
for redevelopment of the company's building in Singapore, UE
Square, and does not rule out asset divestments.
United's balance sheet is likely to strengthen in 2014 - a
good time for large developments or acquisitions - and the firm
may give a potential dividend surprise, CIMB said. Its target
price was pegged to a 35 percent discount to revised net asset
value, it added.
However, CIMB flagged a weak 2012 fiscal year due to a
change in accounting treatment, with United's earnings backed
purely by investment properties and construction segment.
1110 (0310 GMT)
(Reporting by Eveline Danubrata in Singapore; Editing by
Sunil Nair; firstname.lastname@example.org)
($1 = 1.2267 Singapore dollars)