But AMAT is a major customer of UMS, but UMS price today went south instead. Very curious, any clue? 

 

Maybank Securities analyst Jarick Seet has upgraded UMS Holdings to &ldquo buy&rdquo after the company reported record revenue and profits for the 3QFY2022 and 9MFY2022 ended Sept 30.

 

UMS Holdings released its results on Nov 11.

 

According to Seet&rsquo s estimates, UMS&rsquo s revenue and patmi for the quarter exceeded his expectations while the company&rsquo s 9MFY2022 patmi stood at 88% of his FY2022 revenue estimates.

 

In his report on Nov 14, Seet explained that his upgrade comes on the back of UMS&rsquo s &ldquo more secure outlook&rdquo , with management&rsquo s six-month outlook remaining &ldquo robust&rdquo from the large order backlog from its key customer.

 

Management added that the &ldquo slightly lower forecast&rdquo given by its key customer recently is unlikely to significantly impact its performance, the analyst adds.

 

As a result, Seet is expecting UMS to report a &ldquo strong&rdquo 4QFY2022 and a &ldquo better&rdquo FY2023. On this, he has upped his patmi estimates by 13.4% for FY2022 and 13.8% for FY2023.

 

See also: UMS reports record revenue and profits for 9MFY22, declares third dividend of 1 cent per share

 

The higher estimates have led to a higher target price of $1.34 from $1.20 before, although pegged to a lower FY2023 P/E of 8.0x from 8.5x before.

 

The lower P/E was made in a bid to be &ldquo conservative&rdquo due to the &ldquo challenging macro sector outlook&rdquo , says Seet.

 

Based on his estimates, UMS&rsquo s valuation remains attractive at an FY2023 P/E of 6.4x.