Hong Leong Asia (H22.SI) shares are soaring 4.63% in intraday trading on Wednesday, as investors react to a positive outlook from analysts regarding the company's future earnings potential. The stock's significant uptick comes on the heels of a research report highlighting strong growth prospects for the Singapore-listed company.
According to UOB Kay Hian analysts, Hong Leong Asia is well-positioned to deliver robust earnings growth in the coming years, particularly from 2025 to 2027. The company's two main segments are expected to drive this growth. The building materials segment is likely to benefit from increased construction demand in its key markets of Singapore and Malaysia. Meanwhile, the diesel engine segment is anticipated to experience strong volume growth across new markets, further bolstering the company's performance.
In light of these positive projections, UOB Kay Hian has raised its target price for Hong Leong Asia to S$1.46 from S$1.11, while maintaining a buy rating on the stock. The analysts also noted that the company's shares appear undervalued given the optimistic outlook for its businesses. This upbeat assessment from a reputable brokerage firm seems to be fueling investor confidence, contributing to today's significant stock price increase.
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