- AEM’s 1H23 earnings of S$19.7m (-76% y-o-y) are below expectation, meeting only 26% of our full-year estimate, due to weaker-than-expected net margin. Revenue fell 49% y-o-y due to weakness in the semiconductor industry.
- - Read this at SGinvestors.io -
- We believe the major negative news has been priced in and the focus could be on the industry’s recovery and new customers in the medium term. Raise target price for AEM by 27% to S$3.65 (12.8x 2024F PE). Upgrade AEM to BUY.
1H23 earnings below expectations due to weaker-than-expected net margin and revenue.
- AEM Holdings (SGX:AWX)’s 1H23 earnings of S$19.7m (-49% y-o-y) was below expectation, accounting for only 26% of our full-year estimate. The earnings miss was mainly due weaker-than-expected net margin, which fell 8.2ppt y-o-y to 7.2% in 1H23. The net margin decline was due to:
- - Read this at SGinvestors.io -
- a change in product mix as revenue contribution from the high-margin consumables segment fell 65% y-o-y; and
- revenue from the services segment, which has lower margins, rose 33% y-o-y due to increased demand from bio medicals and oil & gas related customers.
Two major negative news priced in.
- Read more at SGinvestors.io.
Above is the excerpt from report by UOB Kay Hian Research.
Clients of UOB Kay Hian may be the first to access the full report in PDF @ https://www.utrade.com.sg/.
John Cheong UOB Kay Hian Research | https://research.uobkayhian.com/ 2023-08-15
Read also UOB's most recent report:
2024-05-09 AEM - 1Q24 Earnings Below Estimate; Outlook Worsens; Downgrade To SELL.
Previous report by UOB:
2024-01-17 AEM - Downgrade To HOLD On Inventory Write-Downs & Limited Near-Term Catalysts.
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
