UMS expects significant revenue growth from the new customer and better group net margin from lower start-up costs. Upgrade to BUY with a 27% higher UMS's target price of S$1.21.
2024 earnings in line with expectation.
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Final dividend for 4Q24 dropped 10% y-o-y to 2.0 cents. See UMS's dividend dates.
4Q24 earnings of S$11m showed an improvement of 6% q-o-q, due to a 4% increase in revenue q-o-q and a S$3m forex gain.
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2024 revenue declined 19% y-o-y due to the weaker semiconductor segment.
UMS’ semiconductor sales fell 19% y-o-y. The softer semiconductor performance was due to weaker global chip demand. Semiconductor integrated system sales dropped 33% y-o-y to S$94m in 2024 while component sales declined 8% y-o-y to S$110m.
Geographically, all key markets except Malaysia posted lower revenue in 2024. Revenue in Malaysia surged 97% in 2024 as orders from the new customer increased. Revenue in Singapore, the US, Taiwan and others reported sales declines of 23%, 6%, 36% and 36% respectively.
UMS expects good prospects in 2025.
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Above is an excerpt from a report by UOB Kay Hian Research. Clients of UOB Kay Hian may be the first to access the full PDF report @ https://www.utrade.com.sg/.
