- UMS expects market uncertainties to persist and only foresees marginal earnings improvement in 2H24 due to a slower-than-expected ramp-up of its new customer. Maintain SELL and target price of S$0.90, based on 15x 2024 EPS.
2Q24 earnings missed expectations due to absence of forex gain.
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- UMS benefitted from improved gross margin which grew 2.9pt y-o-y to 53.1% in 1Q24 mainly due to a change in product mix.
2Q24 revenue declined 26% y-o-y due to the weaker semiconductor segment.
- UMS’s semiconductor sales fell 29% y-o-y. The weaker semiconductor performance was due to weaker global chip demand. Semiconductor integrated system sales dropped 39% y-o-y to S$21m in 2Q24 while component sales declined 18% y-o-y to S$25m.
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Expects market uncertainties to continue, ramp-up of new customer is slower-than-expected
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