- Upgrade UMS to BUY from HOLD as its outlook is improving. UMS’s FY24 PATMI of S$40.6m was slightly below our and consensus estimates.
- - Read this at SGinvestors.io -
Expects margin improvement.
- UMS has gone through a huge learning curve while ramping up for its new customer in FY24 and has also incurred additional costs in doing so.
- Going forward, we expect execution to improve and UMS should be able to do so with higher margins. We expect net margin to improve by 1-1.5ppt from FY24.
- - Read this at SGinvestors.io -
New customer revenue to more than double.
- UMS's new customer’s revenue contribution was about S$20m for FY24. Management expects this figure to more than double as it continues to ramp up on new product initiatives and existing products from its new customer.
- We expect revenue contribution of around S$50m for FY25E.
Q-o-q improvement likely; raising target price to S$1.16.
- Read more at SGinvestors.io.
