• UMS's 2Q18 net profit formed 30% of our full-year forecast. 1H18 was 53% of our FY18F, in line with the historical average of 52% for FY10-17.
• 2Q18 revenue fell 18% y-o-y due to the decline in orders from its major customer.
• UMS declared 2Q DPS of 1 Sct. Net cash position of S$11.6m as at end-2Q18.
• Management guides for softer revenue in 2H18 but still expects to remain profitable for the full year.
• Target Price maintained at S$1.21, based on an unchanged P/BV multiple of 2.82x.

We Deem 2Q18 in Line

UMS's 2Q18 net profit of S$14.5m formed 30% of our full-year forecast. 1H18 net profit of S$25.9m formed 53% of our full-year forecast, in line with the historical average of 52% (FY10-17).

Gross material margin hit a record 64% in 2Q18 (2Q17: 51%; 1Q18: 57%) due to a higher proportion of semiconductor component sales which command better margins.

1 Sct DPS was declared and the balance sheet remained in a net cash position of S$11.6m as at end-2Q18.

Source: CGS-CIMB Research - 14 Aug 2018