AEM Holdings - CGS-CIMB Research 2021-05-04: Management Optimistic On Outlook

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

AEM Holdings - Management Optimistic On Outlook

  • We deem AEM's 1Q21 net profit at 12.6% of our full-year expectations as in line since we expect earnings to be 2H21 loaded.
  • AEM has guided that FY21F revenue could be in the range of S$460m to S$520m.
  • We reiterate our ADD call on AEM with a target price of S$4.63. We have yet to pencil in CEI (SGX:AVV)'s financials into our forecast.



A breather after a record 1Q20

  • AEM (SGX:AWX)'s 1Q21 revenue fell 45.4% y-o-y/3.9% q-o-q to S$80.2m compared to a record 1Q20 revenue of S$146.8m. Net profit fell 63.5% y-o-y/26.5% q-o-q to S$13.2m versus the record S$36.1m in 1Q20.
  • We deem AEM's 1Q21 revenue (15.2% of ours/14.4% of consensus FY21F forecast) and net profit at 12.6%/12.8% of ours/consensus FY21F expectations to be line as AEM has guided for a stronger 2H21 versus 1H21.
  • AEM expects 1H21 financial performance to be weaker y-o-y.


Sufficient tailwinds to support earnings

  • On outlook, AEM has guided that FY21F revenue is expected to be between customer diversification efforts, AEM has been in deep technical optimistic on the prospects of its business with Intel (INTC US) and also highlighted the possibility that there could be meaningful revenue contributions from other customers in FY22.


Reiterate ADD






William TNG CFA CGS-CIMB Research | https://www.cgs-cimb.com 2021-05-04
SGX Stock Analyst Report ADD MAINTAIN ADD 4.630 SAME 4.630



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