- AEM’s FY23 revenue guidance of S$500m is a significant drop from FY22 but it may revise it up if visibility improves for 2H23. As a result, we cut our respective FY23 and FY24 PATMI forecasts by 34% and 11% as AEM’s margins are likely face some pressure due to lower operating leverage as well as a potential margin squeeze by its main customer for its newer orders.
- - Read this at SGinvestors.io -
Gross and net margin likely to face pressure
- AEM's major customer who has reduced overall orders by 40% y-o-y and are currently suffering losses, may also negotiate for lower prices for new orders, possibly reducing AEM’s margins.
- - Read this at SGinvestors.io -
Glimmer of hope in 2H23
- Management expects revenue from new customers to more than double in FY23E, and its S$500m revenue guidance may be revised up as visibility becomes clearer for 2H23. However, we believe a rebound in FY24E is more likely.
More downside risk
- Read more at SGinvestors.io.
Above is the excerpt from report by Maybank Research.
Clients of Maybank Securities may be the first to access the full report in PDF @ https://www.ketrade.com.sg/.
Jarick Seet Maybank Research | https://www.maybank-ke.com.sg/ 2023-02-27
Read also Maybank's most recent report:
2023-08-14 AEM - Worst Should Be Over, FY23 Should Be Bottom; Upgrade To BUY.
Previous report by Maybank:
2023-07-28 AEM - Overhang Cleared; Upgrade To HOLD.
Price targets by 3 other brokers at AEM Target Prices.
Listing of research reports at AEM Analyst Reports.
Relevant links:
AEM Share Price History,
AEM Announcements,
AEM Dividends & Corporate Actions,
AEM News Articles
