UWC Bhd’s FY2026 revenue came in ahead of expectations as stronger semiconductor demand, particularly from artificial intelligence-related applications, drove higher customer loadings and a sharp increase in its orderbook, according to Kenanga Research.
The group recorded FY2026 revenue of RM595 million, representing 104% of Kenanga’s full-year estimate and 106% of consensus forecasts.
Revenue jumped 54% year-on-year, driven mainly by a 95% increase in semiconductor-related sales, which more than offset a 39% decline in the life science and medical segments.
The stronger topline lifted profit before tax by 149% year-on-year, while net profit surged 131% to RM93.8 million, helped by better operating leverage from higher production volumes.
Kenanga said UWC’s outstanding orderbook rose 30% quarter-on-quarter to RM350 million from RM270 million, supported by a record RM267 million of new orders secured during the quarter.
The research house said the stronger orderbook provides improved earnings visibility, with room for core earnings to catch up as semiconductor loadings across both front-end and back-end customers continue to ramp.
For the fourth quarter, revenue increased 23% quarter-on-quarter to RM186 million, supported by a 15% increase in semiconductor contributions and 16% growth from the life science and medical segment.
Profit before tax rose 49% quarter-on-quarter to RM43.7 million, while net profit increased 43% to RM37.6 million, helped by lower operating expenses and reduced raw material and consumables costs despite higher revenue.
No dividend was declared for the quarter.
Kenanga expects semiconductors to remain the main growth driver for UWC, supported by stronger exposure to both front-end wafer fabrication equipment and back-end test equipment.
On the front-end, the research house expects the wafer fabrication equipment cycle to remain supportive into 2027, citing capacity expansion plans by major industry players including TSMC, Samsung and SK Hynix, as well as SpaceX’s Terafab initiative.
Kenanga said TSMC could increase capital expenditure further next year, while Samsung and SK Hynix have started bringing forward parts of their memory investment plans amid improved demand visibility.
On the back-end, growth from UWC’s new manipulator programme is expected to normalise following rapid expansion, although rising testing intensity for increasingly complex AI chips could provide another earnings catalyst.
UWC is also expanding production capacity and commencing new clean-room construction to support higher demand from front-end semiconductor customers.
Kenanga maintained its FY2027 earnings forecast and introduced estimates for FY2028, saying margins could improve as new front-end customers ramp up and economies of scale strengthen.
The research house raised its target price to RM7.83, from rolling its valuation base forward to CY2027, based on an unchanged 45 times price-to-earnings multiple, and maintained its Outperform call.
Kenanga said the premium valuation reflects UWC’s exposure to sustained AI-related wafer fabrication spending, higher back-end testing requirements and its established engineering capabilities across the semiconductor value chain.
