Stock Name: UMS
Company Name: UMS HOLDINGS LIMITED
SIAS Research in a Nov 24 research report says: "UMS ended the quarter with cash, net of leases, of S$32.4m, which is equivalent to 9.43 cents per share. Net cash now accounts for 24.8% of UMS's market value.
"As UMS has no bank borrowings except for $3.56 million of finance leases, the company can lever its balance sheet to make acquisitions of decent size. While UMS may be setting aside cash for potential M&As, we expect the company to maintain its quarterly dividends as its cash conversion ratio remained high at 94% in 3Q 2011. In a nutshell, the company is paying dividends out of its cash flow, which is a sustainable policy.
"We have reduced our earnings forecast for FY2011 and revised our valuation downwards to 79 cents in view of the last two quarters' results. MAINTAIN INCREASE EXPOSURE."
Company Name: UMS HOLDINGS LIMITED
| Research House: SIAS | Price Call: BUY | Target Price: 0.79 |
SIAS Research in a Nov 24 research report says: "UMS ended the quarter with cash, net of leases, of S$32.4m, which is equivalent to 9.43 cents per share. Net cash now accounts for 24.8% of UMS's market value.
"As UMS has no bank borrowings except for $3.56 million of finance leases, the company can lever its balance sheet to make acquisitions of decent size. While UMS may be setting aside cash for potential M&As, we expect the company to maintain its quarterly dividends as its cash conversion ratio remained high at 94% in 3Q 2011. In a nutshell, the company is paying dividends out of its cash flow, which is a sustainable policy.
"We have reduced our earnings forecast for FY2011 and revised our valuation downwards to 79 cents in view of the last two quarters' results. MAINTAIN INCREASE EXPOSURE."
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