Excerpts from Maybank KE report

Analyst: Gene Lih Lai, CFA

9M19 ahead; setting up for FY20E growth; BUY

Reiterate BUY with higher ROE-g/COE-g TP of SGD2.12 (4.1x blended FY19-20E P/B, prev: 3.2x), as we raise FY19-21E EPS by 13-71%, factoring in:


Share price: 


i) AEM’s higher FY19E revenue guidance;

ii) stronger-than-expected HDMT momentum; and

iii) inclusion of contributions from hybrid project and cable testers for Huawei in FY20-21E.

9M19 PATMI already reached 95%/93% of our/consensus’ FY19E estimates.

Despite high-base effects, FY20E dynamics appear favourable for further growth.

Strong FY20E guidance would be a catalyst, while weak demand for key customer’s chips would be a key risk.

Full report here.

Excerpts from KGI report

Analyst: Tan Jiunn Chyuan (Kenny)


Share price: 


AEM’s 3Q19 results exceeded expectations. 9M19 results now form 79% of our initial 2019 sales forecast, and 96% of our initial 2019 PATMI forecast. AEM has also increased revenue guidance to S$305-315mn for FY2019

 We researched key customer wallet share amongst test equipment peers to better understand AEM’s revenue sustainability with the key customer

 We amend our revenue forecast to include the potential sales of AEM’s next generation of test handlers. Our new PATMI forecast is S$44.6/41.2/45.3 mn for 2019/2020/2021F

 Maintain OUTPERFORM. We increase our 12M Target Price to S$1.80, from S$1.34. We look forward to 6 November for management’s presentation for potential insights

Full report here.


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