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UWC (5292)

FUTURE GEM


 

 

Introduction:

UWC Berhad specialises in delivering one-stop strategic solutions of high quality sheet metal fabrication thorough it subsidiaries, provides laser cutting and punching, bending, welding, CNC milling and turning, and painting services.

 

Business & Financial Highlights:

Source: UWC 2019 Annual Report

  • UWC business is doing well with annual revenue growth of 17.3% from year 2016 to 2019.
     
  • A key note is even UWC is expanding, it does not affect the company profit margin. The profit margin is improving & stood at 25.1%.
     
  • Gross margin of 41.6%, SUPER HIGH! (based on current quarter)
     
  • Strong financial position with current ratio of 3.9 & in net cash position. (based on current quarter)
     
  • Administrative & other expenses reduced 14.6% from previous quarter. (based on current quarter)
     
  • Super HIGH ROE of 26%.
     
  • Customers includes semiconductor, telecommunication, life science, automotive & others.
     
  • IPO utilization up to 80% to purchase new machinery & equipment and working capital for UWC future expansion.

 

Global Semiconductor Market

Source: https://www.semi.org/en/semiconductor-industry-2015-2025

Global Top-level Semiconductor market will be growing with CAGR of 6.7%, will contribute to UWC’s business growth.

 

Attractive Opportunities In the Life Science Analytics Market

Source: Life Science Analytics Market by Type

According to WHO data, there is a major shortage of hospital beds, healthcare providers & basic medical equipment. With the COVID-19 outbreak globally, expected to raise the dema nd for Life Science industry in the coming five years.

 

Automotive Vehicle-to-Everything (V2X) market by region, 2014-2025 (USD Million)

Source: https://www.grandviewresearch.com/industry-analysis/automotive-vehicle-to-everything-v2x-market

The automotive industry is growing at a steady rate has boosted automotive sales in recent years.

In conclusion, UWC’s metal fabrication supply to semiconductor, telecommunication, life science, automotive sectors that are forecast to be grow steadily in the future. UWC will advantage from these booming markets.

                                                                            

UWC Future Outlook & Potential

  • UWC received increased number of enquiries from existing & potential customers.
     
  • Semiconductor Equipment & Material International (SEMI) forecast:

Semiconductor test equipment to grow 13% in 2020

Wafer fab equipment to grow 13% in 2021

  • Booming of 5G will boost UWC’s business.
     
  • UWC has secured front-end semiconductor equipment customers.
     
  • UWC involved in manufacturing of COVID-19 equipment, life science industry will be the future catalyst of UWC.
    The demand continues to be robust in the next few years

     
  • UWC is expanding its business into new life science industry.
     
  • Semi-conductor, 5G telecommunication and life science industry will be UWC’s growth catalyst for the years to come.

 

Risk To Buy In UWC NOW:

  • High P/E valuation of 71x.
     
  • Stock price has increased significantly from IPO RM0.82 to RM7.50. (780%) 
     
  • Stock price will collapse if coming quarter earning result is not satisfactory.

     

Technical Perspective

The stock price stands strong above MA10 & 20 & consolidating in between RM7 to RM7.55.

Once breakout, the new uptrend will be established & the stock price will tend to move to higher level.