AEM HOLDINGS LTD (SGX:AWX)
AEM Holdings - Higher Sales Guidance
- Higher FY2020F sales guidance of S$430-445m.
- Orders on hand of S$416m for delivery in FY2020F.
- Potential upward revision in AEM's sales guidance; but we choose to remain cautious.
AEM's FY2020F sales guidance raised by 17-19%.
- AEM Holdings (SGX:AWX) has raised its FY2020F sales guidance from S$360-380m (on 25 February) to S$430-445m (+17-19%). As of 4 May 2020, it has received orders worth S$416m for delivery in FY2020F (+23% from its previous update of S$338m).
Maintain HOLD with a higher Target Price of S$2.87.
- We have observed favourable developments in the industry (spike in demand for server chips and notebooks) and its key customer (improvement in yields in its 10-nm chips and capacity expansion plan of 20%). However, we maintain our HOLD recommendation on limited upside and uncertain economic backdrop.
Potential to revise sales guidance upwards.
- Given its track record of four upward revisions in sales guidance last year, there is a possibility that AEM could further raise its current FY2020F sales guidance. However, we prefer to err on the side of caution amid the weak economic backdrop caused by the COVID-19 pandemic.
- See AEM Holdings Share Price; AEM Holdings Target Price; AEM Holdings Analyst Reports; AEM Holdings Dividend History; AEM Holdings Announcements; AEM Holdings Latest News.
Where we differ:
- We are cautious on AEM’s outlook given the uncertainty surrounding the COVID-19 pandemic.
Potential Catalysts:
- Stronger semiconductor equipment billings, increased sales guidance, acquisitions, new revenue streams.
Lee Keng LING
DBS Group Research
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Singapore Research Team
DBS Research
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https://www.dbsvickers.com/
2020-05-08
SGX Stock
Analyst Report
2.870
UP
2.470
