Towards Financial Freedom
UMSH - Bullish On 4Q And Beyond
UMSH's 2QFY13 results were in line, with PATAMI of SGD7.8m (+3% yo-y) on the back of revenue of SGD32.8m (-10% y-o-y). As expected, the group declared a one-cent interim dividend. While we expect a muted 3Q, the company's outlook for 4Q and beyond remains bright. Maintain BUY, with our DCF-based TP unchanged at SGD0.71 (WACC: 10.9%, terminal growth: 0%).
- In line. Due to the high base last year, UMS Holdings (UMSH)'s 2QFY13 revenue declined 10% y-o-y despite expanding by a commendable 18% q-o-q. Its net margin improved by 3 ppts y-o-y to 23.9%, due to: i) raw material and sub-contractor costs dropping by SGD1.1m, ii) a SGD0.6m drop in depreciation expenses as some of its assets had been fully written down, and iii) a SGD0.7m exceptional gain from the reversal of inventory provision.
- Taking a breather in 3Q. in line with our expectation, Management guided that UMSH' 3Q results will be softer as global spending on wafer manufacturing equipment is likely to slow down after two consecutive good quarters. However, we expect the slowdown to be short-lived as we see spending picking up again towards year-end to boost the company's 2HFY13 earnings by 96.9% y-o-y and that for FY13 by 10.2% y-o-y.
Source: OSK
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