To The Moon

$UMS HOLDINGS LIMITED(558.SI)$  

Summary: upside potential in the mid term

1) Technicals (daily chart) 

20 days MA crossover against the 50 and 100 day MA suggest a potential end to the short term pessimism - picture 1

2) A Short fundamental writeup

Fundamentally, UMS possess excellent financial health (in terms of it's financial ratios). So much so that even after investing $50+ over mil of it's net profit (90+ mil in 2023) towards operations, UMS can still pay out 91% of it's free cash flow towards dividends. 

3) Short term outlook

As forecasted by $Gartner(IT)$, worldwide semiconductor revenues are expected to fall by 11% in 2023. 

At the same time, the outlook section in UMS's Annual Report points to near term economic headwinds. 

Together, these factors has served as a deadly combination, driving stock prices down ($1.3 in 30/1/23 to $0.89 in 15/5/23). 

Thus, for the first half of 2023, negative sentiments could have very well been priced in. 

In the second half of the year, emerging tchnical patterns, indicators and mid term factors should spur a recovery in stock prices.

4) Mid term outlook

Derisking & diversification should incentivise investment flows into the SEA region (besides US, EU and East Asia as other major hubs). We are already seeing major companies bidding for contracts in SEA, possibly to avoid sanctions. Case in point, production of electric vehicles in Thailand, Dyson factory in Singapore. 

Additionally, as forecasted by Gartner, the semicon industry is expected to recover in 2024. Should the same occur for the global economy, coupled with trends such as the wider adoption of Electrical Vehicles and of AI related technologies, all these factors should bring near term optimism to the supply chain side of the semicon industry - which has underperformed the stock market.

All in all, mid term factors can serve as an impetus for attracting institutional and common investors' attention.