AEM's 1H25 revenue of S$190.3mil was up 10% y-o-y, driven by a pull-in of orders under the non-cancellable purchase order programme from the IDM customer and expansion into high-volume manufacturing for its fabless AI customer. This is in line with the company’s guidance of S$185-195mil and our estimates, representing 51% of our revised FY25 forecasts.
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1H25 revenue in line, but earnings dragged by heavy FX losses.
However, AEM recorded S$5.9mil in FX losses due to a weaker US$ relative to the S$ (vs. S$2.0mil in fx gains in 1H24), resulting in net income of S$3.1mil (+283.9% y-o-y from a low base last year given restructuring charges and loss on disposal of an associate), albeit still below our expectations given the steep hit from FX.
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Stripping out the FX losses, AEM would have delivered net margins closer to 4%, which is in line with our forecasts.
FY25 is a transitional year, with momentum building for FY26.
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Above is an excerpt from a report by DBS Group Research. Clients of DBS may access the full PDF report @ https://www.dbs.com/insightsdirect/.
