- AEM's 1Q25 revenue declined 35% y-o-y to S$86m. We believe AEM is still in the early stages of transitioning to new customers.
- - Read this at SGinvestors.io -
- We believe it’s still too early in this transition phase to justify its valuation and maintain SELL on AEM, based on a higher 14x from 13x blended FY25/26E P/E.
2Q25 revenue should be flat q-o-q.
- New customers have surpassed its key customer in terms of revenue. AEM's management maintains revenue guidance for 1H25 of S$155-170m, which suggests 2Q25 could be flat from 1Q25 due to the gestation period in the ramp up by new customers.
- - Read this at SGinvestors.io -
Tariffs to impact AEM's outlook for 2H25.
- Management remains wary of the tariff headwinds as it may impact 2H25 orders and the ramp-up by its new customers. The lead time for customers is normally around 3-6 months and AEM does not see any changes for now.
- The long-term outlook remains attractive and management remains confident due to AEM’s differentiation in thermal technology, a critical enabler for testing AI/HPC devices and chiplet-based advanced packages.
Valuations still lofty; Prefer Frencken.
- Read more at SGinvestors.io.
