Maintain OUTPERFORM. The positive takeaway from our recent teleconference was the potential upside to our dividend and earnings forecasts. Uchi expects lowsingle-digit revenue growth, better than our 1% forecast. Core profit growth could be in the 0-8% range vs. our forecast of 2% growth. Dividends could match last year’s payout vs. our forecast of a 17% fall if Uchi meets its earnings projections. Uchi is still worried about currency effects and maintained its guidance of a slower 2H11 due to supply disruption, weak demand and relocation of Eugster’s production. We maintain our EPS and RM1.62 target price, still based a 20% discount to our 14.5x target market P/E. Valuations remain attractive and yields are double-digit. The stock remains an OUTPERFORM as it could be catalysed by earnings/dividend surprises.
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