AEM - UOB Kay Hian 2024-01-17: Downgrade To HOLD On Inventory Write-Downs & Limited Near-Term Catalysts

• AEM (SGX:AWX) uncovered a shortfall in its inventories due to human error in transactions in its ERP system during the migration of production to its new Penang facility.
• The shortfall is expected to have a negative earnings impact of around S$22m in 4Q23 due to understated cost of sales. As a result, we trim 2023 earnings forecast for AEM from S$14m to a S$6m loss. We also trim 2024 earnings forecast for AEM by 17%.

AEM uncovered shortfall in inventories during year-end stock-taking exercise.

• - Read this at SGinvestors.io -
• - Read this at SGinvestors.io -
• As a result of the initial findings, AEM is reviewing its inventory and stock monitoring as well as tracking processes and systems.

Expect negative earnings impact in 4Q23.

• Read more at SGinvestors.io.

Above is an excerpt from a report by UOB Kay Hian Research.
Clients of UOB Kay Hian may be the first to access the full PDF report @ https://www.utrade.com.sg/.

Read also UOB's most recent report:
2025-03-03 AEM - 2024 Earnings Above Estimates; Outlook & Valuation Remain Unexciting.

Previous report by UOB:
2024-11-14 AEM - 3Q24 Earnings Below Estimate & Outlook Remains Uncertain; Maintain SELL.

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 Dividend Payout Dates & Corporate Actions,
AEM News