UMS Integration has issued its prospectus for the secondary listing on the main market of Bursa Malaysia Securities Berhad.

 

The secondary listing will be undertaken by way of introduction and will not involve any issuance or offering of shares. UMS shares will be fully fungible, where shareholders will be able to transfer their shares between the mainboard of the Singapore Exchange (SGX) and the main market of Bursa Securities for trading.

 

Following the issuance of the prospectus, UMS is scheduled to be listed on the Bursa on Aug 1.

 

The company, which is currently listed on the mainboard of the SGX with a market capitalization of about $970 million, reported earnings of $40.6 million for FY2024 ended Dec 31, 2024, down 32% y-o-y. For 2HFY2024, the company saw a 29% dip in earnings of $11.1 million.

 

Meanwhile, the group reported revenue for the full year of $242.1 million, down 19% y-o-y. For 2HFY2024, the group reported 9% lower earnings of $67.2 million.

 

UMS first announced the proposed secondary listing in a July 17 bourse filing. It said the move would broaden the company&rsquo s investor reach and widen its investor base, and potentially increase the liquidity of the company&rsquo s shares.

 

 

 

UMS Integration has received a receipt of approval from Bursa Malaysia Securities for the proposed secondary listing on the main market of Bursa Malaysia Securities.

 

This announcement comes after UMS received the approval from the Securities Commission Malaysia for the proposed secondary listing on the main market of Bursa Malaysia on March 24.

 

Following the approval from both the Securities Commission and Bursa Malaysia, a prospectus relating to the proposed secondary listing will be issued and made available, says UMS.

 

The mainboard listed semiconductor firm first announced the proposed secondary listing in a July 17 bourse filing. It said the move would broaden the company&rsquo s investor reach and widen its investor base, and potentially increase the liquidity of the company&rsquo s shares.

 

On Dec 31, UMS said that the proposed secondary listing does not involve any offering of shares.

 

UMS Integration held its IPO on the Singapore Exchange back in 2001, where it raised $51.6 million via a placement of 40 million new shares at $1.29 each. About a decade later, it attempted a dual listing in Korea to tap the semiconductor ecosystem there. But a non-Korean company ahead of UMS in the application was caught for fraud, and the dual listing eventually did not go through.

 

UMS Integration is on track to complete its Bursa dual-listing in late July and its valuation gap with its Malaysia-listed peers should narrow thereafter, according to UOB Kay Hian' s John Cheong in his June 11 note, where he has kept his ' buy' call and $1.32 target price.

 

Cheong notes that UMS, trading at 16x FY2026 earnings, is a discount of around 30% versus 23x fetched by its Malaysian peers, such as UWC and Sam Engineering.

 

Besides a lower valuation, UMS, giving a yield of 4%, is dishing out its dividends more frequently on a quarterly basis, which makes it more appealing to its peers.

 

" We also understand that the majority of the institutional funds in Malaysia have a mandate of investing only in Bursa-listed stocks.

 

" Moreover, UMS will engage the service of market makers at the initial phase to help enhance the liquidity of Malaysia-listed entity before more shares are being transferred from Singapore to Malaysia," adds Cheong.

 

The dual-listing aside, UMS is seeing healthy orders which gives it the confidence to maintain its revenue guidance of 10% growth q-o-q.

 

According to Cheong, a new customer for UMS is giving it a " strong order flow" as it diverts its US supply source to Asia.

 

In addition, the company' s capability to complete the majority of the manufacturing processes in-house such as plating, anodizing, brazing, welding, chemical cleaning will help to maintain healthy margins and achieve prompt delivery.

 

" UMS has not seen any impact from the US trade tariffs as semiconductors are exempted from the tariffs. UMS has several measures in resolving its labour issues including training foreign workers and enhancing its staff retention strategy," adds Cheong.

 

His target price of $1.32 is based on an unchanged PE-based valuation of 17.5x FY2026 earnings, which is pegged to 1SD above UMS&rsquo s historical mean PE to reflect the better production ramp-up from UMS&rsquo new customer and improvement in its earnings quality from new contributions from its new customer.

 

For Cheong, catalysts that might help the share price move include higher-than-expected factory utilisation rates return of orders for aircraft components to benefit its subsidiary JEP Holdings and better-than-expected cost management.