UMS

UMS: Announced weaker 3Q11 results, although bottom-line was still within estimates. Rev at $21.7m, -39% yoy and -33.7% qoq, while net profit at $7.3m, -3% yoy and +4.3% qoq. Co. has proposed an interim div of 1c / share, bringing cumulative div in 2011 to 3c / share. Earnings per share, on a fully diluted basis, rose to 6.38c for 9M11 vs 5.62c yoy.

Mgt however note that fundamentals remain despite weaker 3Q, with positive operating cash flow of $7.0m and cash conversion ratio of almost 94%, and more than doubling of cash position to $36m yoy, and has strategies in place to tackle cautious outlook include improving operating efficiencies and cost control.

We note that at current price, valuations are compelling, with grp trading at an annualized 4.6x FY11E P/E vs its historical average of 13x, while grp stands at a net cash position of $32.3m.