Excerpt from CGS International report.
Report Summary
- Stock: UMS Integration Ltd (UMSH SP)
- Action: Add (Buy)
- Target Price: S\$2.23 (up from S\$1.88)
- Current Price: S\$1.79
- Upside: 24.6%
- Key Idea: UMS is entering a stronger earnings upcycle for FY26-28F, driven by surging AI demand and contributions from two major customers (A and L). The company recently renewed a key three-year contract and is winning new business, with orders expected to be skewed to the second half of FY26. UMS is projected to deliver a strong 29.6% EPS CAGR over FY25-28F.
- Earnings Highlights: 1Q26F net profit is expected at S\$12.2m (+10% qoq, +24% yoy). FY26-28F revenue and EPS forecasts have been raised (EPS up 2.7-27.6%).
- Valuation: Target price based on 26x FY27F P/E, 2 standard deviations above 5-year average, reflecting structural growth and improved investor interest after its secondary listing on Bursa.
- Key Catalysts: More customer wins (especially for the new Penang plant), return of aircraft component orders, and continued AI-driven demand.
- Risks: Loss of sales from key customer in China, or slower-than-expected ramp-up with new customers.
above is an excerpt from a report by CGS International. Clients of CGS International can be the first to access the full report from the CGS International website : https://www.cgs-cimb.com
