UMS: CIMB deem UMS's 1Q15 core net profit, at 24% of its full-year estimates, to be in line with historical trends. Earnings benefited from the stronger US$. The usual first quarter 1¢ DPS was declared.
UMS expects its business to “remain stable in the coming quarters” and that “2015 will continue to be a profitable year”.
CIMB believes UMS is once again on track for y/y earnings recovery in 2H, hence its upgrade to Add (TP $0.63). Re-rating catalysts are earnings momentum, M&A and new customers.
At the current share price, the highly sustainable 5¢ base case DPS (9.8% yield in FY15-17) with limited downside supports its upgrade. A key risk is further share sale by major shareholder.
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