AEM Holdings - Maybank Research 2023-02-27: Year Of Headwinds; Tough Times Ahead

AEM Holdings - Year Of Headwinds; Tough Times Ahead

  • 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.
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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.
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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

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Above is the excerpt from report by Maybank Research.
Clients of Maybank Securities may be the first to access the full report in PDF @

Jarick Seet Maybank Research | 2023-02-27

Read also Maybank's most recent report:
2024-05-09 AEM - 2H24 Hopes Diminish; Downgrade To HOLD.

Previous report by Maybank:
2024-04-03 AEM - Bright Sparks Appearing; Worst Likely Over. Upgrade To BUY.

Price targets by 2 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


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