CIMB-GK Research gave UTAC "neutral" rating TP $0.56

Thu, 20 Oct 2005 16:37:05 +0800


SINGAPORE (XFN-ASIA) - CIMB-GK Research gave United Test and Assembly
Corp
(UTAC) a "neutral" rating in its initial coverage of the stock as the
market has largely priced in a recovery for the semiconductor
industry.

The brokerage firm also said high oil prices could affect
longer-term demand for semiconductors.

"We have a target price of 0.56 sgd based on 12 times 2006 PE.
This compares with the average of 10 times 2006 PE for its global peers. We
are according a 20 pct premium to UTAC because it has a 40 pct exposure to
the less-volatile mixed-signal and logic processor market, compared with
the more volatile memory industry which its Taiwanese peers serve," CIMB
said in a client note.

"We believe its share price levels have priced in its potential.
We believe a 20 pct premium is fair for UTAC."

At 12.08 pm, UTAC was up 0.015 sgd or 2.6 pct at 0.60 on volume
of 6.244 mln shares.