KUALA LUMPUR, Sept 8 (Bernama) -- Bursa Malaysia closed almost flat on Tuesday as buying interest rotated away from index heavyweights towards smaller-cap construction stocks, with sentiment affected by geopolitical uncertainty, said an analyst. At 5 pm, the FTSE Bursa Malaysia KLCI (FBM KLCI) eased 0.39 of a point to 1,714.40 from Monday’s close of 1,714.79. The benchmark index opened 1.65 points lower at 1,713.14 and moved between 1,710.44 and 1,714.50 throughout the trading session. The broader market was almost evenly balanced, with decliners leading gainers 548 to 546, while 598 counters were unchanged, 1,107 were untraded and 25 were suspended. Turnover expanded to 4.13 billion units valued at RM3.14 billion from 3.60 billion units valued at RM2.45 billion on Monday.
While Singapore's market is filled with value plays trading below 13x earnings, UOL Group stands out with a P/E ratio of 16.3x — higher than nearly half the listed companies. That alone might make some value investors scoff and move on.
But not so fast.
Despite a recent 49% drop in profits, the market seems to be betting that UOL’s downtrend is only temporary. Is this a sign of investor confidence — or a case of misplaced hope?
Let’s dig in. 👇
The Backstory: Mixed Signals
Earnings declined 49% last year
But EPS is still up 16% over the last 3 years (thanks to earlier gains)
Analysts expect 6.9% annual earnings growth over the next 3 years
The broader market expects 8.7% annual growth
So yes, growth is expected — just not spectacular growth.
Why Is the P/E Still So High?
That’s the million-dollar question.
A P/E of 16.3x is not extreme, but when paired with sub-par future growth projections, it seems a bit rich. The only explanation? Investors are betting on a turnaround — one better than analysts currently forecast.
If the rebound doesn’t come fast enough, UOL’s share price could struggle to hold its ground.
Investor Takeaway
If you believe in Singapore’s property recovery or expect upside surprises in earnings, UOL might still be worth holding.
But if you’re hunting for value with upside, the current valuation doesn’t leave much room for error.
UOL may still have loyal investors — but future gains will need stronger results to be sustained.
Risk note: There’s one warning sign flagged for UOL Group that investors should take into account. Always review a company’s fundamentals beyond the P/E ratio.
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