UMS Holdings

Market watchers are expecting UMS Holdings to ride an expected recovery in the semiconductor industry, after the precision engineering group beat analysts’ estimates by a significant margin with a better-than-expected set of results for 3QFY2019 ended September.

UMS saw its earnings jump 21% to $9.2 million during the quarter, on the back of a 12% rise in revenue to $32.9 million. The higher revenue was led by a 14% increase in contribution from the semiconductor segment, driven by a surge in demand for semiconductor integrated systems.

CGS-CIMB Research analyst William Tng opines that with an industry upswing underway, UMS is expected to deliver a stronger q-o-q performance in 4QFY2019. Thus, the research house has raised the group’s FY2019 forecasts.

“The oversupply in the memory market is easing,” says Tng in a Nov 12 report. The analyst has also raised his FY2020-FY2021 earnings forecasts, noting that UMS recently renewed its contract with a key customer, Applied Materials.

DBS Group Research agrees that the successful contract renewal bodes well for the company. The way analyst Ling Lee Keng sees it, the renewal of the contract for another three years helps to strengthen UMS’ earnings visibility.

“Demand is picking up, with chip inventories easing and new technological disruptors driving the growth of new products and capabilities,” Ling says in a Nov 13 report. “We have revised up our projected earnings by 6% to 7%, as we expect the growth momentum to continue.” —