KUALA LUMPUR: RHB Research Institute Sdn Bhd has initiated coverage on UEM Edgenta Bhd with a “buy” call on expectations of robust growth based on a steady inflow of new jobs from the growing integrated facilities management (IFM) market.
UEM Edgenta is Malaysia’s largest IFM provider with expertise covering consultancy, services and solutions for the healthcare, infrastructure and real estate segments.
RHB Research said UEM Edgenta was expected to continue benefiting from the nation’s growing IFM market, which recorded a 7.9 per cent compound annual growth rate over the last five years.
The research firm said that UEM Edgenta’s infrastructure wing was set to embark on a performance-based contracting (PBC) framework for the network management and maintenance of the North-South Expressway.
“The PBC framework is also expected to improve its infrastructure solutions wing’s margins,” RHB Research said.
It opined that the stock would offer decent financial year 2018 and 2019 dividend yields of four to five per cent.
“We like UEM Edgenta and set a target price of RM3.22 for the stock,” RHB Research added.
At lunch break, UEM Edgenta added one sen to RM2.71 with 250,100 shares traded.