PETALING JAYA: Sime Darby Bhd is projected to expand at a compounded annual growth rate (CAGR) of 14.8% from the financial year ended June 30, 2023 (FY23) to FY26, according to UOB Kay Hian Research (UOBKH Research).

The research house said the optimistic outlook is underpinned by the conglomerate’s recent value-accretive acquisitions, including UMW Holdings Bhd, as well as the projected recovery in China.

Initiating coverage on Sime Darby, UOBKH Research has a “buy” rating on the company, with a target price of RM3.13 pegged at 12.2 times its estimated price-earnings ratio for FY25.

“Sime Darby is poised to benefit from UMW, seizing broader opportunities in customers’ car-changing cycles in its motor-vehicles unit,” the research house said.

“The contribution from Sime Darby’s recent acquisitions, including the value-accretive acquisitions along with the recovery in the China market, underpins our projected three-year CAGR of 14.8% in FY23-FY26,” it added.

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