Broker: UOB Kay Hian
Date of Report: 16 July 2025
UMS Integration: Target Price Raised as Dual Listing and New Orders Drive Multi-Faceted Growth
UMS Integration Ltd: Positioned for Strong Growth and Valuation Re-Rating
Ticker: UMSH SP
Sector: Information Technology
Share Price (as of report): S\$1.39
New Target Price: S\$1.73 (Up 31%)
Upside: +24.5%
Market Cap: S\$987.6m (US\$771m)
Analyst: John Cheong
Key Investment Thesis: Multiple Catalysts to Unlock Value
- Robust Revenue Growth: UMS Integration is on track to deliver double-digit revenue growth for 2Q25, driven by healthy order momentum from both new and existing key customers. The company expects to meet its 2Q25 earnings estimate of S\$11m, reflecting a 12% year-on-year and quarter-on-quarter increase.
- Resolution of Supply Chain Disruptions: After overcoming supply disruption issues in 1Q25, UMS anticipates revenue for its integration system will catch up with targets in 2Q25.
- Strong Margins and Delivery Capabilities: UMS’s ability to complete critical manufacturing processes in-house—such as plating, anodising, brazing, welding, and chemical cleaning—supports healthy margins and prompt customer deliveries.
- Dual Listing on Bursa Malaysia: UMS’s upcoming secondary listing (effective 1 Aug 2025) has generated strong investor interest. The company aims to narrow its current ~25% valuation discount compared to Malaysian peers, leveraging increased institutional participation and higher liquidity via market makers in the early phase.
- Enhanced Market Engagement: UMS is ramping up its presence in the Malaysian investment community through non-deal roadshows, plant visits, investor seminars, media campaigns, and social media influencer outreach.
Financial Highlights and Forecasts
| Year (S\$m) |
2023 |
2024 |
2025F |
2026F |
2027F |
| Net Turnover |
300 |
242 |
267 |
296 |
329 |
| EBITDA |
87 |
65 |
80 |
90 |
99 |
| Operating Profit |
69 |
46 |
54 |
60 |
68 |
| Net Profit (adj.) |
60 |
41 |
47 |
54 |
61 |
| EPS (S\$ cent) |
8.5 |
5.8 |
6.7 |
7.5 |
8.6 |
| PE (x) |
16.4 |
24.1 |
20.9 |
18.5 |
16.2 |
| P/B (x) |
2.7 |
2.4 |
2.3 |
2.2 |
2.1 |
| EV/EBITDA (x) |
10.8 |
14.4 |
11.7 |
10.5 |
9.4 |
| Dividend Yield (%) |
4.0 |
3.7 |
3.6 |
3.6 |
3.6 |
| Net Margin (%) |
20.1 |
16.9 |
17.7 |
18.1 |
18.5 |
Net Cash/Share (2025F): S\$0.11
FY25 NAV/Share: S\$0.61
ROE (2025F): 11.2%
Industry Tailwinds: Semiconductor and Aviation Sector Insights
- Global Semiconductor Fab Equipment Spending: Anticipated to rise by 2% in 2025 to US\$110 billion, marking the sixth consecutive year of growth. Spending is expected to accelerate by 18% in 2026, reaching US\$130 billion, fueled by high-performance computing, data center expansion, and increased AI integration driving up silicon content for edge devices. Around 50 new fabs are forecast to come online between 2025 and 2026.
- Aviation Sector: The International Air Transport Association (IATA) projects global air travelers to surpass 5 billion in 2025, with industry revenue topping US\$1 trillion for the first time. However, the impact of new US tariffs could dampen recovery, as slower economic growth may reduce both passenger and freight demand over time.
Valuation and Recommendation
- BUY Rating Maintained: Target price upgraded by 31% to S\$1.73, based on a higher PE multiple of 23x 2026F EPS (previously 17.5x), reflecting a valuation re-rating from the dual listing and new business contributions.
- Peer Comparison: UMS is trading at a 2026 PE of 18.5x, representing an 8% discount to Malaysian peers (average PE of 25x). UMS also offers a more attractive dividend yield (3.6%) and net margin relative to peers.
- Potential Catalysts:
- Higher-than-expected factory utilization rates
- Resumption of orders for aircraft components, benefiting subsidiary JEP Holdings
- Improved cost management
Peer Company Analysis: Regional and Global Comparisons
| Company |
Ticker |
Market Cap (US\$m) |
PE 2025F |
PE 2026F |
P/B 2025F |
P/B 2026F |
EV/EBITDA 2025F |
EV/EBITDA 2026F |
ROE 2025F (%) |
Yield 2025F (%) |
| AEM |
AEM SP |
372 |
20.6 |
18.9 |
0.9 |
0.9 |
11.1 |
10.6 |
4.6 |
1.2 |
| Venture |
VMS SP |
2,740 |
15.5 |
15.0 |
1.2 |
1.2 |
8.4 |
8.1 |
7.8 |
6.1 |
| Frencken |
FRKN SP |
464 |
14.9 |
14.1 |
1.3 |
1.2 |
7.4 |
6.9 |
8.9 |
2.0 |
| UWC |
UWC MK |
562 |
45.0 |
24.0 |
4.9 |
4.2 |
25.7 |
15.5 |
11.2 |
0.3 |
| Sam Engineering |
SEQB MK |
643 |
26.9 |
22.4 |
1.8 |
1.7 |
12.3 |
11.2 |
7.0 |
0.8 |
| Coraza Integrated |
CORAZA MK |
58 |
19.8 |
17.1 |
1.7 |
1.4 |
7.5 |
6.4 |
8.6 |
0.0 |
| Greatech |
GREATEC MK |
1,043 |
23.5 |
21.0 |
4.0 |
3.2 |
17.7 |
15.7 |
19.1 |
0.0 |
| Inari Amertron |
INRI MK |
1,840 |
29.0 |
24.2 |
2.7 |
2.7 |
16.5 |
14.1 |
9.4 |
3.2 |
| Pentamaster |
PENT MK |
582 |
33.0 |
27.3 |
3.1 |
2.9 |
18.6 |
15.8 |
9.7 |
0.6 |
| Vitrox |
VITRO MK |
1,634 |
53.8 |
40.2 |
6.3 |
5.8 |
44.0 |
33.1 |
12.1 |
0.5 |
| UMS Integration |
UMSH SP |
771 |
20.9 |
18.5 |
2.3 |
2.2 |
11.7 |
10.5 |
11.2 |
3.6 |
Singapore Peers Average: PE 16.0x (2026F), Dividend Yield 3.1%
Malaysia Peers Average: PE 24.8x (2026F), Dividend Yield 0.8%
Global Peers Average: PE 23.1x (2026F), Dividend Yield 1.1%
Detailed Financials: Profit & Loss, Balance Sheet, and Cash Flow
Profit & Loss (S\$m)
- Net Turnover: 2024: 242.1 | 2025F: 267.1 | 2026F: 296.4 | 2027F: 329.0
- EBITDA: 2024: 65.3 | 2025F: 80.4 | 2026F: 89.6 | 2027F: 99.4
- EBIT: 2024: 45.5 | 2025F: 53.5 | 2026F: 60.5 | 2027F: 68.5
- Net Profit: 2024: 40.9 | 2025F: 47.3 | 2026F: 53.5 | 2027F: 60.9
Balance Sheet (S\$m)
- Total Assets: 2024: 509.0 | 2025F: 540.4 | 2026F: 562.7 | 2027F: 594.7
- Shareholders’ Equity: 2024: 418.2 | 2025F: 430.2 | 2026F: 448.2 | 2027F: 473.6
- Cash/ST Investment: 2024: 79.9 | 2025F: 97.4 | 2026F: 104.6 | 2027F: 123.3
Cash Flow (S\$m)
- Operating Cash Flow: 2024: 56.4 | 2025F: 62.1 | 2026F: 71.8 | 2027F: 76.7
- Investing Cash Flow: 2024: (28.8) | 2025F: (30.0) | 2026F: (25.0) | 2027F: (20.0)
- Financing Cash Flow: 2024: (16.2) | 2025F: (13.5) | 2026F: (38.1) | 2027F: (36.4)
- Ending Cash & Cash Equivalent: 2024: 79.9 | 2025F: 97.4 | 2026F: 104.6 | 2027F: 123.3
Key Performance Metrics
- EBITDA Margin (%): 2024: 27.0 | 2025F: 30.1 | 2026F: 30.2 | 2027F: 30.2
- Pre-tax Margin (%): 2024: 19.4 | 2025F: 20.2 | 2026F: 20.5 | 2027F: 21.0
- Net Margin (%): 2024: 16.9 | 2025F: 17.7 | 2026F: 18.1 | 2027F: 18.5
- ROE (%): 2024: 10.5 | 2025F: 11.2 | 2026F: 12.2 | 2027F: 13.2
- Turnover Growth (%): 2024: (19.3) | 2025F: 10.3 | 2026F: 11.0 | 2027F: 11.0
- Net Profit Growth (%): 2024: (32.1) | 2025F: 15.6 | 2026F: 13.1 | 2027F: 13.9
- Debt to Equity (%): 2024: 0.2 | 2025F: 5.2 | 2026F: 4.3 | 2027F: 3.8
- Net Debt/(Cash) to Equity (%): 2024: (18.9) | 2025F: (17.4) | 2026F: (19.0) | 2027F: (22.3)
Conclusion: UMS Integration Set for a Positive Rerating
UMS Integration’s combination of robust operational execution, successful mitigation of supply chain issues, growing order book, and strategic dual-listing initiative positions it as a standout in the precision engineering and semiconductor equipment space. With a higher target price reflecting greater confidence in earnings visibility and an expected valuation catch-up to Malaysian peers, UMS presents a compelling case for investors seeking both growth and yield in the technology sector. Key share price catalysts include higher utilisation, recovery in aviation-related orders, and continued cost discipline.
