UMS chief executive Andy Luong at CIMB on Tuesday. Photo by Pearl Lam

UMS makes high precision components and performs complex electromechanical assembly and final testing services. The products it offers include modular and integration system for original semiconductor equipment manufacturers.

Andy Luong, who is a Vietnamese by birth, an American by citizenship and a Singapore Permanent Resident, owns 32% of UMS. Photo by Pearl Lam

Stanley Loh, Group Financial Controller of UMS. Photo by Pearl Lam

“We have lots of work. Q2 of next year is still good, Q3 also,” said Mr Luong.

UMS doesn’t have anything to write off, and no major capex in the coming quarters and coming year. “We invested US$40 million during the downturn, and now it’s payback time.”

With a strong operating cashflow, UMS has surprised by giving a 1-cent dividend during the 1H, and could surprise with another 1-cent payout after its 3Q, according to CIMB analyst William Tng in a report yesterday.

On the possibility of UMS seeking a dual listing, William Tng said that “given the shrinkage of the Singapore tech sector due to privatisation/delisting and Taiwan/Korea being the place where the semiconductor ecosystem is based, it would make sense for UMS to evaluate the merits of any possible dual listing in other countries.”

William wrote: "We maintain our BUY call with S$0.58 target price. At least till end 2H10, earnings momentum should remain strong and dividend surprises should limit downside."

Some highlights of the Q&A session between investors and UMS' Mr Luong and Group Financial Controller Stanley Loh:

Q: What is the percentage of your business comes from Applied Materials?

A: A lot. But it’s ok. If you go to Foxconn and ask how much of their business is from Apple, they will also say ‘A lot’.

Q: Do you see yourself doing ADRs or dual listing?

A: In the US, the relevant fees are expensive. We have not made any announcement yet, but we are looking at all options to enhance the valuation of the company.

This is something we agree: Singapore doesn’t have a focus on tech stocks but the Taiwan and Korea markets understand the cycles. It’s a good business.

Q: What’s the outlook for the semi-con cycle?

A: We have been in this business for over 21 years. You have V-shape and U-shape, we have seen a lot of V-shapes, but things are not the same as they used to be because of new gadgets such as the iPads and smartphones, etc. But we think the cycle is still good for at least three quarters.