UMS Holdings - DBS Research 2023-05-11: Expect Weaker 2Q, Recovery In 2024

• UMS (SGX:558)'s 1Q23 revenue eased 5% y-o-y to S$80.8m.
  • The semiconductor segment, which accounted for 90% of total revenue, eased 1% y-o-y and 14% q-o-q.
  • The semiconductor integrated system sales remained strong, surging 37% y-o-y to S$40.9m but revenue from component sales was down 26% to S$32.0m in 1Q23. The decline in component sales is mainly attributed to the weaker demand from back-end semiconductor customers, in particular the JEP division.
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  • The “Others” segment was impacted by the absence of the delivery of Kalf‘s water disinfection system and a slowdown in the group’s material distribution business. Revenue declined 56% y-o-y to S$3.7m.
• UMS's 1Q23 net profit declined 10.4% y-o-y (+7.5% q-o-q) to S$17.4m, mainly affected by higher expenses, in particular depreciation charges, utility expenses, and costs for the upkeep of machinery. Gross margin of 50.2% for 1Q23 was relatively stable, vs 51.4% in 1Q22 and 46.5% in 4Q22.
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• Overall, UMS's 1Q23 revenue and net profit account for 21% and 18% of our forecast, respectively, vs 23% and 20% in 1Q22, slightly below expectations.

Healthy cash flow, net cash surged 58.5% q-o-q

• Read more at SGinvestors.io.

Above is an excerpt from a report by DBS Group Research.
Clients of DBS may access the full PDF report @ https://www.dbs.com/insightsdirect/.

Read also DBS's most recent report:
2024-08-14 UMS - Short-Term Bump, Long-Term Gain.

Previous report by DBS:
2024-05-14 UMS - Short-term Hiccups.

Price targets by other brokers at UMS Target Prices.

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UMS Dividend Payout Dates & Corporate Actions,
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