- AEM (SGX:AWX)'s 9M23 revenue of S$387.0m (-48.2% y-o-y), largely in line with expectations. 9M23 revenue weakness is largely attributed to customers pushing out their test-related capex to 2024 and beyond, amid an industry downturn along with an absence of a ramp-up in products vs 9M22.
- - Read this at SGinvestors.io -
- For 9M23, services (+18.3% y-o-y), which primarily consist of contract manufacturing, were more resilient compared to consumables (- 60.6% y-o-y) and equipment (-80.6% y-o-y). AEM also maintains its revenue guidance of S$460-S$490m.
9M23 earnings account for 17.4% of our estimates.
- AEM reported 9M23 earnings of S$3.5m (-96.9% y-o-y), below our estimates even after accounting for one-off arbitration expenses of S$26.7m. 9M23 net profit margin of 0.9% took a hit, as AEM fully recognised the arbitration expenses in 3Q23. Excluding this significant one-off, the profit before tax (PBT) margin would have been 11.0% vs 2.6% after exceptionals.
- - Read this at SGinvestors.io -
Our Thoughts
Worst is likely over in terms of earnings, but recovery could be delayed till late 2024.
- Read more at SGinvestors.io.
Above is the excerpt from report by DBS Group Research.
Clients of DBS may access the full report in PDF @ https://www.dbs.com/insightsdirect/.
Amanda TAN DBS Group Research | Lee Keng LING DBS Research | https://www.dbs.com/insightsdirect/ 2023-11-14
Read also DBS's most recent report:
2024-11-14 AEM - Reaffirming Our Non-consensus BUY.
Previous report by DBS:
2024-11-07 AEM - Non-consensus Upgrade On Turnaround.
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
