UMS Holdings - UOB Kay Hian 2023-02-07: Mindful Of Cautious Outlook By Chipmakers & Strong Rally In Stock Price

• We are seeing more cautious outlooks being released by leading chipmakers including TSMC, Intel, Qualcomm, and Samsung in their latest results. This could result in weaker revenue for UMS in the near term as its major customer’s order could slow down if the chipmakers delay or cut capex spending amid the weaker end-demand.
• - Read this at SGinvestors.io -
• Downgrade UMS to HOLD.

Weaker results and more cautious outlook from major chipmakers.

• Most of the leading semiconductor chipmakers have released their latest results since the beginning of 2023. They are generally more cautious and believe that semiconductor demand will be weak in 1H23.
  1. - Read this at SGinvestors.io -
  2. Intel reported 4Q22 earnings decline of 32% y-o-y and has projected a revenue decline of 40% q-o-q for 1Q23 due to dismal PC and data-centre markets as consumer choose to retain the PCs that were purchased during the pandemic.
  3. Qualcomm guided its revenue to decline 4% q-o-q, due to mobile phone demand remaining weak and the elevated levels of inventory sustaining for 1H23.
  4. Samsung warned that its latest quarterly profit would decrease by 66% as the weakening global economy has affected memory chip prices and reduced demand for electronic devices.

UMS’ revenue could weaken in the near term if chipmakers cut or delay capex.

• Read more at SGinvestors.io.

John Cheong UOB Kay Hian Research | https://research.uobkayhian.com/ 2023-02-07 SGinvestors.io

---