Chip stocks: UMS pares morning gains despite Q2 profit surge, AEM reverses into drop
UMS shares pare an 8.2% gain to be flat at midday while AEM is down 4.4%
Shares of UMS Integration soared nearly 8.2% in early trading on Friday (August 14) following the group's announcement of an 89% jump in net profit for the second quarter. UMS reported a S$19.4 million profit for Q2, a stark contrast to S$10.3 million the previous year. Revenue for the three months ending June 30 increased 29% to S$87.1 million.
UMS CEO Andy Luong credited the "strong artificial intelligence super-cycle and sustained aviation boom worldwide" for the impressive figures. However, the stock retraced all of its gains by noon, closing the day 0.7% higher at S$2.72. Meanwhile, AEM, a bellwether chip stock, experienced a 14% surge the previous day before falling 4.4% on Friday, ending at S$10.46.
This marked a 4.7% decline after initially rising 5.1% in the morning. Frencken, which manufactures high-precision components and modules for multinational companies including Philips and ASML, also saw its shares drop 7.2% to S$2.59 after reporting a 3.4% decline in H1 net profit. The company's expenses widened by 9.9% year on year to S$32.6 million, while revenue declined 0.8% to S$427.8 million.
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