UMS

UMS: 2Q14 results were largely in-line with net profit at $7.2m (-8%) taking 1H14 net profit to $15.8m (+21%). For the quarter, revenue fell 13% to $28.7m, mainly due to lower revenue from the semiconductor Integrated System business, which forms up the bulk of the group’s revenue. Gross margins grew to 57% from 50% due to a shift in product mix, while bottom-line was also aided by a 46% decline in raw materials and subcontractor costs to $9.0m. Going forward, UMS guides that 3Q14 will be a period where customers’ demands are typically at the lowest, although the group is optimistic that demand should pick up towards 4Q14 and expects to be profitable for 2H14. The group cites further that SEMI, a global semiconductor trade association, predicts that 2014 is looking to be a year for spending growth, with the year-to-date equipment billings being on the right track for growth, with 2014 billings through April approaching 30% y/y growth. UMS has proposed a dividend of 1¢ per share for the quarter, maintaining it at the same level as the previous yr. UMS is currently in a net-cash position of $31.1m, representing 7.2¢ per share. At the current price, UMS trades at 8.7x forward P/E and a forward yield of 7.3%.