UOB Kay Hian analyst John Cheong maintained a Buy rating on UMS Holdings (UMSSF – Research Report) today and set a price target of S$1.32.
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John Cheong has given his Buy rating due to a combination of factors including UMS Holdings’ positive financial performance and strategic positioning. The company reported a 7% increase in revenue for the first quarter of 2025, driven by a significant boost in sales in Malaysia, which surged by 287% as a result of a new key customer shifting its supply chain from the US to Asia. This strategic move is expected to benefit UMS amidst the ongoing trade tensions, as the semiconductor industry remains tariff-exempt.
Furthermore, UMS Holdings has managed to maintain a strong gross margin, which increased to 56% from 53% in the previous year, thanks to a favorable change in product mix towards higher-margin semiconductor components. Despite a forex loss impacting earnings, the company’s outlook remains optimistic with strong order flows from its new customer, supporting the decision to maintain a Buy rating with a 9% higher target price of S$1.32.
In another report released today, DBS also maintained a Buy rating on the stock with a S$1.38 price target.