Company Updates

UMS Holdings

Recently, UMS Holdings has declared a bonus issue of 1 share for every 4 held. Given the company’s progress and how the economy has been improving, I would be holding onto UMS and receiving the bonus shares. Hopefully, the company will be able to continue distributing dividends of 5c per share, which translates to SGD 21.5 million. This is possible given its net cash generated from operating activities over the past few years. However, we have to take note that in recent years, the CAPEX has been pretty low, given how much the company has spent on CAPEX previously. Hence, with CAPEX increasing, it may be slightly harder for the company to maintain a 5c per share dividend. However, I would continue observing the earnings of the company, especially with Applied Materials having stronger growth in sales, UMS Holdings would benefit from this as well. With the share price running up to SGD 0.80 from the initial purchase at SGD 0.50, I would start analysing the fair value for UMS Holdings.

New Toyo

Recently, the ex-CEO Gary Yen would be stepping down. With Father and Son no longer managing the company, they have elected David Lim an expert at M&A to be the next CEO. Furthermore, there has been speculations that the family’s 52% stake in the company is up for sale. Given the expertise of the new CEO, perhaps there may be some truth in the speculations? Furthermore, looking at New Toyo of late, the trade volumes have been increasing and today closed at SGD 0.32.

Disclosure: The author is long UMS Holdings, New Toyo