Tng not only expects UMS to report a stronger 2HFY2026 (due to customer order skewed towards the second-half of the year), he thinks that there is a possibility for UMS to report a 1QFY2026 net profit of around $12.2 million, representing a 10% q-o-q and 24% y-o-y increase.
The way Tng sees it, UMS is likely to enjoy a stronger FY2026 to FY2028 earnings upcycle, driven by AI demand and two customers. He notes that from the company’s FY2025 annual report, released on April 13, UMS has renewed a three-year integrated system contract with major customer “A”. Coupled with new product pipelines from “A” and new customer “L”, management is confident in the company’s FY2026 performance.
UMS’s confidence in its prospects are derived from expected customer demand and industry tailwinds. The company notes that both customers have forecasted “robust” demand growth for 2026 and 2027 due to increasing AI adoption. UMS also points out that both “A” and “L” are major players in the high-bandwidth memory and advanced logic space, which is experiencing “escalating” demand.
In addition, UMS expects the semiconductor industry to enter a record period of growth, surpassing US$1 trillion in revenue for the first time in 2026. The company also cites industry estimates that global sales of semiconductor manufacturing equipment will grow from 2025 to 2027 and reach a record high of U$156 billion, signaling a clear shift away from traditional consumer driven cycles toward a new “Giga Cycle” in which major tech companies are investing heavily to compete in the AI era.
On the back of expected business growth driven by industry tailwinds and more customer orders, Tng raises his FY2026 to FY2028 projected revenue by 0.2-12.7%, leading to 2.7-27.6% increase in earnings per share that will experience a 29.6% compound annual growth rate from FY2025 to FY2028. Valuing the company at 26 times of FY2027 forecasted EPS, or two standard deviations above five-year (2022 to 2026) P/E, Tng sets a target price of $2.23.
