AEM - DBS Research 2023-11-14: Stand On The Sidelines For Now

AEM - Stand On The Sidelines For Now

Published:
AEM (SGX:AWX) | SGinvestors.ioAEM (SGX:AWX)
  • 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.
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  • 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.
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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:
2024-05-10 AEM - Two Sides To A Chip ~ Key Customer Weakness, New Customer Growth.

Previous report by DBS:
2024-03-01 AEM - Uncertainties Persist Into 2024.

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





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