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.
Above is an excerpt from a report by Maybank Research. Clients of Maybank Securities may be the first to access the full PDF report @ https://www.maybanktrade.com.sg/.
