• BUY Entry – 1.38 Target –1.51 Stop Loss – 1.31
  • Lagging behind peers. Shares of UMS have lagged that of its closest locally-listed peer in semiconductor-related manufacturing, with Frencken appreciating 23% over the last two weeks. UMS gained only 6% during the same period. 
  • Selling pressure likely over. The underperformance comes amid heavy selling last week by Andy Luong, the CEO/Chairman and major shareholder. Last week, Andy sold 21.4mn shares in the open market, bringing his stake down from 20.4% before the sale to 16.4% after the sale. However, we note that the selling has stopped this week, which is a positive sign. 
  • OUTPERFORM and TP of S$1.51. Given that fundamentals remain intact and that growth outlook is still positive, we maintain our Outperform rating and 12-month target price to S$1.51.

UMS vs FRENCKEN (1-month price comparison)

UMSH SP (Source: Bloomberg)