Maybank-Kim Eng starts United Engineers (U04.SG) at Buy with a $4.18 target; “with an investment property portfolio worth $1.7 billion, United Engineers, a long undervalued company, is on the brink of a major transformation to unlock value.”
The house notes major shareholder OCBC, which holds a 24.5% stake, could be the catalyst for change after the bank’s steps on divesting its holdings in F&N (F99.SG), APB and Straits Trading (S20.SG); “all eyes are now on UEL, the last remaining piece of the OCBC jigsaw.”
The URA’s review of its master plan for Singapore could mean a plot ratio increase, offering UEL a unique opportunity to redevelop key commercial asset UE Square, located near an upcoming Downtown MRT line station, it says.
“In addition, with potential buyers in acquisitive mode, we do not rule out a sale of its hospitality assets - at the right price.” The house estimates UEL’s RNAV at $5.30/share. The stock is up 6.2% at $3.09 in strong volume.
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