BIMB SECURITIES RESEARCH

MARKET INSIGHT
PP16795/03/2013(031743)

Thursday, 24 May, 2012

Results Review

Uzma
Inline Entering Full Swing
UZMA 176.00 MK 88 Equity 2.1 1.51 0.0 35.7% Y n.a. Altman Z-score YTD price chg YTD KLCI chg Beta Major Shareholders Muhamed Kamarul Shah Rozita Mat Redz Lembaga Tabung Haji 3.3 18.3% 0.6% 0.7 45.5% 9.6% 7.7%

Buy
Price: Target Price: RM2.00 (35.0% upside) RM2.70
Uzmas 1QFY12 core net profit of RM4.7m is inline with our estimates and is a record quarterly performance for the Group. While its quarterly performance has weakened at both revenue and gross profit level due to lower activities at Geoscience and Petroleum Engineering (GPE) and wireline segments, we maintain our numbers as we expect execution of contracts will progressively enter into full swing for the rest of the year. Its acquisition of 30.02% stake in Setegap Petroleum Venture at RM7.5m early of this year proved to be value accretive where it contributed close to RM1m of net profit. Maintain Buy call with target price RM2.70. Proved to be a turnaround story. YoY revenue jumped by 157% while net profit skyrocketed by 236%. Though quarterly performance for both revenue and gross profit weakened due to lower activities from GPE and wireline segments, its acquisition of 30.02% stake in Setegap Petroleum Venture (enrolled under Petronass Vendor Development Programme) at RM7.5m early of this year proved to be value accretive where it contributed close to RM1m of net profit. Quarterly net profit of RM4.7m is a record achievement for the Group where it has consistently expanded over the past 7 quarters. Projects execution entering full swing. With orderbook of about RM1bn, the Groups current focus in projects execution is reflected by the appointment of its new Chief Operating Officer early of this year as well as the fund raising exercise recently. We expect contracts in hand which includes the RM170m wireline and the RM350m well testing contracts to progressively enter into full swing this year. Already the execution for the well testing contract had commenced recently while UzmaPres unit 6 and 7 are expected to be installed by June. Earnings maintain. We maintain our estimates as we foresee contracts execution to progressively enter into full swing this year. View & Valuation. The Group had recently announced a 1:2 bonus issue which we expect to improve its stocks liquidity and price discovery. Still our favourite for small cap with Buy call and target price of RM2.70 at valuation of 10 PER on FY12 EPS of 27sen.

Stock Data Bloomberg Ticker Market Cap Issued shares 52-week range (H) 52-week range (L) 3-mth avg daily volume Free Float Shariah Compliant Financial Derivatives Share Performance (%) Absolute vs. KLCI Financial Highlights FYE 31 Dec Turnover (RMm) EBIT Pretax profit Core Net Profit EBIT margin Pretax margin Effective tax rate ROE ROA Net Gearing (x) Core EPS (sen) Core EPS growth PER (x) (%) DPS (sen) Div. Yield (%) NTA/share (RM)

1mth -2.9% -0.2%

3mth 0.0% 2.8%

12mth -0.1% -2.9%

2009 98.8 -12.0 -12.5 -12.0

2010 116.1 -0.8 -2.2 -2.0

2011 192.3 17.5 16.7 12.1

2012E 287.2 33.7 32.4 23.8

2013E 366.5 44.9 43.1 31.7

-12.1% -0.6% 9.1% 11.7% 12.3% -12.6% -1.9% 8.7% 11.3% 11.8% n.a n.a -23.3% -25.0% -25.0% -23.5% -2.4% 19.9% 24.2% 25.3% -16.1% -1.4% 9.2% 13.7% 14.5% 0.0 Net Cash Net Cash Net Cash Net Cash -13.6 -2.3 13.7 27.0 36.1 -216.4% 82.9% 688.4% 97.1% 33.6% -14.7 -85.9 14.6 7.4 5.5 2.3 0.0 0.0 4.1 5.4 1.1% 0.0% 0.0% 2.0% 2.7% 0.6 0.6 0.7 1.1 1.4

Growth ratios Turnover -26.6% EBIT -188.0% Pretax profit -195.2% Core Net profit -216.4% Share Price Chart

17.5% 93.7% 82.6% 82.9%

65.6% 2430.5% 868.7% 688.4%

49.4% 92.2% 94.7% 97.1%

27.6% 33.1% 32.9% 33.6%

Chiong Tong Chai chiongtc@bimbsec.com.my 03-26918887 ext 175

|1

24 May 2012

Results Review: Uzma 1QFY12

1QFY11 35.1 2.9 2.7 (0.6) 0.1 2.1 2.0 2.3 0.0 1.3% 0.8% 3.4% 2QFY11 40.0 3.1 2.8 0.3 0.2 3.1 2.9 3.3 NC 8.3% 7.7% 6.0% 3QFY11 56.3 4.7 4.7 (1.3) 0.2 3.5 3.3 3.7 NC 7.7% 7.0% 7.8% 4QFY11 60.9 6.8 6.4 (2.3) 0.2 4.1 3.9 4.4 NC 8.4% 8.4% 6.1% 1QFY12 55.3 5.6 6.1 (1.3) 0.1 4.8 4.7 5.3 NC 11.1% 10.5% 6.8% QoQ -9.2% -17.4% -4.5% -42.9% -44.4% 16.9% 20.3% 20.3% NC 10.1% 11.1% 8.7% YoY 157% 191% 225% 214% 99% 228% 236% 236% n.m -9.1% 5.2% 28.7% 3MFY12 55.3 5.6 6.1 (1.31) 0.1 4.8 4.7 5.3 n.m 122% 143% 145% 3MFY11 35.1 2.9 2.7 (0.61) 0.1 2.1 2.0 2.3 NC 10.1% 11.1% 8.7% YTD Chng 57.4% -91.4% -124.9% -114.1% -0.8% -128.0% -135.8% -135.8% n.a -21.6% -42.9% -44.9%

Quarterly figures
FY 31 Dec (RMm) Revenue EBIT Pretax profit Taxation Minority Interest Net Profit Core Net Profit EPS (sen) Net gearing (x) EBIT margin (%) PBT margin (%) Net profit margin (%)

Source: BIMB Securities

Income Statement
FY 31 Dec (RMm) Revenue Pretax profit Core Net profit Core EPS (sen) EPS growth (%) DPS (sen) NTA/ share (RM) Net gearing (x) PER (x) P/NTA (x) Net div. yield (%) EV/ EBITDA (x) ROE (%) 2009 98.8 -12.5 -12.0 -13.6 -216.4% 2.3 0.58 0.01 -14.7 3.5 1.1% -17.5 -23.5% 2010 116.1 -2.2 -2.0 -2.3 82.9% 0.0 0.57 NC -85.9 3.5 0.0% 220.4 -2.4% 2011 192.3 16.7 12.1 13.7 688.4% 0.0 0.71 0.01 14.6 2.8 0.0% 10.4 19.9% 2012E 287.2 32.4 23.8 27.0 97.1% 4.1 1.13 NC 7.4 1.8 2.0% 5.4 24.2% 2013E 366.5 43.1 31.7 36.1 33.6% 5.4 1.44 NC 5.5 1.4 2.7% 4.1 25.3%

Source: BIMB Securities

Balance Sheet
FY 31 Dec (RMm) Non Current Assets Current Assets Total Assets Current Liabilities Non Current Liabilities Shareholders' Fund Minority Interests Equity & Liabilities 2009 19.3 54.7 74.0 2010 26.8 62.4 89.2 2011 34.3 104.7 139.0 2012E 42.8 135.0 177.9 2013E 49.5 172.9 222.3

17.0 6.4 49.9 0.7 74.0

26.5 10.4 47.9 4.3 89.2

57.2 17.6 60.0 4.2 139.0

57.9 19.3 96.2 4.5 177.9

71.0 23.7 123.2 4.5 222.3

Source: BIMB Securities

www.bimbsec.com.my

|2

24 May 2012
DEFINITION OF RATINGS BIMB Securities uses the following rating system:

Results Review: Uzma 1QFY12

STOCK RECOMMENDATION BUY Total return (price appreciation plus dividend yield) is expected to exceed 10% in the next 12 months. TRADING BUY Share price may exceed 15% over the next 3 months, however longer-term outlook remains uncertain. NEUTRAL Share price may fall within the range of +/- 10% over the next 12 months TAKE PROFIT Target price has been attained. Fundamentals remain intact. Look to accumulate at lower levels. TRADING SELL Share price may fall by more than 15% in the next 3 months. SELL Share price may fall by more than 10% over the next 12 months. NOT RATED Stock is not within regular research coverage. SECTOR RECOMMENDATION OVERWEIGHT The Industry as defined by the analysts coverage universe, is expected to outperform the relevant primary market index over the next 12 months NEUTRAL The Industry as defined by the analysts coverage universe, is expected to perform in line with the relevant primary market index over the next 12 months UNDERWEIGHT The Industry as defined by the analysts coverage universe, is expected to underperform the relevant primary market index over the next 12 months Applicability of ratings The respective analyst maintains a coverage universe of stocks, the list of which may be adjusted according to needs. Investment ratings are only applicable to the stocks which form part of the coverage universe. Reports on companies which are not part of the coverage do not carry investment ratings as we do not actively follow developments in these companies. Disclaimer The investments discussed or recommended in this report not be suitable for all investors. This report has been prepared for information purposes only and is not an offer to sell or a solicitation to buy any securities. The directors and employees of BIMB Securities Sdn Bhd may from time to time have a position in or either the securities mentioned herein. Members of the BIMB Group and their affiliates may provide services to any company and affiliates of such companies whose securities are mentioned herein. The information herein was obtained or derived from sources that we believe are reliable, but while all reasonable care has been taken to ensure that stated facts are accurate and opinions fair and reasonable, we do not represent that it is accurate or complete and it should not be relied upon as such. No liability can be accepted for any loss that may arise from the use of this report. All opinions and estimates included in this report constitute our judgements as of this and are subject to change without notice. BIMB Securities Sdn Bhd accepts no liability for any direct, indirect or consequential loss arising from use of this report.

Published by

BIMB SECURITIES SDN BHD (290163-X) A Participating Organisation of Bursa Malaysia Securities Berhad Level 32, Menara Multi Purpose, Capital Square, No. 8 Jalan Munshi Abdullah, 50100 Kuala Lumpur Tel: 03-2691 8887, Fax: 03-2691 1262 http://www.bimbsec.com.my

Kenny Yee Head of Research

www.bimbsec.com.my

|3