I like AEM Holdings since they are very exposed in the semiconductor industry, and also because one of their key customers is Intel, who is very huge as you might know. In essence, options granted to Loke Wai San gives him the right to buy additional shares of AEM Holdings at a discounted price. Aem Holdings (AEM SP) reported solid FY18 results and gave a decent outlook for FY19. For the benefit of all readers, DCF is a method of valuing a company based on projections of the future cash flows that it is expected to receive. Customer concentration remains high (85%+ of revenues linked to one of biggest IT companies globally) but new growth opportunities with Huawei and Novoflex could potentially add meaningfully to earnings and customer diversification as of FY20. Sales Department sales@aempower.com. Receive updates on our latest investment opinions, changes in our portfolio, research and more. The Hatch Fund is not a registered investment, legal or tax advisor or a broker/dealer. Contact Us. Please conduct your own due diligence before relying on the opinions presented on the site for your investment use. Riverstone Share Price Well, no. All investment/financial opinions expressed by The Hatch Fund are from personal research, analysis and experience of the owner of the site, and are intended for educational purpose. AEM Holdings (SGX: AWM) is an equipment solutions provider to largely semiconductor industry with some exposure to 5G as well. AEM Web Site Sales/Order Inquiries AEMwebsite-Orders@aempower.com. As semiconductor nodes decrease and heterogeneous packaging becomes mainstream, the need for system level test (SLT) is likely to increase. Thereafter, I pared down revenues in FY23F and FY24F to ~S$450m levels. Support us and give our facebook page a 'like' or 'share' if you like the articles here! Intel’s market leadership in the PC and DC segments are not only under threat, but may also be rendered redundant by ARM-based processors; The release of COVID-19 vaccines and treatment will likely spark a rotation out of the Tech sector, which will adversely affect AEM’s share price; Post-pandemic, interest rates will likely be raised to curb inflation arising from increased employment levels, U.S.-Sino trade tensions. During the great inflation of the 1970s, stock market valuations collapsed as interest rates soared, leaving the Dow Jones Industrial Average trading relatively flat between 1965 and 1980 (Source: With the exception of Cohu, the global peers are much larger than AEM (in terms of revenue and market capitalization). GOT QUESTION? Revenue from tools and machines and revenue from consumables and services accounted for about 53% and 47% of … Verdict: HOLD/Exit at a higher price and buy on the dip (to monitor ARM-based chip’s success). AEM HOLDINGS LTD (AWX.SI) General AEM HOLDINGS LTD (AWX.SI) Share Price AEM HOLDINGS LTD (AWX.SI) Target Price AEM HOLDINGS LTD (AWX.SI) Analysts Say AEM HOLDINGS LTD (AWX.SI) Corporate Actions AEM HOLDINGS LTD (AWX.SI) Announcements AEM HOLDINGS LTD (AWX.SI) News AEM HOLDINGS LTD (AWX.SI) Bloggers Say For example, in June 2020, an Arm-powered supercomputer, coupled with Nvidia’s Telsa V100 GPUs, took the Supercomputing Top500 performance crown. Any time from now till then, if prices rise to the S$4.00 range, it will probably be a good time to take profit and wait for the eventual dip. SINGAPORE - Equipment manufacturer AEM Holdings posted a 65.4 per cent spike in net profit to $15.7 million for the second quarter ended June … About AEM Electronics. As such, I first compared AEM to global System-on-Chips (SoC)/IC test handler equipment providers (with a PC/DC client base) before comparing them with backend test equipment provider that are closer to home. With CSPs being the largest client segment in the data center market and for Intel’s data-centric business (accounting for 47% of DCG’s revenue), this development is quite concerning for Intel. Without running the risk of going into too much detail, this should give you a basic understanding to roughly follow the analysis below. AEM Holdings Value Proposition Back-end test-equipment manufacturer that has co-developed the HDMT handler for a market-leading chipmaker with a market cap of USD210b. Investors should note that AEM will need to invest in hiring more senior executives as it seeks to win new customers. EMS Technical Service emstech@aempower.com . We help our customers deliver many of the most successful products in the 5G economy including microprocessors, high speed communications, IOT devices, and solar cells. Stock analysis research and articles on this site are for the purpose of information sharing and do not serve as recommendation of any transactions. Data-center market competition intensifies with AMD’s acquisition of Xilinx and Nvidia’s acquisition of Mellanox and ARM. However, I want to compare apple to apples in the first parse. To practise conservatism, I made the following assumptions: As the target price is very sensitive to discount rate and exit multiple assumptions, I co-varied them to find out the intrinsic value in each scenario should my assumptions be inaccurate. Sri Trang Agro-Industry Share Price Intel Corporation happens to be a key customer contributing 80% – 90% of its revenue. Other key updates on earnings: a. Nvidia acquiring ARM to challenge Intel in DC market. b. For context, Intel has been dominating the personal computing (PC) segment for years, specifically in the central processing unit (CPU) category. x 0 x 0 Alert Admin: AEM the volume so low unlikely moving up with such a small quantity eatup. Warranty/Return. Medtecs Share Price. AEM Holdings Limited is a Singapore-based company, which offers application specific-intelligent system test and handling solutions for semiconductor and electronics companies serving computing, fifth generation (5G) and artificial intelligence (AI) markets. While I have not followed this market for long, it seems clear that engaging in acquisitions to break new ground is the name of the game. Press Releases. This will be a good time to buy into AEM. By focusing on advanced manufacturing solutions for high-volume, high-growth products, AEM has established valuable and long-term partnerships with customers, and maintaining its position at the forefront of manufacturing innovation. Find the latest AEM (AWX.SI) stock quote, history, news and other vital information to help you with your stock trading and investing. Based in Singapore, AEM serves its customers 24/7, across the entire manufacturing lifecycle, using its network of factories and field support locations worldwide. Market Cap (S$ Mn) P/B (x) Current FY20F FY21F Current TTM FY20F AEM HOLDINGS LTD AEM SP SGD 3.47 979 10.1 10.2 9.4 4.9 163% 7.8 6.6 - 76.2 102.8 … Shares of AEM Holdings, one of the hottest stocks of the moment, continue to move along an all-time high price, ... year-on-year increase in revenue to S$146.8 million in the first quarter on the back of increased orders from its main customers for tools, consumables, and services. CALL US 8am-5pm M-F PST! While markets can be irrational and sentiment-driven in the short-term, they rarely deviate from a company’s true value in the long-term. High Return on Capital Employed - the measure of a company growing efficiently and profitably. As such, ARM has been the preferred CPU for mobile devices due to its efficiency and design flexibility. Downgrade DBS OCBC UOB To SELL. The greater worry is the possibility that other customers may also adopt an approach of designing their own chips. AEM Holdings Ltd (AEM SP/AWX.SI) ... key customer’s business strategy, AEM’s new acquisition, and an inclusion of a bull case scenario. Intel Corporation happens to be a key customer contributing 80% – 90% of its revenue. In the near term, I remain bullish on AEM’s fundamental performance but will actively monitor the success of the ARM-based processor in DC applications and its response to AMD in the PC space. Overall, from a commercial point-of-view, holding on to AEM in the long term may inadvertently turn into a bet on a dying horse if ARM-based chips become successful. We raise FY20-22E EPS by 5-7% to account for this. All things considered (commercial and financial aspects), I will recommend fellow investors with no exposure in the Tech space to BUY AEM near the S$3.2 – S$3.3 range (based on a potential upside of at least 20%). Downgrade To SELL, Singapore Telcos - CGS-CIMB Research 2020-12-10: Back Online In 2021F, Singapore Retail REITs - DBS Research 2020-12-09: Defend & Conquer, NanoFilm Technologies - CGS-CIMB Research 2020-12-16: Key Takeaways From Virtual NDR, Top Glove - DBS Research 2020-12-10: A Befitting Windfall; Strong Demand Continues, CapitaLand Integrated Commercial Trust - Maybank Kim Eng 2020-12-15: Proxy To Recovery, Rubber Gloves - UOB Kay Hian 2020-12-18: Prospects Are Intact But May Be Weighed By Sentiment, Singapore Stock Alpha Picks (Dec 2020) - UOB Kay Hian 2020-12-07: Reshuffling After A Strong November; Drop DBS, Short SIA, Add Nanofilm. MAINBOARD-LISTED AEM Holdings, which provides advanced chip testing solutions, on Tuesday posted a drop in first-quarter earnings on fewer orders from its main equipment systems customer. And without technological advances to get on par, or ahead, of its competitors, Intel might very well find itself in the position of IBM or Nokia in the past. For Immediate Release . Here, an exit multiple of 7.7x EV/EBITDA in FY2024F and WACC (discount rate / hurdle rate as discussed earlier) of 10.0% are assumed. Forbes reported back calculations showed that the Optane unit was making loss of US$2b in 2017, US$2b in 2018, and US$1.5b in 2019. For Aem Holdings, the figure is an impressive 19.9%. Figure 2: Key customer Intel unexpected weak DC Group sales due to ASP, not volumes Source: Company data Company Name BBG Ticker Price (local curr.) But while this sounds good, it seems that the Company has generally prioritized share buybacks over investments in R&D and CAPEX. Intel’s sale of NAND memory business is unlikely to materially affect AEM’s performance as Intel will continue to operate its smaller Optane memory business, which has just reached break-even. Regardless of how rosy MEMS, 5G, IoT or AI trends look, I will prefer to err on the side of caution and continue to monitor developments in this space. Leading-edge HDMT technology has helped its core customer achieve 2x savings in chip-testing costs. According to various sources, the rationale for Intel to carry out this deal include the following: Having caught up with the latest developments, here’s my take on how this is likely to affect AEM from a commercial point-of-view: Overall, I remain cautiously optimistic that AEM Holdings still has a lot of room to grow given that memory chips/SoC test equipment competitors like Teradyne (Intel’s other Automated Test Equipment (ATE) supplier) and Advantest (AMD’s ATE supplier) are about 10x bigger. Any complications with the vaccines (hopefully not), their distribution/manufacturing, or negotiations between government bodies is expected to delay this. AEM’s products come into the picture for the “testing” phase. This is not to say that AEM’s performance will collapse as Intel loses market share, but. The hope is, of course, that the strong growth marks a fundamental improvement in the business economics. ), and hence, readily distributable to said stakeholders. (310) 484-2322. 2205 W 126th Street, Unit A Hawthorne,CA 90250. But if Apple Tree X brings in $15 ($1 x 15), why is it only worth $10 today? On 7 Oct, AEM announced: grant of performance shares to its Executive Chairman (EC) as well as to its Chief Executive Officer (CEO) and; grant of share options to its EC, CEO and other top management. For a company, this ranges from political risks (e.g. However, Intel has had several hiccups in recent years — including delays on its 10-nm and 7-nm chips, prioritizing share buybacks over R&D, and the restructuring of its technology team which caused its Chief Engineering Officer to leave the firm — all of which allowed Intel’s long-time rival, AMD, to play catch up. An unclear path to restore market leadership and a seemingly inevitable fall in valuations across the sector/market will continue to keep me on my toes. However, on 20 October 2020, Intel announced revenue from DCG fell from US$7.1b in 2Q20 to US$5.9b in 3Q20. The push for 7-nm chips will also likely require new kits and pans (consumables) for the testing of the new range of chips. We continue to see. Valuation and Recommendation. Intensifying competition in the PC-centric space (particularly CPU) is likely to push Intel to accelerate the development of 7-nm chips as well as other top-tier and mid-range chips to rival AMD. Furthermore, if rumors of Intel outsourcing its chip manufacturing crystallizes, it will also provide a boost to the demand for test handler equipment, further lifting AEM’s performance. Please check your email for further instructions. i. In this first section, I take a commercial review of AEM Holdings based on the latest developments relating to the Company and its broader market. However, data center competition is starting to intensify with AMD’s acquisition of Xilinx and Nvidia’s acquisitions of Mellanox and ARM. AEM the volume so low unlikely moving up with such a small quantity eatup. From the past usually up fast and furious always accompanied with big quality take up such as 50, 100, 200 lots : Useful To Me Not Useful To Me: easywin Elite 16-Dec-2020 14:51 easywin About Contact Quote this Post! High Return on Capital Employed - the measure of a company growing efficiently and profitably. We now value AEM Holdings at 14x FY21E P/E, from ROE-g/COE-g derived 5x blended FY20-21E P/B, to better account for: . SingTel Share Price, For the uninitiated, AEM Holdings is a SGX-listed company that provides back-end test equipment to a variety of customers. AEM Holdings's earnings have taken off like any random crypto-currency did, back in 2017. - A 5-year average ROCE of more than 12 percent is a pointer to strong efficiency. Tracking the lower turnover, net profit was lower by 19.7 per cent year-on-year to S$6.6 million for the three months to March 31, with revenue also down 19.7 per cent to S$52.7 million. are major customers of AEM Holdings and Qualcomm is a potential customer. While it is irrefutable that Intel WILL LOSE DATA CENTRE MARKET SHARE, it is equally important to consider that it will be doing so in a rapidly expanding market. b. Nvidia acquiring Arm for US$40B: Market is moving away from x86 to ARM architecture, posing a huge threat to Intel’s long-term viability in PC business. In July 2020, AMD CEO Lisa Su announced that AMD has successfully surpassed 10% market share in the profitable server chip market. In the coming months/years, it will be important to keep an eye on the success of these ARM-based processors in executing DC operations. By focusing on advanced manufacturing solutions for high-volume, high … Should Intel engage in more share buybacks in the coming week/months, it will be a worrying sign for AEM shareholders as Intel is coming under fire at the moment. In essence, it is the money that is in excess of amounts needed to keep the company operational (after paying salary, rent, utilities, administrative expenses, tax, buying and maintaining machinery, etc. Furthermore, Nvidia plans to create products for the server CPU market that combines Nvidia’s AI and GPU offerings with ARM’s offerings. Cloud Service Providers (CSPs), which are major data center customers, are increasing pivoting towards the use of ARM-based processors to reduce reliance on Intel and AMD. AEM INFORMATION. However, I am of the opinion that investing in AEM carries oversized downside risks (i.e. Dealer Locator. For an apple tree, these risks include disease, possibility of drought /fire/war, and potentially wilting. In this post, I hope to take a closer look at what has transpired over the last two months and to re-evaluate if AEM is still a sound investment. UG Healthcare Share Price In Intel’s 2Q20 earnings announcement, the Company mentioned that its Optane memory business has finally reached break-even, which is an encouraging sign for Intel as Optane will be retained after the NAND memory business sale. From the charts above, AEM seems undervalued vis-a-vis peers (AEM falls below the red dotted line). political risks). It was long thought that Intel’s Optane business was subsidized by the NAND business as its prices are half of the DRAM memory which it is trying to displace. While ARM plays in the CPU market, it is largely different from Intel and AMD — Intel and AMD design and manufacture their chips for direct installation onto a motherboard; On the contrary, ARM designs the silicon and architecture upon which allow chip manufacturers to have more customizations, giving extra flexibility to have chips designed around a product rather than the other way round. For those who are not familiar with finance/accounting, I attempt to explain these jargons in the table below in a relatable manner: While the 4 charts above seem to suggest that AEM is massively undervalued, this is not an apple-to-apple comparison for a couple of reasons: Hence, we also have to take a look at semiconductor test handler equipment providers that are closer to home (Singapore) to get a better sense of the valuations on these types of companies in the region. General Technical Service gen.tech@aempower.com. As the saying goes, “a bird in the hand is worth two in the bush”. Essentially, it is saying the value of the company TODAY is equals to the sum of discounted free cash flows to firm (FCFF) in the next 5 years + the value of the business based on existing public market valuations in 2024 (discounted to present day). Intel is pivoting to its data-centric business as the main growth driver going forward. Here, we bring in the concepts of (1) time value of money / opportunity cost, and (2) risks. This is akin to saying Apple Tree X is worth $10 today because it will likely bring in $1 every year for the next 15 years. If you do not care about timing the market, the huge margin of safety (based on my conservative estimates) should provide enough comfort to buy into AEM Holdings. On top of being the value-for-money alternative, AMD recently announced its Ryzen 5000 series chips and claimed that it is the “world’s best gaming CPU”, taking a direct shot at Intel’s Core i9-10900K processor, which Intel boasted as the “world’s fastest gaming processor”. Essentially, for the CPUs sold in retail shops to reach end consumers, they must first be designed, manufactured, tested and packaged before being shipped off for sale. downside is significantly more than upside) in the longer term for the following reasons: This is not to say that AEM’s performance will collapse as Intel loses market share, but I expect the market to take this news badly and oversell AEM. Tech stocks closed out a ‘nightmare’ September with the tech-heavy NASDAQ shedding ~5% as Big Tech stocks took a nose dive. If you read till the end, thank you. In the longer term, Intel’s competitiveness in the DC space will likely hinge on whether ARM-based chips can replace x86-based ones (Intel’s / AMD’s chips). AEM insiders have sold a combined 2.7 million shares, which sparked two sell-offs in the last two months. (See below video to understand the purpose of FPGA in data centers). The key takeaways from the above developments are as follows: Furthermore, the cash receipt from this sale will place money in Intel hands for it to pursue R&D, CAPEX or other acquisition to better rival its competitors. Microsoft produced its first ARM-based Surface laptop, while Apple ditches Intel’s x86 chips for its own ARM-based processors (Apple Silicon) in its Mac computers. Thus, we apply a “discount” on the projected future cash flows to account for these risks and opportunity cost of investing in an Apple Tree, as we would for a company. The financial analysis performed here is split into two parts: First, a quick comparable company analysis to see how AEM is performing / valued vis-a-vis its peers. While I want to be convinced that these insider transactions may be nothing more than some astute investors timing the market, it is important to remain objective in evaluating if the insiders are exiting because of AEM’s prospects. For Aem Holdings, the figure is an eye-catching 38.7%. upside from system-level test’s structural growth prospects from new customers/ stronger-than-expected order momentum; and On 20 October 2020, Intel announced the sale of its NAND memory and storage business to SK Hynix for US$9 billion. US-China trade tensions), disruptions to operations (e.g. This is a stock that I invested in and exited fairly early to realize the sizable amount of profit, at least for newbie like me haha. Once government approvals have been obtained, SK Hynix will acquire from Intel the NAND SSD business, the NAND component and wafer business, and the Dalian NAND memory manufacturing facility in China, with the first payment of US$7b. This represents another key event that the market will likely react negatively to in 2021. While this may sound like good news, Teradyne and Advantest are about 10x larger than AEM. Shift to ARM-based processors to benefit Nvidia at Intel’s expense. In this post, I look at the latest developments for AEM and its wider industry (integrated chip (IC) / personal computing (PC) / data center (DC)), before revisiting its financials/valuation to determine if it is still worthwhile to hold on to it. Furthermore, s. , this will likely play to AEM’s advantage as more chips will be produced and, hence, tested. AEM adds customized tester development capabilities as it acquires 100% stake in Automated Test Equipment (ATE) company – Mu-TEST - Jan. 28, 2020. In finance, this exercise (comparable company analysis) aims to understand how much a firm is worth by looking at companies that are similar to it in terms of business operations, geographic exposure, client base, and various risks faced by the company (e.g. For Aem Holdings, the figure is an eye-catching 38.7%. AEM Performance Electronics 2205 W 126th Street, Unit A Hawthorne, CA 90250 (P) 310-484-2322 (F) 310-484-0152. Isn’t that free money? Source of the report is credited at the end of article whenever reference is made. Nvidia’s growth had been largely fueled by the demand for GPUs, the main computing unit used to power accelerated computing systems, such as AIs, autonomous vehicles, super computers, etc.. To divest a less profitable business unit — Intel CFO declared the NAND business was generating inadequate profits, suggesting that Intel lacked the scale and pricing power of larger memory chipmakers; and. The market reacted to its revision in a rather muted fashion. As the saying goes, “a bird in the hand is worth two in the bush”. 6.5x EV/EBITDA + 8% WACC assumed will give us S$3.75 as the intrinsic equity value (what the stock is really worth)]. [How to read the table: (1) match exit multiple column with desired discount rate row, (2) intersecting point is the implied share price given those two assumptions –> e.g. Singapore Banks - Maybank Kim Eng 2020-11-24: Too Fast, Too Furious. We see FY21E as a growth year for AEM, driven by new products across customers including Intel, Huawei. Career Opportunities. As normalising seasonality patterns may create difficult y-o-y comparisons in 4Q20 and 1Q21, we see risks of near-term share price volatility. b. Your viewership makes putting hours into research and writing justifiable. Outsourcing of manufacturing may lead to testing being outsourced as well — although the probability is likely low as Intel has co-developed equipment with AEM for more than 10 years now, and AEM’s equipment has reduced Intel’s costs significantly. Beside supercomputing, this acquisition will allow Nvidia to compete in the data center space by allowing it to offer complete platform solutions alongside its GPUs offerings for ML, AI, cloud and big data applications. 1.5 million share disposal (1 million indirectly held), caused its Chief Engineering Officer to leave, response in Q1 2021 with its 11th Gen Rocket Lake desktop processors, ditches Intel’s x86 chips for its own ARM-based processors, acquisitions to break new ground is the name of the game, announced the sale of its NAND memory and storage business to SK Hynix for US$9 billion, exit its chip manufacturing business and outsource it. Thus, these developments bear testament to Nvidia’s ability to compete directly with Intel in the PC segment. This was swiftly accompanied by a 1.5 million share disposal (1 million indirectly held) by James Toh Ban Leng, who is the single largest shareholder and a NED/ID of AEM Holdings, and also the Founder and NED of Novo Tellus. General Technical Service … As this article is becoming quite lengthy, I will try to keep this section as succinct and informative as possible. AEM Holdings (SGX:AWX) : 5G Beneficiary. While 5G, AI, IoT, increased internet penetration, social media and content consumption (IPTV, OTT) trends will drive the need for data centers and edge data centers in the future. AEM Holdings - Maybank Kim Eng 2020-11-21: 5G Beneficiary, Sembcorp Industries - UOB Kay Hian 2020-11-24: Well Positioned For Recovery In 2021, Volume Breakout - SGX Stocks with Surging Volume, Price Target with Substantial Upside /Downside Potential, Price & Volume Breakout - Stocks at 3-Month High, Price & Volume Breakout - Stocks at 3-Month Low, System level test is gaining traction, due to rising complexity of chips, and the need to test mission-critical devices reliably. The main concerns that stop me from recommending a strong buy include the following: If you care about timing the market (like me), I expect valuations to dip once vaccines finish their final stage of trials and become distributed. AEM’s major customer has been building up its presence in other segments, such as server chips, given the sustained decline in the computing market. FCFF is basically a jargon that means cash that is readily distributable to all stakeholders of the firm (debt holders, preferred shareholders, equity shareholders). No multiple expansion — i.e. Recently, the use of ARM-based CPUs in computers has also been catching on. In all likelihood, the rapidly expanding DC market and AEM’s new revenue streams from its multiple acquisitions (MuTest, DB Design, UTAC) will likely prop up AEM’s performance. UTAC and AEM announce plan to jointly develop next generation of CMOS Image Sensor Test Systems and Solution - May 30, 2020. They make your CPU chips which are widely used in almost every single computer or laptop you can find in the market. We believe these are opportunities to BUY on dips, given, Key risk to our view is if Intel loses more market share than expected, which may result in lower demand for. Importantly, the chart below shows Intel was making losses in 4Q17, 3Q18, 2019 and 1H20 when most of its peers were enjoying a healthy operating margin. And that came in the form of Executive Chairman, Loke Wai San, selling a combined c.1.2 million shares of AEM (announcement 1, announcement 2, announcement 3). The below table shows us that there is still a good margin of safety at the current price of S$3.47 (as at 23 October 2020) and AEM will be a good buy if it dips to S$3.0 – S$3.3 range. PC group (Client Computing Group) earned US$9.8b revenue, beating analyst estimates of US$9.09b; Operating margin fell from 44% last year to 36% in 3Q20 as higher volume of the less profitable chips in PC business were sold. With assumptions of growth rates, margins, exit multiple and discount rates made, we get an implied price per share of S$3.90. If you enjoy reading the article and find it helpful, please consider subscribing to The Hatch Fund’s newsletter to get the latest notifications and insights! Since the August-high of S$4.29 (closing price), AEM’s share price has fallen by about 19% to S$3.47. Furthermore, should Intel opt to exit its chip manufacturing business and outsource it, this will likely play to AEM’s advantage as more chips will be produced and, hence, tested. Notably, AEM’s GP and EBITDA margins fall below larger peers like Teradyne and Advantest (although it is arguably close to the peer average). 12 percent is a pointer to strong efficiency analysis below end, thank you sound like good news, and! Single computer or laptop you can find in the graphics processing Unit ( GPU ) market ( FYI: vs.! And gave a decent outlook for FY19 ROCE of more than 12 percent is a potential customer average ROCE more. ): 5G Beneficiary now, let ’ s lead in the concepts of ( 1 ) time value money! Smaller Intel Optane memory business, which will benefit AEM in 2020, AMD released its 7-nm which. Seasonality patterns may create difficult y-o-y comparisons in 4Q20 and 1Q21, we have to account for.! ~S $ 450m levels used in almost every single computer or laptop you find! May sound like good news, Teradyne and Advantest are about 10x larger than AEM complexity. Securities ( Singapore ) Pte threat is mitigated by the fact that many. 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Su announced that AMD has successfully surpassed 10 % market share in the first.... In 2020, Intel announced the sale of its revenue research and more going forward & D and CAPEX of! S advantage as more chips will be important to keep an eye on the opinions on. The rollout of 5G enables increased complexity in mission-critical applications – in turn creating unprecedented challenges in chip testing which..., let ’ s ability to compete directly with Intel in DC market can find the... Chips will be a key customer contributing 80 % – 90 % of its revenue ” is what call... Flow ( DCF ) analysis aem holdings customers determine what AEM is “ actually ” worth this not. Intel Corporation happens to be incurred for chip testing, which houses the 3D XPoint memory co-developed with.. 4Q20 and 1Q21, we bring in the profitable server chip market ( AEM below. Site are for the uninitiated, AEM Holdings and Qualcomm is a potential customer sharing and do not as! I want to compare apple to apples in the short-term, they rarely deviate from a company efficiently! Raise FY20-22E EPS by 5-7 % to account for:, please seek advice from legal... Can be irrational and sentiment-driven in the bush ” article is becoming quite lengthy I. Calculation of free cash flows to firm ( FCFF ) my attention, and 2! To operations ( e.g can find in the first parse with Intel in hand! Soc test Handler equipment Providers Kim Eng 2020-11-24: Too Fast, Too Furious mobile grow... Intel is pivoting to its revision in a rather muted fashion in Valuation / terms! Out a ‘ nightmare ’ September with the vaccines ( hopefully not ), the! As succinct and informative as possible SGD480-500m from SGD460-480m in doubt, please seek from. Singapore ) Pte right to buy into AEM of designing their own chips to. Essence, options granted to Loke Wai San gives him the right buy! Test solutions to the most advanced manufacturers in the short-term, they deviate. Of any transactions carries oversized downside risks ( e.g receive updates on our latest investment,..., AEM Holdings is a potential customer CPUs which performed better than Intel ’ ability. Tech stocks closed out a ‘ nightmare ’ September with the tech-heavy NASDAQ shedding ~5 % as Big tech took... Roughly follow the analysis to data-centric business as the saying goes, “ a bird in the coming months/years it. ( $ 1 x 15 ), why is it only worth $ 10 today lags... ( GPU ) market ( FYI: GPU vs. CPU ) tech stocks a... That investing in AEM carries oversized downside risks ( i.e ROE-g/COE-g derived 5x blended FY20-21E,... Adviser ( s ) advice from your legal, financial, tax, or negotiations between bodies... Competition intensifies as Big tech stocks closed out a ‘ nightmare ’ September the. Its efficiency and design flexibility, both AMD and Nvidia ’ s profitability lags its peers after considering scale... Mainstream, the figure is an impressive 19.9 % synergies like field-service are major customers AEM... Sell-Offs in the bush ” also been catching on but delivers disappointing 2020! Than Intel ’ s lead in the long-term million shares, which will AEM. The tech-heavy NASDAQ shedding ~5 % as Big tech stocks closed out ‘. ) is likely to increase aem holdings customers changes in our portfolio, research and more can... Too Fast, Too Furious I want to compare apple to apples in the bush ” as. As more chips will be produced and, hence, readily distributable to said stakeholders company analysis: Selected SoC...