UWC shares up despite lower 2Q earnings

UWC shares up despite lower 2Q earnings
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KUALA LUMPUR (March 17): UWC Bhd’s shares were up in early trade, despite posting lower earnings for the second quarter of its financial year ending July 31, 2023 (2QFY2023) due to higher costs and foreign exchange (forex) losses. 

At 10.30am, the counter gained 15 sen to RM3.30 sen, with 511,500 units traded.

The integrated engineering supporting services provider reported a 23.8% decline in net profit to RM19.1 million in 2QFY2023, from RM25.1 million in the same period a year ago. 

In a note on Friday (March 17), Hong Leong Investment Bank (HLIB) Research said it remained optimistic about both UWC’s business and the industries in which it operates for the coming years.

Following the construction of the class 100 cleanroom facility, UWC expects to increase new front-end exposure, as there are more projects in the pipeline. 

“The group is actively working with potential front-end customers for project transfer and is confident of securing orders from these new clients. 

“In life science or medical, it is engaging in various project transfers with customers to secure more full box-build jobs,” said HLIB Research. 

As such, the research house said it has reiterated a “hold” call on UWC with a lower target price of RM3.45, from RM4.00 previously, reflecting the downward earnings revision.