UMS Integration - Maybank Research 2024-11-12: 3Q Disappoints But Outlook Improves; Upgrade To HOLD

• The outlook is still cloudy, but we upgrade UMS Integration (SGX:558) to HOLD as earnings have likely bottomed.
• UMS’s 3Q24 PATMI of S$10.4m was below our and consensus estimates despite better q-o-q.
• - Read this at SGinvestors.io -

3Q24 stronger, q-o-q but not enough

• UMS's 3Q24 revenue declined 9% y-o-y to S$65m, while PATMI fell 32% y-o-y to S$10.4m (it was also weaker q-o-q). This was due to lower revenue from integrated systems, which fell 19% y-o-y, as demand from its key customer dropped.
• - Read this at SGinvestors.io -

New customer starts production

• Malaysia revenue grew 81.7% q-o-q to S$4.6m, mainly due to the commencement of mass production for its new customer.
• While UMS is still facing ramp-up issues due to labour shortages and qualification for certain products, we see this as a positive and things should improve, albeit at a slower pace than initially expected.

Earnings revision

• Read more at SGinvestors.io.

Jarick Seet Maybank Research | https://www.maybank.com/ 2024-11-12 SGinvestors.io

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