Broker Name: DBS
Date of Report: June 2024 (inferred from references to November 2024 and FY25/FY26 guidance)
Excerpt from DBS report.
Report Summary
- AEM’s FY25 net profit grew 48% year-on-year to SGD17.1mn, exceeding expectations, supported by strong demand from AI/HPC customers and robust operating cash flow.
- FY26 revenue guidance is SGD460–510mn, implying about 21% growth, anchored by continued ramp-up with key AI clients and higher orders from Intel. Memory test diversification is progressing, with material contributions expected from FY27 onwards.
- AEM is well-positioned to benefit from multi-year AI demand, with advanced test solutions suited for increasing semiconductor complexity. Legal uncertainties are expected to have less impact as earnings improve.
- DBS maintains a BUY rating, raising the target price to SGD3.30, reflecting both earnings growth and multiple rerating, and noting the discount to peers. FY26 net margins are expected to rise to 6.9%.
- Test peer companies trade at higher Price/Earnings multiples, further supporting AEM’s rerating potential.
Above is an excerpt from a report by DBS. Clients of DBS can be the first to access the full report from the DBS website: https://www.dbs.com.sg
