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DBS maintains 'buy' and $2.92 target price on UMS Integration; shares surge near 14%

The Edge Singapore
The Edge Singapore • 2 min read
DBS maintains 'buy' and $2.92 target price on UMS Integration; shares surge near 14%
UMS Integration, led by chairman Andy Luong, plans to maintain its 1Q dividend at one cent / Photo: Samuel Isaac Chua
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Ling Lee Keng of DBS Group Research has kept her "buy" call and E$2.92 target price on UMS Integration after AI-led semiconductor demand and disciplined cost control drove a broad-based earnings uplift for the company.

In its most recent quarter ended March, UMS, led by executive chairman Andy Luong, reported earnings of $14 million, up 42.5% y-o-y, on the back of a 20.4% jump in revenue to $69.4 million.

The company was able to grow it revenue from its semiconductor business by 21% y-o-y but its other key segment aerospace was up 18% as well.

UMW was able to improve its gross margin to 52.6% from 49.6% in 4QFY2025. Net margin, meanwhile, was up to 20.2% from 16.5% in the preceding 4QFY2025, thanks to operating leverage and favourable currency movements.

The company, rare among local listcos to pay dividends quarterly, plans to maintain the latest payout at 1 cent per share.

Ling, in her May 12 note, suggests that the company's prospects for the whole of FY2026 is "brighter", with "robust" order forecasts provided by UMS's customers, in turn underpinned by "sustained" AI-driven demand.

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In semiconductors, the main key customer is expected to grow its equipment business by more than 20% in 2026, while the new key customer continues to divert US supply sourcing to Asia, supporting strong component order flow, says Ling.

New product introductions (NPI) qualifications could further lift component revenue as programmes transition into volume production, she adds.

Semiconductor aside, aerospace is the second growth pillar of the company. Resilient global aviation demand, rising aircraft orders and a record industry backlog, should sustain demand for precision parts.

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Ling expects the company to record a 42% jump in earnings for the current FY2026, and a further 25% in the coming FY2027.

For Ling, UMS remains her top pick in the semiconductor space, supported by strong customer-driven momentum and leveraged exposure to advanced packaging.

UMS Integration shares jumped by 13.98% as at 2.08 pm to trade at $2.69, extending a gain of 133.91% year to date.

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