Wednesday, April 18, 2012

UOADEV may have a bullish breakout

UOADEV broke above its symmetrical triangle at RM1.50 yesterday. With this upside breakout, the stock could test its next resistance at the horizontal line at RM1.60 or even at RM1.75.

Chart: UOADEV's daily chart as at April 17, 2012 9Source: Quickcharts)

UOADEV was listed at an IPO price of RM2.60 (for institutional investors) or RM2.52 (for retail investors) in June 2011. It slid all the way to a low of RM1.18 in early October 2011. It then swiftly rebounded to RM1.70 in late October 2011 and it has been trading within the symmetrical triangle for the past 6 months.

Its financial performance is mixed. For FYE31/12/2011, it reported a net profit of RM403 million on a revenue of RM614 million. This includes  a fair value adjustment to its investment properties of RM205 million. If this is excluded, its net profit would be RM198 million. This would translates to an EPS of 16.6 sen. Its Net Assets per share as at 31/12/2011 is RM1.51. At RM1.54, UOADEV is trading at a PE of 9.3 times or Price to book of 1 time. At these multiples, UOADEV is deemed fairly valued.

Recently UOADEV has proposed a 1st & final dividend of 10 sen for FY2011 (here). This gives the stock a dividend yield of 6.5%. The company has also proposed a dividend reinvestment scheme whereby the shareholders can use the dividend payable to purchase the company's stock at a 10% discount to the market price (here). The entitlement date for the dividend has yet to be fixed and it could be the reason for the present price breakout.

Based on technical breakout, UOADEV could be a trading BUY. However, you may want to nibble into this stock on pullback, given the present poor market sentiment.


JY said...

Hi Alex. UOA has broken its symetrical triangular. Can we use the width of the triangle to project a price target? In this case, TP for UOA = 2.03?

Alex Lu said...


Yes, you may use the width of the triangle to project a price target. However, given the current market condition, that level may be reached in the near or medium-term.

desmond said...

Hi Alex, recently UOADEV propose share buy back. Do you feel it is good for its share price?