UMS Holdings

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UMS ACHIEVES ANOTHER RECORD BREAKING YEAR WITH 130% RISE IN FY2017 NET PROFIT TO S$52 MILLION
- Proposes final dividend of 2 cents per share and special dividend of 1 cent per share 

http://infopub.sgx.com/FileOpen/UMS_SGX_...eID=490423
http://infopub.sgx.com/FileOpen/UMS_FY_2...eID=490424
Research, research and research - Please do your own due diligence (DYODD) before you invest - Any reliance on my analysis is SOLELY at your own risk.
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One thing I noticed in the Financial Reports is : if the bonus shares that were given out in November 2017 were taken into account for the EPS calculation on 31.12.2016, the EPS would be only 1.29 cps. The calculation for EPS on 31.12.2017, ie an actual EPS calculation with the final total of shares in issue plus the latest earnings numbers as on 31.12.2017.

Hence, the earnings did increase by a lot in end-2017, compared to end-2016.
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(28-02-2018, 11:38 PM)WH Cheng Wrote: One thing I noticed in the Financial Reports is : if the bonus shares that were given out in November 2017 were taken into account for the EPS calculation on 31.12.2016, the EPS would be only 1.29 cps. The calculation for EPS on 31.12.2017, ie an actual EPS calculation with the final total of shares in issue plus the latest earnings numbers as on 31.12.2017.

Hence, the earnings did increase by a lot in end-2017, compared to end-2016.

The EPS of 1.29 cps doesn't seem right. 

It has been worked out and Restated on page 14 of the report, to be 3.10 cents, which you may disagree.....................
Research, research and research - Please do your own due diligence (DYODD) before you invest - Any reliance on my analysis is SOLELY at your own risk.
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(27-02-2018, 07:42 PM)Boon Wrote: UMS ACHIEVES ANOTHER RECORD BREAKING YEAR WITH 130% RISE IN FY2017 NET PROFIT TO S$52 MILLION
- Proposes final dividend of 2 cents per share and special dividend of 1 cent per share 

http://infopub.sgx.com/FileOpen/UMS_SGX_...eID=490423
http://infopub.sgx.com/FileOpen/UMS_FY_2...eID=490424

long time no see.
nice results.
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(01-03-2018, 05:56 AM)Boon Wrote:
(28-02-2018, 11:38 PM)WH Cheng Wrote: One thing I noticed in the Financial Reports is : if the bonus shares that were given out in November 2017 were taken into account for the EPS calculation on 31.12.2016, the EPS would be only 1.29 cps. The calculation for EPS on 31.12.2017, ie an actual EPS calculation with the final total of shares in issue plus the latest earnings numbers as on 31.12.2017.

Hence, the earnings did increase by a lot in end-2017, compared to end-2016.

The EPS of 1.29 cps doesn't seem right. 

It has been worked out and Restated on page 14 of the report, to be 3.10 cents, which you may disagree.....................
I did not finish my statement in the above,... What I wanted to write was : The calculation for EPS on 31.12.2017, ie an actual EPS calculation with the final total of shares in issue plus the latest earnings numbers as on 31.12.2017 was 2.95 cps.

I preferred to use Q4 as my talking point because the bonus shares were finally issued out in November 2017. It's 1.26 cps, not 1.29 cps.
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Over the last few months UMS has been trading down from a high of ~$1.34 to the current price of $0.865. Is it due to the impending expiry of their contract with Applied Materials?

Is there any news that could hint of a failure to renew the contract by end of next year?


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Analysts remain positive on UMS Holdings as sales in global semiconductor industry projected to reach all-time high
https://www.theedgesingapore.com/analyst...h-all-time
By:
Samantha Chiew
16/08/18, 01:13 pm
SINGAPORE (Aug 16): UMS Holdings announced that its 2Q18 earning have increased by 26% to $14.5 million, compared to $11.5 million in 2Q17.

This brings 1H18 earnings to $25.9 million, 14% higher than $22.7 million in 1H17.

However, revenue for the quarter saw an 18% drop to $35.2 million from $$42.7 million a year ago. This was mainly due to a 17% decline in sales from the group’s semiconductor business and the absence of revenue contribution from its Others segment.



Changes in inventories increased more than six fold to $6.20 million from $0.95 million last year.

The group declared an interim dividend of 1.0 cents per share, which will be payable on Oct 26.

ADVERTISING

Following the results announcement CGS-CIMB Securities is maintaining its “add” call on UMS Holdings with a target price of $1.21.

The group’s 2Q earnings was in line with and formed 30% of the research house’s full-year forecast.

In the mid- to long-term, the group believes that the prospects for the industry remain bright.

SEMI, the global industry association representing the electronics manufacturing supply chain, has projected a 10.8% increase in sales of new semiconductor manufacturing equipment globally to US$62.7 billion in 2018 ($86.5 billion), exceeding the historic high of US$56.6 billion in 2017.

Despite softened growth rate, the group noted that global billings for semiconductor equipment remain robust.

In a Tuesday report, analyst William Tng says, “Leading chipmakers in Asia have also cut their sales forecasts to single-digit growth rates for the second half of 2018 due to concerns over rising trade tensions between the US and China as well as slower demand.”

Although the group has guided for softer revenue in 2H18, it expects to remain profitable for the full year.

Similarly, DBS Group Research is reiterating its “buy” call on UMS Holdings with a lowered target price of $1.01.

For more than a decade, the group has partnered closely with Applied Materials. And despite its exposure to the cyclical industry, the group’s earnings has been less volatile since it secured the Endura contract in 2010.

In a Wednesday report, analyst Carmen Tay says, “In 2018, growth will mainly be supported by a ramp-up in its higher-margin Components business and cost benefits arising from its shift to Penang.”

In addition, the analyst believes that the group may sacrifice some of its ASPs and margins over the near-term for volume growth to capitalise on opportunities arising from trade shifts away from China into ASEAN.

Meanwhile, over the medium term, rosy demand forecasts for chips in attractive end-sectors such as automotive and IoT also bode well semiconductor equipment companies’ prospects.

On Aug 13, the group acquired a 70% stake in Starke Singapore.

“We estimate that the acquisition of Starke would provide the group with a good opportunity to secure cost savings, improve gross margins and enhance business and operational synergies through upstream integration of the supply chain of raw materials, and contribute about 1.5% of FY18F earnings,” says Tay.

As at 1.10pm, shares in UMS Holdings are trading 1 cent lower at 78 cents or 1.8 times FY18 book with a dividend yield of 7.6%.
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Comes as no surprise as Spore electronic NODX has been shrinking YOY for the most part of this year. (of course, we can also say such NODX figures predicts 9 out of the last 5 semiconductor ear markets).

Nvidia, Applied Materials forecasts add to evidence that chip bull run is ending

CARNAGE in chipmaking stocks continued on Thursday, as Nvidia Corp and Applied Materials Inc issued disappointing sales forecasts for the current quarter, adding to evidence that a half-decade long bull run for the US$400 billion industry is coming to a close.

Applied Materials, the world's largest maker of equipment used in semiconductor production, projected first-quarter revenue that trailed estimates. Chief executive officer Gary Dickerson said on an earnings call that weaker demand in the server, personal computer and mobile markets are making his customers less willing to invest in new production. The stock fell as much as 9.5 per cent in late trading.

https://www.businesstimes.com.sg/compani...-is-ending
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(19-11-2018, 08:30 AM)weijian Wrote: Comes as no surprise as Spore electronic NODX has been shrinking YOY for the most part of this year. (of course, we can also say such NODX figures predicts 9 out of the last 5 semiconductor ear markets).

Nvidia, Applied Materials forecasts add to evidence that chip bull run is ending

CARNAGE in chipmaking stocks continued on Thursday, as Nvidia Corp and Applied Materials Inc issued disappointing sales forecasts for the current quarter, adding to evidence that a half-decade long bull run for the US$400 billion industry is coming to a close.

Applied Materials, the world's largest maker of equipment used in semiconductor production, projected first-quarter revenue that trailed estimates. Chief executive officer Gary Dickerson said on an earnings call that weaker demand in the server, personal computer and mobile markets are making his customers less willing to invest in new production. The stock fell as much as 9.5 per cent in late trading.

https://www.businesstimes.com.sg/compani...-is-ending

After such a stellar year in China for AMAT with China ramping up production capacity, no surprise really that the big run up was going to end. With Chinese manufacturing PMI numbers flat and soon to be negative, global demand is probably tapering off as well.

Already the DRAM index i am tracking is down 20%+ since peaking in June. And with increase in Chinese manufacturing capacity, we might be looking at a oversupply situation soon. 

Trade war is not doing this sector any favors either. I expect in the coming year for UMS share price to downtrend to sub 40c levels again and maybe even 20c in a crisis situation, just wait for the start of next few quarters drop in earnings.

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Annual report out for UMS. Cash and Cash equivalent dropped by ~68%, as such this FY dividend is only 4.5 cents.

Personal opinion: Going forward, dividend amount may not recover for the next 1-2 years since we are experiencing a down cycle for Semicon right now. But with current price, still a good investment (vested)

“In view of the Group’s lower net cash position and to fund our expansion, we need to balance the Group’s dividend payments and financing options to ensure sustainable progress. In line with this, the Directors have proposed a final dividend of 2.0 Singapore cents per ordinary share (tax exempt one-tier) without any special dividend this year. This will bring UMS’ total dividend for FY2018 to 4.5 Singapore cents per ordinary share.”

“Going forward, the Group remains committed to reward its shareholders by reinstating the high payout ratio once the cash flow requirements of the business permits.”

https://links.sgx.com/1.0.0/corporate-an...YE2018.pdf


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