I came across CIMB report on UMS holdings below, what's your take on UMS with latest price of $0.65? too high or still good to add more?
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Target S$0.80 (Stock Rating: ADD)
UMS's FY13 core net profit was 9% above consensus and 15% above our forecasts. While the full-year profit growth of 70% yoy was eye-popping, the icing on the cake was the 2 Scts ordinary DPS and 1.5 Scts special DPS. This brings its FY13 DPS to a record 6.5 Scts. Given the stronger earnings outlook, we raise our FY14-15 core EPS forecasts by 20% on the back of higher sales and margin assumptions. We also introduce our FY16 forecasts. We raise our target price to S$0.80, based on 1.38x CY14 P/BV (average P/BV of the past two earnings recovery cycle) and maintain our Add rating. Potential catalysts are: 1) higher-than-expected DPS payout, and 2) possible new order wins.
Ends FY13 with a bang!
UMS ended 4Q13 with a record S$11.0m profit, its highest quarterly profit since FY11. This was driven by the strong recovery in the semiconductor industry after the breather experienced in 3Q13. Gross profit margin also recovered back to the 47% range experienced in a good year. To cap the record performance, UMS proposed a final DPS of 2 Scts and a special DPS of 1.5 Scts. The company remains in a net cash position.
Expect a strong 1H14 at least
FY14 is again expected to be a good year, with industry forecaster SEMI predicting that semiconductor equipment sales will expand by 23.2% in CY14 followed by 2.4% in CY15. Another forecaster, Gartner, sees semiconductor capital spending expanding 14.1% in CY14 and 13.8% in CY15. Based on the order forecast from its key customer Applied Materials, UMS believes the outlook for 1H14 remains strong.
Maintain Add
Factoring in the latest outlook, we raise our core EPS forecasts by 20% for FY14-15. The focus for UMS, however, is its dividends. If we are right that FY14 will be another record, we could possibly see full-year DPS of 7 Scts or 11% yield. Major shareholder Andy Luong continued to sell some of his shares as part of his wealth planning process but the share sales appear to have halted for the moment. The cyclical nature of the industry remains and investors still need to be wary that 2H14 may not shape up as firmly from the overflow of the strong momentum into the first half.
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Target S$0.80 (Stock Rating: ADD)
UMS's FY13 core net profit was 9% above consensus and 15% above our forecasts. While the full-year profit growth of 70% yoy was eye-popping, the icing on the cake was the 2 Scts ordinary DPS and 1.5 Scts special DPS. This brings its FY13 DPS to a record 6.5 Scts. Given the stronger earnings outlook, we raise our FY14-15 core EPS forecasts by 20% on the back of higher sales and margin assumptions. We also introduce our FY16 forecasts. We raise our target price to S$0.80, based on 1.38x CY14 P/BV (average P/BV of the past two earnings recovery cycle) and maintain our Add rating. Potential catalysts are: 1) higher-than-expected DPS payout, and 2) possible new order wins.
Ends FY13 with a bang!
UMS ended 4Q13 with a record S$11.0m profit, its highest quarterly profit since FY11. This was driven by the strong recovery in the semiconductor industry after the breather experienced in 3Q13. Gross profit margin also recovered back to the 47% range experienced in a good year. To cap the record performance, UMS proposed a final DPS of 2 Scts and a special DPS of 1.5 Scts. The company remains in a net cash position.
Expect a strong 1H14 at least
FY14 is again expected to be a good year, with industry forecaster SEMI predicting that semiconductor equipment sales will expand by 23.2% in CY14 followed by 2.4% in CY15. Another forecaster, Gartner, sees semiconductor capital spending expanding 14.1% in CY14 and 13.8% in CY15. Based on the order forecast from its key customer Applied Materials, UMS believes the outlook for 1H14 remains strong.
Maintain Add
Factoring in the latest outlook, we raise our core EPS forecasts by 20% for FY14-15. The focus for UMS, however, is its dividends. If we are right that FY14 will be another record, we could possibly see full-year DPS of 7 Scts or 11% yield. Major shareholder Andy Luong continued to sell some of his shares as part of his wealth planning process but the share sales appear to have halted for the moment. The cyclical nature of the industry remains and investors still need to be wary that 2H14 may not shape up as firmly from the overflow of the strong momentum into the first half.
