AEM Holdings *Official* (SGX:AWX)
- Thread starter wahkao3
- Start date
is it safe?
Basically tech stock is high risk high return.
AEM today up 7%, anyone miss the boat?
I'm in UMS, up together
Added more yesterday during the dip. Some kopi lui in the pocket today.
Bro, I don't see how this is a high risk stock as you claim. Haha
When it's raising, you wouldn't see the risk
When it's drop like a falling knife, then you will know the risk.
When it's raising, you wouldn't see the risk
When it's drop like a falling knife, then you will know the risk.
I didn't feel any risk at all when it was dropping the last few days. Fundamentals are strong, good growth prospects. Every dip is a chance to further add.
AEM today up 7%, anyone miss the boat?
I'm in UMS, up together
Another good day, tech stocks up up up
Shion
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Analysts remain confident on AEM following strong results
Analysts remain confident on AEM following strong results
https://www.theedgesingapore.com/ca...remain-confident-aem-following-strong-results
Analysts from DBS Group Research, Maybank Kim Eng and KGI Securities have maintained their “buy” and “outperform” ratings on AEM and target prices of $5.16, $5.05, and $5.26 after the company announced a spike in both revenue and earnings for 3QFY2020.
On Nov 3, AEM announced 3QFY20 revenue of $161.8 million on the back of increased orders for tools, consumables, and services, a jump of 93% y-o-y. It elaborated 74% of total revenue came from tools and machines, while revenue from consumables and services accounted for 26% of total revenue.
For 3QFY2020, profit before tax amounted to $29.9 million and net profit of $24.3 million, a jump of 80.4% and 77.4% respectively.
AEM reported for the nine months in 2020, profit before tax stood at $97.2 million and net profit at S$79.6 million.
Diluted earnings per share also increased from five cents in 3Q2019 to 8.9 cents in 3Q2020.
With the strong 3Q2020 results, the Group is raising its FY2020 revenue guidance to be between $500 million to $520 million based on the sales order visibility and business outlook, and capital expenditure (capex) for FY2020 is projected at about $5 million.
Furthermore, AEM will also continue to focus more effort in research and development (R&D). R&D expenditure in 4Q2020 is expected to be $2 million to support new projects for future years.
The company said it will also continue to “expand strategically through mergers and acquisitions”
This is as it “solidifies its position as a global leader” offering application-specific intelligent system test and handling solutions for semiconductor and electronics companies serving advanced computing, 5G and AI markets.
In a Nov 6 note, DBS Group Research’s Chung Wei Le and Ling Lee Keng raised their target price of $5.16 from their previous figure of $4.96.
They believe AEM is in a “strategic position” to benefit from its key customer and industry uptrend. It is trading at 9.2x FY21F PE, which is undemanding to its peer average of 19.9x.
In addition, they said the semiconductor industry momentum remains strong, and highlighted the fact that industry associations are forecasting an accelerated growth for semiconductors in 2021, with US semiconductor equipment billings increasing 40.4% y-o-y in September.
KGI Securities’s Tan Jiunn Chyuan also raised his target price from $4.78 to $5.26, said the 3QFY20 revenue figure was AEM’s “highest ever quarterly revenue”.
They noted sales mix was largely skewed to tools and machines in 3Q20, at a 75/25 split. While about 15% profit margins in 2Q20 were attributable to increased R&D spend and reduction of non- recurring fees from customers, 3Q20 margins were more of a result of the product mix.
Going forward, given the $2million in R&D expenditure announced by AEM just for 4Q20, they expect margins to come in similar to 2Q and 3Q.
Tan also highlighted that despite a capex cut in key customer Intel, they remain “fairly confident” that AEM can continue growing their wallet share with them.
Given the new revenue guidance of $520 million, Tan said implied 4Q20 sales are ranging from $65 to 85 million, which is below the $88.8 million in 4Q19.
As such, he adjusts his FY20F revenue estimates above the higher end of guidance, at $525 million, after revising up HDMT sales estimate and cutting back estimates from the 3 smaller businesses.
“Our revised profit margin forecast is at 18%/17.7%/17.8% for FY20/21/22 respectively. We estimate FY21F sales to be at S$579mn, about +10% YoY and above consensus.” he concludes.
Meanwhile, Maybank Kim Eng’s Gene Lih Lai is the only analyst to maintain an unchanged target price of $5.05, but said that the 3Q20 figures “was ahead of our and consensus expectations.”
He also said AEM remains positive on long-term growth prospects, and added the rollout of 5G enables increased complexity in mission-critical applications.
This has resulted in unprecedented challenges in chip testing. Heterogeneous packaging is also becoming mainstream, as traditional Moore's law scaling faces limitations.
VLSI Research expects system level test (SLT) to grow 4.4x faster than wafer sort and functional test in 2020-24, as SLT is beneficial in overcoming limitations of current design-for-test techniques, which leave millions of transistors untested.
He also said AEM expects seasonality patterns to normalise to 2Q/3Q being peak quarters, and 1Q and 4Q being lulls in any given year.
This contrasts what was observed in 4QFY19/1QFY20, where these were the strong quarters within 2019/2020 respectively.
As such, Gene said this normalisation may imply difficult y-o-y revenue comparisons in 4Q20/1Q21. As teh stock price has risen by 125% in the last twelve months, “we see risks of lacklustre share price performance until Jan-21 when FY21 revenue guidance is provided, and this may provide opportunities for investors to accumulate on dips.” he thinks.
Gene also warns a key risk is that if Intel faces steeper than expected market share loss, which may temper the pace of equipment orders to AEM.
As at 1.36pm, shares of AEM were trading at $3.55, with a FY20 price to book ratio of 4.7% and dividend yield of 2.4%
Analysts remain confident on AEM following strong results
https://www.theedgesingapore.com/ca...remain-confident-aem-following-strong-results
Analysts from DBS Group Research, Maybank Kim Eng and KGI Securities have maintained their “buy” and “outperform” ratings on AEM and target prices of $5.16, $5.05, and $5.26 after the company announced a spike in both revenue and earnings for 3QFY2020.
On Nov 3, AEM announced 3QFY20 revenue of $161.8 million on the back of increased orders for tools, consumables, and services, a jump of 93% y-o-y. It elaborated 74% of total revenue came from tools and machines, while revenue from consumables and services accounted for 26% of total revenue.
For 3QFY2020, profit before tax amounted to $29.9 million and net profit of $24.3 million, a jump of 80.4% and 77.4% respectively.
AEM reported for the nine months in 2020, profit before tax stood at $97.2 million and net profit at S$79.6 million.
Diluted earnings per share also increased from five cents in 3Q2019 to 8.9 cents in 3Q2020.
With the strong 3Q2020 results, the Group is raising its FY2020 revenue guidance to be between $500 million to $520 million based on the sales order visibility and business outlook, and capital expenditure (capex) for FY2020 is projected at about $5 million.
Furthermore, AEM will also continue to focus more effort in research and development (R&D). R&D expenditure in 4Q2020 is expected to be $2 million to support new projects for future years.
The company said it will also continue to “expand strategically through mergers and acquisitions”
This is as it “solidifies its position as a global leader” offering application-specific intelligent system test and handling solutions for semiconductor and electronics companies serving advanced computing, 5G and AI markets.
In a Nov 6 note, DBS Group Research’s Chung Wei Le and Ling Lee Keng raised their target price of $5.16 from their previous figure of $4.96.
They believe AEM is in a “strategic position” to benefit from its key customer and industry uptrend. It is trading at 9.2x FY21F PE, which is undemanding to its peer average of 19.9x.
In addition, they said the semiconductor industry momentum remains strong, and highlighted the fact that industry associations are forecasting an accelerated growth for semiconductors in 2021, with US semiconductor equipment billings increasing 40.4% y-o-y in September.
KGI Securities’s Tan Jiunn Chyuan also raised his target price from $4.78 to $5.26, said the 3QFY20 revenue figure was AEM’s “highest ever quarterly revenue”.
They noted sales mix was largely skewed to tools and machines in 3Q20, at a 75/25 split. While about 15% profit margins in 2Q20 were attributable to increased R&D spend and reduction of non- recurring fees from customers, 3Q20 margins were more of a result of the product mix.
Going forward, given the $2million in R&D expenditure announced by AEM just for 4Q20, they expect margins to come in similar to 2Q and 3Q.
Tan also highlighted that despite a capex cut in key customer Intel, they remain “fairly confident” that AEM can continue growing their wallet share with them.
Given the new revenue guidance of $520 million, Tan said implied 4Q20 sales are ranging from $65 to 85 million, which is below the $88.8 million in 4Q19.
As such, he adjusts his FY20F revenue estimates above the higher end of guidance, at $525 million, after revising up HDMT sales estimate and cutting back estimates from the 3 smaller businesses.
“Our revised profit margin forecast is at 18%/17.7%/17.8% for FY20/21/22 respectively. We estimate FY21F sales to be at S$579mn, about +10% YoY and above consensus.” he concludes.
Meanwhile, Maybank Kim Eng’s Gene Lih Lai is the only analyst to maintain an unchanged target price of $5.05, but said that the 3Q20 figures “was ahead of our and consensus expectations.”
He also said AEM remains positive on long-term growth prospects, and added the rollout of 5G enables increased complexity in mission-critical applications.
This has resulted in unprecedented challenges in chip testing. Heterogeneous packaging is also becoming mainstream, as traditional Moore's law scaling faces limitations.
VLSI Research expects system level test (SLT) to grow 4.4x faster than wafer sort and functional test in 2020-24, as SLT is beneficial in overcoming limitations of current design-for-test techniques, which leave millions of transistors untested.
He also said AEM expects seasonality patterns to normalise to 2Q/3Q being peak quarters, and 1Q and 4Q being lulls in any given year.
This contrasts what was observed in 4QFY19/1QFY20, where these were the strong quarters within 2019/2020 respectively.
As such, Gene said this normalisation may imply difficult y-o-y revenue comparisons in 4Q20/1Q21. As teh stock price has risen by 125% in the last twelve months, “we see risks of lacklustre share price performance until Jan-21 when FY21 revenue guidance is provided, and this may provide opportunities for investors to accumulate on dips.” he thinks.
Gene also warns a key risk is that if Intel faces steeper than expected market share loss, which may temper the pace of equipment orders to AEM.
As at 1.36pm, shares of AEM were trading at $3.55, with a FY20 price to book ratio of 4.7% and dividend yield of 2.4%
Shion
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AEM Holdings plans to take CEI Ltd private in S$99.7 million buy-out offer
AEM Holdings plans to take CEI Ltd private in S$99.7 million buy-out offer
https://www.businesstimes.com.sg/co...cei-ltd-private-in-s997-million-buy-out-offer
ELECTRONICS services provider AEM Holdings has launched a S$99.7 million buy-out bid for contract manufacturer CEI Ltd, in a voluntary conditional offer on Monday.
Citing business synergy, mainboard-listed AEM is offering S$1.15 in cash, or a mix of cash and new AEM shares, for each ordinary share in mainboard-listed CEI.
The offer price marks a premium of 26.1 per cent volume-weighted average price of CEI shares in the 12 months to Jan 8. CEI closed at S$1.00 on Monday, up by S$0.01 or 1.01 per cent, while AEM ended higher by S$0.02 or 0.55 per cent, at S$3.67.
CEI shareholders can also opt to accept the offer for a mix of either 85 per cent cash and 15 per cent new shares, or 70 per cent cash and 30 per cent new shares, at an issue price of S$3.55 for each new share in AEM.
AEM plans to delist and privatise CEI, but added in its offer document that it wants to continue developing the business and does not intend to introduce any major changes, redeploy fixed assets or terminate staff beyond the ordinary course of business.
The AEM board, which plans to fund the cash component of its offer through internal cash resources, asserted that CEI offers "a strategic fit and will provide synergistic benefits to the business and operations". These could include opportunities for better supply-chain integration, wider cross-selling and improved manufacturing processes.
Still, the privatisation bid is conditional on AEM and its concert parties obtaining valid acceptances for at least a 50 per cent interest by the close of the offer.
For the deal to go through, the Singapore Exchange must also give in-principle approval for the listing and quotation of the new AEM shares by the long-stop date of Feb 15.
Separately, the CEI board noted that it will appoint an independent financial adviser to advise the independent directors, once the offer has been made.
In the meantime, it advised shareholders to exercise caution when dealing in their shares, and refrain from taking any action prejudicial to their interests.
AEM Holdings plans to take CEI Ltd private in S$99.7 million buy-out offer
https://www.businesstimes.com.sg/co...cei-ltd-private-in-s997-million-buy-out-offer
ELECTRONICS services provider AEM Holdings has launched a S$99.7 million buy-out bid for contract manufacturer CEI Ltd, in a voluntary conditional offer on Monday.
Citing business synergy, mainboard-listed AEM is offering S$1.15 in cash, or a mix of cash and new AEM shares, for each ordinary share in mainboard-listed CEI.
The offer price marks a premium of 26.1 per cent volume-weighted average price of CEI shares in the 12 months to Jan 8. CEI closed at S$1.00 on Monday, up by S$0.01 or 1.01 per cent, while AEM ended higher by S$0.02 or 0.55 per cent, at S$3.67.
CEI shareholders can also opt to accept the offer for a mix of either 85 per cent cash and 15 per cent new shares, or 70 per cent cash and 30 per cent new shares, at an issue price of S$3.55 for each new share in AEM.
AEM plans to delist and privatise CEI, but added in its offer document that it wants to continue developing the business and does not intend to introduce any major changes, redeploy fixed assets or terminate staff beyond the ordinary course of business.
The AEM board, which plans to fund the cash component of its offer through internal cash resources, asserted that CEI offers "a strategic fit and will provide synergistic benefits to the business and operations". These could include opportunities for better supply-chain integration, wider cross-selling and improved manufacturing processes.
Still, the privatisation bid is conditional on AEM and its concert parties obtaining valid acceptances for at least a 50 per cent interest by the close of the offer.
For the deal to go through, the Singapore Exchange must also give in-principle approval for the listing and quotation of the new AEM shares by the long-stop date of Feb 15.
Separately, the CEI board noted that it will appoint an independent financial adviser to advise the independent directors, once the offer has been made.
In the meantime, it advised shareholders to exercise caution when dealing in their shares, and refrain from taking any action prejudicial to their interests.
Shion
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AEM gets SGX nod for new shares, affirms $1.15 CEI buyout offer
AEM gets SGX nod for new shares, affirms $1.15 CEI buyout offer
https://www.straitstimes.com/busine...d-for-new-shares-affirms-115-cei-buyout-offer
SINGAPORE (THE BUSINESS TIMES) - Electronics services provider AEM Holdings on Monday (Feb 15) said it received in-principle approval from the Singapore Exchange (SGX) for the listing and quotation of new shares on Saturday, a pre-condition for its $99.7 million buyout offer for CEI to go through.
AEM has affirmed its final $1.15 per share offer for CEI, which has an option for all-cash or cash with new AEM shares. The electronics services provider said those who accept the offer without stating their preference will be deemed to have opted to receive in cash.
The alternative is either a mix of 85 per cent cash and 15 per cent new shares or 70 per cent cash and 30 per cent new shares, at an issue price of $3.55 for each new AEM share. This means either $0.9775 in cash and 0.0486 of a new AEM share or $0.805 in cash and 0.0972 of a new AEM share.
The $1.15 offer price marks a premium of 26.1 per cent to the volume-weighted average price of CEI shares in the 12 months to Jan 8, the last trading day before the pre-conditional offer was made.
Prior to trading halts called by both AEM and CEI on Monday morning, AEM shares last traded at $4.30 on Feb 11, while CEI shares last traded at $1.16 on the same day.
AEM chairman Loke Wai San said: "Adding CEI to AEM's portfolio solidifies our leadership position in serving semiconductor and electronics companies in the advanced computing, 5G and artificial intelligence space."
He noted that CEI's regional footprint and expertise in their field will strengthen AEM's resilience and allow it to be even more responsive to the needs of the firm's global customer base.
AEM said shareholders will receive the offer document between 14 and 21 days from Monday. The offer will remain open for acceptance for at least 28 days from the date the offer document is posted.
AEM gets SGX nod for new shares, affirms $1.15 CEI buyout offer
https://www.straitstimes.com/busine...d-for-new-shares-affirms-115-cei-buyout-offer
SINGAPORE (THE BUSINESS TIMES) - Electronics services provider AEM Holdings on Monday (Feb 15) said it received in-principle approval from the Singapore Exchange (SGX) for the listing and quotation of new shares on Saturday, a pre-condition for its $99.7 million buyout offer for CEI to go through.
AEM has affirmed its final $1.15 per share offer for CEI, which has an option for all-cash or cash with new AEM shares. The electronics services provider said those who accept the offer without stating their preference will be deemed to have opted to receive in cash.
The alternative is either a mix of 85 per cent cash and 15 per cent new shares or 70 per cent cash and 30 per cent new shares, at an issue price of $3.55 for each new AEM share. This means either $0.9775 in cash and 0.0486 of a new AEM share or $0.805 in cash and 0.0972 of a new AEM share.
The $1.15 offer price marks a premium of 26.1 per cent to the volume-weighted average price of CEI shares in the 12 months to Jan 8, the last trading day before the pre-conditional offer was made.
Prior to trading halts called by both AEM and CEI on Monday morning, AEM shares last traded at $4.30 on Feb 11, while CEI shares last traded at $1.16 on the same day.
AEM chairman Loke Wai San said: "Adding CEI to AEM's portfolio solidifies our leadership position in serving semiconductor and electronics companies in the advanced computing, 5G and artificial intelligence space."
He noted that CEI's regional footprint and expertise in their field will strengthen AEM's resilience and allow it to be even more responsive to the needs of the firm's global customer base.
AEM said shareholders will receive the offer document between 14 and 21 days from Monday. The offer will remain open for acceptance for at least 28 days from the date the offer document is posted.
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AEM Holdings has reported earnings of $42.3 million for the 2HFY2020 ended December, up 38.9% from earnings of $30.5 million.
FY2020 earnings surged 85% y-o-y to $97.6 million from the $52.8 million in earnings for the FY2019.
The group reported record revenue of $519.0 million for the FY2020, up 60.6% y-o-y, which stands at the higher end of its revenue guidance of $500 million to $520 million.
https://www.theedgesingapore.com/ca...it-fy20-proposes-final-dividend-4-cents-share
FY2020 earnings surged 85% y-o-y to $97.6 million from the $52.8 million in earnings for the FY2019.
The group reported record revenue of $519.0 million for the FY2020, up 60.6% y-o-y, which stands at the higher end of its revenue guidance of $500 million to $520 million.
https://www.theedgesingapore.com/ca...it-fy20-proposes-final-dividend-4-cents-share
Shion
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Analysts see AEM as good 'buy' on new all-time high profit and strong momentum in industry
Analysts see AEM as good 'buy' on new all-time high profit and strong momentum in industry
https://www.theedgesingapore.com/ca...-new-all-time-high-profit-and-strong-momentum
As AEM Holdings see record earnings and revenue of $97.6 million and $519.0 million respectively for the FY2020 ended December, analysts from CGS-CIMB Research, DBS Group Research and Maybank Kim Eng have recommended investors to continue accumulating the stock.
CGS-CIMB analyst William Tng has maintained “add” on AEM with an unchanged target price of $4.63 as the company’s results stood in line with the brokerage’s as well as Bloomberg consensus’ expectations.
Tng has also noted that AEM’s strong balance sheet, which grew to $134.8 million as at Dec 31, 2020, from $107.7 million in Dec 31, 2019, is positive for mergers and acquisitions (M&A) growth for the company.
Other than AEM’s ongoing offer for CEI, the company also acquired US company Lattice Innovation that provides proprietary technology solutions, which will boost AEM’s competitiveness in system level tasting, he says.
However, Tng has cut his earnings per share (EPS) estimates for FY2021 and FY2022 by 2.1% and 1.0% respectively on expenses assumptions and “reflect the higher number of shares outstanding”.
“Our Gordon-Growth derived price-to-book value (P/BV) multiple is 4.40 times (previously 6.09 times). Re-rating catalysts are FY21F revenue guidance, which AEM will issue after the completion of the CEI acquisition and new customer wins. Downside risks are delivery delays due to lockdowns/movement restriction extensions and loss of competitiveness by its key customer,” he says.
DBS Group Research analysts Chung Wei Le and Ling Lee Keng have also maintained “buy” on the counter with a higher target price of $5.36 from $5.16 as it sees momentum in the industry remaining strong.
“AEM is in a strategic position to benefit from its key customer and industry uptrend. The stock is currently trading at 10.3 times FY2021 P/E, which is at a 51% discount to its peer average of 21.0 times. We are expecting earnings to grow at a compound annual growth rate (CAGR) of 12.8% from FY2020 to FY2023,” they write.
Furthermore, Chung and Ling see upside for AEM due to a strong surge in demand for chips amid the global chip shortage.
“Qualcomm’s incoming CEO has said that orders for chips that run computers, cars, and many other internet-connected devices are swamping the industry and he expects supplies to improve in 2HFY2021,” they say.
“We believe that the temporary shortage is a signal to fabs and foundries to increase their spending on their semiconductor manufacturing and testing equipment, and this should be positive for AEM,” they add.
On the acquisition of CEI, Chung and Ling estimate CEI to contribute some $1.6 million in earnings to AEM’s FY2021 results assuming the completion of the acquisition will take place in 3QFY2021.
“In our consolidation, we have assumed that all shareholders of CEI tender their shares, and elect the 85/15 Cash/Shares option and 70/30 Cash/Shares option at a ratio of 50-50. In this case, 5.4m new shares will be issued, representing 2.0% of AEM’s outstanding shares in FY2020,” they say.
Beyond the higher target price, Chung and Ling have also lifted their FY2021 and FY2022 earnings estimates by 8% and 22% respectively as they mainly raise their revenue estimates for the company.
“The strong data points and news developments in the industry provides us with confidence to raise our earnings estimates for AEM. The larger increase in FY2022 is mainly due to the full-year contribution from CEI as compared to one quarter’s worth of contribution in FY2021,” they add.
For Maybank Kim Eng’s Lai Gene Lih, he too, has maintained “buy” with an unchanged target price of $5.05 on AEM.
While 2HFY2020’s earnings stood ahead of the brokerage’s expectations, Lai says his forecasts remain largely unchanged due to the lack of profit guidance for FY2021 from AEM till the completion of the acquisition of CEI.
“Our forecasts do not include contributions from CEI nor Lattice currently. We believe key risk to our FY21 earnings estimate is if there are high-base effects from strong HDMT performance in FY2020,” he writes.
“Contrastingly, we believe upside drivers are: accretive M&A; better-than-expected cloud/ 5G spending momentum in 2HFY2021; and/or if customer Intel benefits from share gains as a result of tight foundry capacity faced by competitors,” he adds.
Shares in AEM closed 4 cents lower or 1.0% down at $3.97 on March 2.
Analysts see AEM as good 'buy' on new all-time high profit and strong momentum in industry
https://www.theedgesingapore.com/ca...-new-all-time-high-profit-and-strong-momentum
As AEM Holdings see record earnings and revenue of $97.6 million and $519.0 million respectively for the FY2020 ended December, analysts from CGS-CIMB Research, DBS Group Research and Maybank Kim Eng have recommended investors to continue accumulating the stock.
CGS-CIMB analyst William Tng has maintained “add” on AEM with an unchanged target price of $4.63 as the company’s results stood in line with the brokerage’s as well as Bloomberg consensus’ expectations.
Tng has also noted that AEM’s strong balance sheet, which grew to $134.8 million as at Dec 31, 2020, from $107.7 million in Dec 31, 2019, is positive for mergers and acquisitions (M&A) growth for the company.
Other than AEM’s ongoing offer for CEI, the company also acquired US company Lattice Innovation that provides proprietary technology solutions, which will boost AEM’s competitiveness in system level tasting, he says.
However, Tng has cut his earnings per share (EPS) estimates for FY2021 and FY2022 by 2.1% and 1.0% respectively on expenses assumptions and “reflect the higher number of shares outstanding”.
“Our Gordon-Growth derived price-to-book value (P/BV) multiple is 4.40 times (previously 6.09 times). Re-rating catalysts are FY21F revenue guidance, which AEM will issue after the completion of the CEI acquisition and new customer wins. Downside risks are delivery delays due to lockdowns/movement restriction extensions and loss of competitiveness by its key customer,” he says.
DBS Group Research analysts Chung Wei Le and Ling Lee Keng have also maintained “buy” on the counter with a higher target price of $5.36 from $5.16 as it sees momentum in the industry remaining strong.
“AEM is in a strategic position to benefit from its key customer and industry uptrend. The stock is currently trading at 10.3 times FY2021 P/E, which is at a 51% discount to its peer average of 21.0 times. We are expecting earnings to grow at a compound annual growth rate (CAGR) of 12.8% from FY2020 to FY2023,” they write.
Furthermore, Chung and Ling see upside for AEM due to a strong surge in demand for chips amid the global chip shortage.
“Qualcomm’s incoming CEO has said that orders for chips that run computers, cars, and many other internet-connected devices are swamping the industry and he expects supplies to improve in 2HFY2021,” they say.
“We believe that the temporary shortage is a signal to fabs and foundries to increase their spending on their semiconductor manufacturing and testing equipment, and this should be positive for AEM,” they add.
On the acquisition of CEI, Chung and Ling estimate CEI to contribute some $1.6 million in earnings to AEM’s FY2021 results assuming the completion of the acquisition will take place in 3QFY2021.
“In our consolidation, we have assumed that all shareholders of CEI tender their shares, and elect the 85/15 Cash/Shares option and 70/30 Cash/Shares option at a ratio of 50-50. In this case, 5.4m new shares will be issued, representing 2.0% of AEM’s outstanding shares in FY2020,” they say.
Beyond the higher target price, Chung and Ling have also lifted their FY2021 and FY2022 earnings estimates by 8% and 22% respectively as they mainly raise their revenue estimates for the company.
“The strong data points and news developments in the industry provides us with confidence to raise our earnings estimates for AEM. The larger increase in FY2022 is mainly due to the full-year contribution from CEI as compared to one quarter’s worth of contribution in FY2021,” they add.
For Maybank Kim Eng’s Lai Gene Lih, he too, has maintained “buy” with an unchanged target price of $5.05 on AEM.
While 2HFY2020’s earnings stood ahead of the brokerage’s expectations, Lai says his forecasts remain largely unchanged due to the lack of profit guidance for FY2021 from AEM till the completion of the acquisition of CEI.
“Our forecasts do not include contributions from CEI nor Lattice currently. We believe key risk to our FY21 earnings estimate is if there are high-base effects from strong HDMT performance in FY2020,” he writes.
“Contrastingly, we believe upside drivers are: accretive M&A; better-than-expected cloud/ 5G spending momentum in 2HFY2021; and/or if customer Intel benefits from share gains as a result of tight foundry capacity faced by competitors,” he adds.
Shares in AEM closed 4 cents lower or 1.0% down at $3.97 on March 2.
Shion
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AEM shares rise 5.4% after Intel announces plan to build US$20b chip plants
AEM shares rise 5.4% after Intel announces plan to build US$20b chip plants
https://www.straitstimes.com/busine...tel-announces-plan-to-build-us20b-chip-plants
SINGAPORE (THE BUSINESS TIMES) - Shares of AEM Holdings hit an intraday high of $4.13 at 2pm on Wednesday (March 24) amid active trading, up 5.4 per cent.
As at 2.04pm, AEM's units were trading at $4.12, up $0.20 or 5.1 per cent, with 10.4 million shares worth $41.7 million changing hands.
No married deals were recorded, according to ShareInvestor data.
The price movement came after US chip giant Intel's Wednesday announcement that it would spend U$20 billion (S$26.9 billion) on two new plants in Arizona and create a foundry business that will make chips for other companies. Intel's chief executive officer Pat Gelsinger has also pledged that majority of the company's chips will be manufactured in-house.
In a report on Wednesday by Lim & Tan Securities, the firm said that AEM is a crucial partner of Intel, supplying it next generation test handlers. It added that the latest Intel news was "bullish" for the electronic services provider, which is Intel's key test handler supplier listed in Singapore.
AEM currently trades at 10 times its price to earnings ratio, and yields 2 per cent, the stockbroking firm said.
Lim & Tan Securities called Intel's plan an "aggressive move that puts Intel into direct competition with Taiwan Semiconductor Manufacturing Co, the world's most advanced chipmaker".
AEM shares rise 5.4% after Intel announces plan to build US$20b chip plants
https://www.straitstimes.com/busine...tel-announces-plan-to-build-us20b-chip-plants
SINGAPORE (THE BUSINESS TIMES) - Shares of AEM Holdings hit an intraday high of $4.13 at 2pm on Wednesday (March 24) amid active trading, up 5.4 per cent.
As at 2.04pm, AEM's units were trading at $4.12, up $0.20 or 5.1 per cent, with 10.4 million shares worth $41.7 million changing hands.
No married deals were recorded, according to ShareInvestor data.
The price movement came after US chip giant Intel's Wednesday announcement that it would spend U$20 billion (S$26.9 billion) on two new plants in Arizona and create a foundry business that will make chips for other companies. Intel's chief executive officer Pat Gelsinger has also pledged that majority of the company's chips will be manufactured in-house.
In a report on Wednesday by Lim & Tan Securities, the firm said that AEM is a crucial partner of Intel, supplying it next generation test handlers. It added that the latest Intel news was "bullish" for the electronic services provider, which is Intel's key test handler supplier listed in Singapore.
AEM currently trades at 10 times its price to earnings ratio, and yields 2 per cent, the stockbroking firm said.
Lim & Tan Securities called Intel's plan an "aggressive move that puts Intel into direct competition with Taiwan Semiconductor Manufacturing Co, the world's most advanced chipmaker".
Shion
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AEM Q1 net profit falls 63.1% to S$13.34 million after record year-ago period
https://www.businesstimes.com.sg/co...to-s1334-million-after-record-year-ago-period
MAINBOARD-LISTED AEM Holdings' first-quarter earnings plunged year on year, which the group attributed to a high revenue base in a business update on Monday.
Net profit fell by 63.1 per cent to S$13.34 million for the three months to March 31, while revenue was down 45.4 per cent to S$80.23 million, with AEM noting that its latest results followed a "record-breaking Q1 2020".
All the same, the electronics services provider now expects revenue of between S$460 million and S$520 million for the full year, after its takeover of contract manufacturer CEI Ltd.
The turnover will be weighted towards the second half of the year and into 2022, AEM said in a press release, citing the introduction of next-generation tools for the high-performance computing segment at a customer's high-volume manufacturing sites.
The acquisition of CEI has added end-to-end customisation and delivery capabilities, and AEM "aims to achieve meaningful revenue" from technical engagements with leading semiconductor companies in 2022, the group reported.
Net asset value stood at 93.9 Singapore cents a share, against 76.7 cents as at Dec 31, 2020, which AEM said came mainly on the consolidation of CEI as a subsidiary.
The board added that it is continuing its mergers and acquisitions programme, and that "the group continues to remain cautiously optimistic about its business and strives to capture new business opportunities as we navigate through these uncertain and volatile times".
AEM shed S$0.05, or 1.22 per cent, to S$4.05 on Monday, before the update.
Shion
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Hot stock: AEM down as much as 6.9% after Q1 earnings plunge
https://www.businesstimes.com.sg/co...m-down-as-much-as-69-after-q1-earnings-plunge
SHARES of mainboard-listed AEM: AWX -6.42% tumbled by 6.9 per cent on Tuesday after the group posted a year-on-year plunge in its first-quarter earnings.
The electronics services provider saw its shares decline to an intraday low of S$3.77 as at 10.01am on Monday, down S$0.28 or 6.9 per cent.
The counter was trading 6.7 per cent or S$0.27 lower at S$3.78 as at 1.21pm, with 14.9 million shares changing hands amid active trading.
On Monday, AEM said its net profit fell by 63.1 per cent to S$13.3 million for the three months to March 31.
Revenue was down 45.4 per cent to S$80.2 million, with AEM noting that its latest results followed a "record-breaking Q1 2020".
The group now expects revenue of between S$460 million and S$520 million for the full year, after its takeover of contract manufacturer CEI. The turnover will be weighted towards the second half of the year and into 2022, AEM said in a bourse filing.
The FY2021 revenue guidance is short of the consensus estimate of S$556 million, hence street estimates would have to be cut to S$500 million, Lim & Tan Securities said on Tuesday.
In a separate note, DBS Group Research flagged the possibility that AEM's management is being conservative again.
In 2019, AEM's actual revenue of S$323.1 million was 65.7 per cent higher than its first guidance of between S$180 million and S$210 million. In 2020, the group's actual revenue was 52.6 per cent higher than its actual revenue.
AEM's Q1 net profit was also below DBS Group Research's expectations. The research team said one possible explanation for the drop in profit is seasonality.
"Q1 is typically the weaker quarter and in the past has accounted for as low as 13 per cent of AEM's full-year net profit (Q1 2017 and Q1 2019)," DBS said.
Despite the weaker Q1 performance, DBS said results commentary indicates strong recovery in H2 2021 through FY2021 as AEM's next-generation tools are phased into its customer's high-volume manufacturing sites globally.
Lim & Tan Securities' FY2021 net profit estimates would have to be reduced to S$85 million from S$103 million. A similar 17 per cent cut in consensus target price would reduce it to S$4.10, similar to where AEM's counter is currently.
Lim & Tan Securities is recommending that investors "take profit" on the stock. Meanwhile, DBS has a "buy" recommendation on the stock with a target price of S$5.36 under review.
British_Bulldog
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dropped alot these few days.
anyone has opinion on this company?
feel like buying some
anyone has opinion on this company?
feel like buying some
Woah British Bulldog, you are a wrestle fan?
Good buy if you are looking for long term.
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