UWC (5292) is a Main Market company which is in the Technology segment. 

UWC is a company that many investors who love the tech sector are aware of. 

UWC is in the business of fabrication services (metal piece-parts & precision machined components). UWC is also involved in automated test equipment and life-science.

Is UWC selling at cheap price now?

1. Share price you pay now is more than Net Asset per share. 

UWC's share price is RM 3.28, whilst its net assets is about RM 0.33.

2. Business has improved since IPO in 2019, may have been reflected in share price.

UWC's revenue & profit was highest recently in 2022, highest share price was in 2021 around RM7.30. UWC's revenue & profit seem to be growing in tandem with global semiconductor growth.

3. Positive cashflow from operations since IPO in 2019. UWC's net cash generated from operations may have decreased recently, but past record has been great. Cash pile of RM43,324mil. against Low debt of RM1,477mil. is good buffer.

4. Group Chief Executive Officer bought back shares in March 2022.

Dato' Ng Chai Eng acquired 50k shares on 11 March 2022. 

Usually, this is a vote of confidence that the company is undervalued.

5. PE ratio is 35-40.

UWC's PE ratio has dropped as the share price dropped. If growth is sustainable, such PE ratio is acceptable.  

The semiconductor industry is a cyclical industry.

Nomura says major economies will face recession next year. 

If recession happens, semiconductor industry suffer a downturn.

I don't have shares in UWC. Assuming earnings in 2023 or 2024 drop to 2020 levels, with PE ratio of 35, UWC should be worth RM 1.85. This is because in 2022, we learned that cyclical stocks need to add more margin of safety.