Wednesday, October 04, 2006

Stock Upgraded: UOL target price raised to 3.94 by CIMB-GK!

CIMB-GK Research has raised its target price for UOL Group Ltd by 5 pct to 3.94 sgd per share after its 78 pct-owned Hotel Plaza announced it will sell its stake in Hotel Grand Plaza to Hong Kong's Park Hotel Group for 141.2 mln sgd. Hotel Plaza is expected to book a one-time gain of 86.6 mln sgd from the sale. "We have raised UOL's 2006 earnings per share forecast by 64 pct to 21.7 Singapore cents, on account of the 86.6 mln sgd divestment gain," CIMB-GK said in a client note. "We believe, given UOL's strong balance sheet, there is a fairly good chance that UOL may distribute the proceeds, although we have not factored this in in our forecasts," it added. CIMB-GK said UOL remains a key proxy to Singapore's asset reflation theme with its portfolio of quality investment properties and residential projects and is maintaining its "outperform" call on the stock. At 9.42 am, UOL was up 0.10 sgd or 2.86 pct at 3.60 with 498,000 shares traded.

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