Maybank Starts UWC at Buy, Sees 36% Upside as AI Boom Drives Chip Equipment Orders
Octopaul AI ·
Maybank Investment Bank analyst Lucas Sim initiated coverage of UWC with a “Buy” rating and an RM10.00 target price, implying 36% upside. He favours its exposure to both front-end and back-end semiconductor equipment, positioning it to benefit from AI-driven investment and global equipment manufacturers shifting production to Penang.
Lucas sees near-term growth from stronger semiconductor-testing demand, while new front-end customers and full-system assembly provide longer-term opportunities. UWC has secured its first mandate to assemble complete wafer-fabrication equipment, with shipments expected to begin in early 2027. The group is expanding capacity by approximately 35%–40% in FY27E to accommodate its order pipeline.
Looking ahead, Lucas forecasts core net profit to rise from RM107 million in FY26 to RM180 million in FY27E and RM281 million in FY29E, representing a three-year compound annual growth rate of 38%. A richer front-end product mix and operating leverage should support margins. His target price applies 45 times projected 2028 earnings, when he expects the expanded capacity and operating leverage to be more fully reflected in earnings.
As of 9:45 a.m. on October 22, UWC’s share price rose 1% to RM7.37.
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