United Microelectronics Corporation (2303) enters the week with a striking divergence: the stock fell nearly 10% across the past five trading days, yet the lending market is telling a very different story — shorts are quietly stepping back.
The lending picture has shifted decisively in UMC's favour over recent weeks. Availability has tripled in just seven days, jumping from around 115% to 299% — meaning lenders now hold nearly three shares available for every two already borrowed. That reversal is sharp. As recently as late May, availability was compressed near 94-96%, the tightest borrow conditions in the current cycle. The rapid loosening suggests short sellers have been returning shares rather than pressing new positions, even as the stock pulled back. Cost to borrow has climbed modestly — roughly 4% annualised now, up from just over 1.2% in mid-May — but that reflects the earlier period of tighter conditions rather than renewed bear conviction. The ORTEX short score has fallen from around 51 to 39 over the past ten days, a meaningful drop that reinforces the picture of diminishing short-side pressure.
The Street is cautious but not hostile. Consensus sits at hold, with 10 hold ratings and 4 underperform calls as of late May. The analyst mean price target of approximately TWD 82 is well below the current price of TWD 127.5 — a gap that is notable and worth treating with some care given potential timing and estimate revision lags, but directionally consistent with a market that has run significantly ahead of analyst comfort. The PE multiple has expanded roughly six turns over the past month to around 26x, and price-to-book has re-rated nearly a full turn higher to 3.9x over the same period. Factor scores offer a mixed read: EPS surprise ranks in the 86th percentile, a genuine strength reflecting UMC's track record of beating estimates, while days-to-cover ranks in just the 14th percentile and the analyst recommendation differential sits at a weak 6th percentile — confirming that the Street has not caught up with what has been a powerful move.
The institutional register provides some ballast. BlackRock added over 132 million shares in its most recent filing, lifting its stake to 7.6% — a material build by the largest holder and a signal that at least one major allocator has been leaning in. Domestic Taiwanese funds — Capital Investment Trust, Cathay Securities, and Yuanta collectively — hold over 14% of shares. This stable, mostly passive ownership base means the recent price appreciation has not been accompanied by evident institutional distribution, at least in the most current disclosures.
The next earnings event falls on July 29. The last print in late April produced a modest 2.9% one-day gain but was followed by a 21.7% five-day move — a large secondary reaction that suggests the market digests UMC results over several sessions rather than in a single day. Q1 2026 results reportedly came with foundry utilisation climbing to 92% and raised full-year guidance, which helps explain the 40% one-month price run. With availability now loose and short-side pressure easing, the setup heading into July results hinges less on who is short and more on whether the utilisation and demand narrative holds through the summer.
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