UWC Berhad (UWC MK)






UWC Berhad: Seeing all-round improvement


P PhillipCapital
UWC UPDATE
25 July 2025

UWC Berhad (UWC MK)

Seeing all-round improvement

MALAYSIA | TECHNOLOGY | UPDATE

  • Stronger front-end outlook driven by better yields and expanding capabilities
  • Back-end and life science segments face policy risk, but upside seen from new models and customer relocation
  • Maintain BUY with an unchanged TP of RM2.60

FE activities gaining momentum

UWC’s front-end outlook remains positive, supported by rising yields, expanding capabilities, and firm demand. Management shared that production yield has improved to c.65% (from 60% in 3QFY25) and is now sustainable without external consultancy support, which previously cost US$1m/quarter (RM4.2m at US$1:RM4.20). The cost savings are expected to be reflected from 1QFY26 onwards. The group recently added four 5-axis CNC machines to enhance its fabrication capabilities, allowing to meet more complex FE requirements. Overall demand remains healthy, with increased loading expected over the next 2 months. Its largest FE customer is projected to contribute 30-35% of group revenue and remain the key growth driver in FY26. The ground floor of Building 6 is currently occupied for chamber production, with the customer expected to fully take up the entire facility.

New models and customer relocation could drive a better BE outlook

Tariff risks weigh more heavily on the BE segment, given its 20% exports exposure to the US, which has led to delivery deferrals amid ongoing trade discussions. While the outlook from its largest BE customer remains subdued, the anticipated relocation of operations is expected to spur incremental demand from higher test requirements. Separately, UWC’s weekly test handler orders from another customer have increased from 6 units in Apr25 to 8 units in Jul25, with management expecting new model introductions to further lift volumes to 10-12 units over the next 2 months. We expect the incremental revenue contributions to materialise in 1HFY26, with both BE customers accounting for a combined 30% of the total group’s revenue in FY26.

Maintain BUY and TP of RM2.60

We maintain our earnings forecast, BUY rating, and 12-month TP of RM2.60, based on a target PE multiple on FY26E EPS. We remain optimistic on the group’s prospects in tandem with improved execution, deeper technical capabilities, and robust order flows. Key downside risks: prolonged semiconductor sector downturn, continued order delay by its key customers, weaker US$ against RM, and softer-than-expected margins.

Chart: PRICE VS. FBMKLCI

This chart shows the stock price performance of UWC MK EQUITY against the FBMKLCI Index from July 2024 to July 2025. The UWC stock shows significant volatility, with a low around 1.5 and a high near 3.0, ending the period higher than it started. The FBMKLCI index shows a more stable, slightly upward trend over the same period.

Source: Bloomberg

Jianyuan TAN, FCCA

tan.jianyuan@phillipcapital.com.my

Jin Wei LAM

lam.jinwei@phillipcapital.com.my

Key Financials

Y/E Jul FY23 FY24 FY25E FY26E FY27E
Revenue (RMm) 271.7 248.7 353.1 388.5 427.3
EBITDA (RMm) 83.2 36.9 82.8 145.1 172.3
Pretax profit (RMm) 67.9 19.3 59.8 116.3 139.8
Net profit (RMm) 55.0 15.2 46.0 89.6 107.6
EPS (sen) 5.0 1.4 4.2 8.1 9.8
PER (x) 37.9 136.7 45.2 23.3 19.3
Core net profit (RMm) 54.7 15.2 46.0 89.6 107.6
Core EPS (sen) 5.0 1.4 4.2 8.1 9.8
Core EPS growth (%) (45.6) (72.2) 202.1 94.6 20.2
Core PER (x) 38.1 136.7 45.2 23.3 19.3
Net DPS (sen) 1.6 2.0
Dividend Yield (%) 0.9 1.0
EV/EBITDA (x) 23.9 57.9 24.7 13.7 11.2
Chg in EPS (%)
Phillip/Consensus (%) 0.9 1.1 1.0

Sources: Company, Bloomberg, Phillip Research forecasts

Supporting Charts & Data

Table 1: Segmental revenue (RMm)

Quarter Semiconductor Life science and medical technology Others Total
4QFY23 20.6 14.2 5.2 40.0
1QFY24 23.4 14.4 7.6 45.4
2QFY24 28.1 17.1 15.9 61.1
3QFY24 30.0 17.9 18.1 66.0
4QFY24 37.4 19.6 19.1 76.1
1QFY25 50.2 20.2 19.0 89.4
2QFY25 53.1 21.2 18.1 92.4
3QFY25 59.9 18.4 17.3 95.6

Source: Company, Phillip Research

Table 2: Quarterly core net profit (RMm) and margin (%)

Quarter Core Net Profit (RMm) Core Net Margin (%)
4QFY23 (0.0) 1.7
1QFY24 2.7 4.5
2QFY24 4.1 3.8
3QFY24 6.7 7.3
4QFY24 8.8 8.8
1QFY25 11.2 9.8
2QFY25 13.0 12.1
3QFY25 13.6 12.1

Source: Company, Phillip Research

Table 3: UWC’s 5-year PE (x)

The 5-year Price-to-Earnings (PE) ratio chart indicates significant fluctuation. The key statistical levels are:

  • +2SD: 179x
  • +1SD: 130.6x
  • Average: 82.2x
  • -1SD: 33.7x
  • -2SD: -14.7x

Source: Company, Phillip Research forecasts

Financials

Income Statement

Y/E Jul (RMm) FY23 FY24 FY25E FY26E FY27E
Revenue 272 249 353 388 427
Operating expenses (189) (212) (270) (243) (255)
EBITDA 83 37 83 145 172
Depreciation (18) (21) (25) (30) (36)
EBIT 65 16 57 115 136
Net int income/(expense) 3 4 2 2 4
Exceptional gains / (losses) 0 (0) 0 0 0
Associates’ contribution 0 0 0 0 0
Pretax profit 68 19 60 116 140
Tax (14) (6) (15) (29) (35)
Minority interest 1 2 1 2 3
Net profit 55 15 46 90 108
Core net profit 55 15 46 90 108

Balance sheet

Y/E Jul (RMm) FY23 FY24 FY25E FY26E FY27E
Fixed assets 127 147 182 218 250
Other long term assets 48 53 56 59 63
Total non-current assets 176 199 238 277 313
Cash and equivalents 96 81 69 122 178
Stocks 63 67 86 66 73
Debtors 75 106 145 160 176
Other current assets 54 61 52 52 52
Total current assets 288 314 352 399 478
Creditors 26 39 35 27 30
Short term borrowings 0 0 8 8 8
Other current liabilities 2 2 6 6 7
Total current liabilities 28 41 49 41 44
Long term borrowings 1 0 0 0 0
Other long term liabilities 13 19 41 43 45
Total long term liab. 14 19 41 43 45
Shareholders’ Funds 420 435 481 571 679
Minority Interest 2 18 19 21 24

Cash Flow Statement

Y/E Jul (RMm) FY23 FY24 FY25E FY26E FY27E
Pretax Profit 68 19 60 116 140
Depreciation & amortisation 18 21 25 30 35
Working capital changes 47 (27) (42) (2) (20)
Cash tax paid (34) (22) (15) (29) (35)
Others 37 14 (11) 5 36
C/F from operation 136 5 17 121 156
Capex (31) (32) (64) (69) (71)
Others (15) 14 7 1 (10)
C/F from investing (46) (17) (57) (68) (82)
Debt raised/(repaid) (0) (1) 8 0 0
Dividends paid (32) 0 0 0 (18)
Others (2) (0) 20 (0) (0)
C/F from financing (34) (1) 28 (0) (18)
Net change in cash flow 56 (14) (12) 52 56
Free Cash Flow 105 (27) (47) 51 85

Source: Company, Phillip Research forecasts

Contact Information

SINGAPORE

Phillip Securities Pte Ltd
Raffles City Tower
250, North Bridge Road #06-00
Singapore 179101
Tel +65 6533 6001
Fax +65 6535 6631
Website: www.poems.com.sg

MALAYSIA

Phillip Capital Sdn Bhd
B-18-6 Block B Level 18 Unit 6 Megan Avenue II,
No. 12, Jalan Yap Kwan Seng, 50450 Kuala Lumpur
Tel +603 2783 0300
Fax +603 2166 5099
Website: www.phillip.com.my

HONG KONG

Phillip Securities (HK) Ltd
11/F United Centre 95 Queensway
Hong Kong
Tel +852 2277 6600
Fax +852 2868 5307
Website: www.phillip.com.hk

JAPAN

Phillip Securities Japan, Ltd.
4-2 Nihonbashi Kabuto-cho Chuo-ku,
Tokyo 103-0026
Tel +81-3 3666 2101
Fax +81-3 3666 6090
Website: www.phillip.co.jp

INDONESIA

PT Phillip Securities Indonesia
ANZ Tower Level 23B,
Jl Jend Sudirman Kav 33A
Jakarta 10220 – Indonesia
Tel +62-21 5790 0800
Fax +62-21 5790 0809
Website: www.phillip.co.id

CHINA

Phillip Financial Advisory (Shanghai) Co Ltd
No 550 Yan An East Road,
Ocean Tower Unit 2318,
Postal code 200001
Tel +86-21 5169 9200
Fax +86-21 6351 2940
Website: www.phillip.com.cn

THAILAND

Phillip Securities (Thailand) Public Co. Ltd
15th Floor, Vorawat Building,
849 Silom Road, Silom, Bangrak,
Bangkok 10500 Thailand
Tel +66-2 6351700 / 22680999
Fax +66-2 22680921
Website www.phillip.co.th

FRANCE

King & Shaxson Capital Limited
3rd Floor, 35 Rue de la Bienfaisance 75008
Paris France
Tel +33-1 45633100
Fax +33-1 45636017
Website: www.kingandshaxson.com

UNITED KINGDOM

King & Shaxson Capital Limited
6th Floor, Candlewick House,
120 Cannon Street,
London, EC4N 6AS
Tel +44-20 7426 5950
Fax +44-20 7626 1757
Website: www.kingandshaxson.com

UNITED STATES

Phillip Capital Inc
141 W Jackson Blvd Ste 3050
The Chicago Board of Trade Building
Chicago, IL 60604 USA
Tel +1-312 356 9000
Fax +1-312 356 9005
Website: www.phillipusa.com

AUSTRALIA

Phillip Capital Limited
Level 10, 330 Collins Street
Melbourne, Victoria 3000, Australia
Tel +61-03 8633 9803
Fax +61-03 8633 9899
Website: www.phillipcapital.com.au

CAMBODIA

Phillip Bank Plc
Ground Floor of B-Office Centre, #61-64,
Norodom Blvd Corner Street 306, Sangkat
Boeung Keng Kang 1, Khan Chamkamorn,
Phnom Penh, Cambodia
Tel: 855 (0) 7796 6151/855 (0) 1620 0769
Website: www.phillipbank.com.kh

INDIA

PhillipCapital (India) Private Limited
No.1, 18th Floor, Urmi Estate
95, Ganpatrao Kadam Marg
Lower Parel West, Mumbai 400-013
Maharashtra, India
Tel:+91-22-2300 2999/Fax:+91-22-2300 2969
Website: www.phillipcapital.in

TURKEY

PhillipCapital Menkul Degerler
Dr. Cemil Bengü Cad. Hak Is Merkezi
No. 2 Kat. 6A Caglayan
34403 Istanbul, Turkey
Tel: 0212 296 84 84
Fax: 0212 233 69 29
Website: www.phillipcapital.com.tr

DUBAI

Phillip Futures DMCC
Member of the Dubai Gold and
Commodities Exchange (DGCX)
Unit No 601, Plot No 58, White Crown Bldg,
Sheikh Zayed Road, P.O.Box 212291
Dubai-UAE
Tel: +971-4-3325052 / Fax: + 971-4-3328895

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