- AEM (SGX:AWX) said it discovered a shortfall in inventory which is estimated to be around 5-7% lower than earlier calculated at its Sept 2023 inventory close of S$358.6m. This was due to a human data entry error in transactions through its ERP system during the migration of production.
Headwinds from data error and slow recovery
- - Read this at SGinvestors.io -
- We cut our FY23/24 PATMI forecasts for AEM by -232% and - 34% respectively. While we believe the worst is over for AEM, we now see a substantial recovery only in FY25E.
- We are also disappointed by the internal processes which led to such a basic error. As such, we downgrade AEM to HOLD with a lower target price of S$3.26 (from S$3.76) based on a lower blended 13.0x FY24/25E P/E from 13.5x.
Human data entry error led to inventory shortfall
- - Read this at SGinvestors.io -
- Management has put in place a new team after its COO left and is currently improving its internal inventory, stock monitoring and tracking systems.
- We expect an S$18-25m impairment in AEM's FY23E results, likely leading to a loss.
FY24E recovery muted, high hopes for FY25E
- 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.maybanktrade.com.sg/.
Jarick Seet Maybank Research | https://www.maybank-ke.com.sg/ 2024-01-17
Read also Maybank's most recent report:
2024-08-14 AEM - Still A Long Way To Recover – Downgrade To SELL.
Previous report by Maybank:
2024-05-09 AEM - 2H24 Hopes Diminish; Downgrade To HOLD.
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
