AEM Holdings - DBS Research 2020-05-08: Higher Sales Guidance

AEM HOLDINGS LTD (SGX:AWX) | SGinvestors.io 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.



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 | Singapore Research Team DBS Research | https://www.dbsvickers.com/ 2020-05-08
SGX Stock Analyst Report HOLD MAINTAIN HOLD 2.870 UP 2.470



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