- UMS's 2Q23 earnings of S$12m (-20% y-o-y) was below expectations, with 1H23 earnings forming 39% of our full-year estimate. 2Q23 revenue fell 14% y-o-y due to a decline in the semiconductor and others segments.
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- Upgrade UMS to BUY and raise target price by 28% to S$1.24.
2Q23 earnings below expectation.
- UMS Holdings (SGX:558)’s 2Q23 revenue fell 20% y-o-y due to a 14% decline in the semiconductor segment and 56% decline in the others segment due to a slowdown in the material distribution system.
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- Revenue in the semiconductor segment fell 14% as global semiconductor demand remained soft while revenue in the others segment plunged 48% mainly due to the weaker material and tooling distribution business being affected by the general business slowdown. The decline in semiconductor revenue was due to a 29% drop in component sales (from S$44m in 2Q22 to S$31m in 2Q23) caused mainly by the weaker demand from back-end semiconductor customers.
- UMS's Semiconductor Integrated System sales continued to do well, increasing 6% from S$32m in 2Q22 to S$34m in 223. All the key geographical markets posted lower sales in 2023, except for Taiwan which reported 2% sales improvement due mainly to higher component spares sales.
- Read more at SGinvestors.io.
