AEM Holdings Ltd. (AWX) AI Stock Analysis

• Market Cap: S$579.75M
• Dividend Yield: N/A
• Average Volume (3M): 6.32M
• Price to Earnings (P/E): 42.5
• Beta (1Y): 1.70
• Revenue Growth: 4.60%
• EPS Growth: N/A
• Country: SG
• Employees: 2,372
• Sector: Technology
• Sector Strength: 88
• Industry: Semiconductors
• EPS (TTM): 0.01
• Shares Outstanding: 316,360,870
• 10 Day Avg. Volume: 7,001,170
• 30 Day Avg. Volume: 6,323,733
• PEG Ratio: -0.04
• Price to Book (P/B): 0.92
• Price to Sales (P/S): 1.18
• P/FCF Ratio: -10.75
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: S$1.63
• Price Target Upside: -10.93% Downside
• Rating Consensus: Hold
• Number of Analyst Covering: 3
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 63 Neutral
• Price Target: S$2.00 ▲(9.29% Upside)

AEM Holdings Ltd. shows a mixed financial performance with strong balance sheet stability but faces liquidity challenges. Technical analysis indicates positive momentum, which is a significant strength. However, the high P/E ratio suggests potential overvaluation, impacting the overall attractiveness of the stock.

Positive Factors

Strong Balance Sheet

A strong balance sheet with low leverage enhances financial stability and provides flexibility for future investments and growth opportunities.

Revenue Growth

Sustained revenue growth indicates robust demand for AEM's products and services, supporting long-term business expansion and market presence.

Diversified Revenue Streams

Diversified revenue streams reduce dependency on a single market, enhancing resilience against sector-specific downturns and fostering stable growth.

Negative Factors

Liquidity Challenges

Negative cash flows indicate potential operational inefficiencies and liquidity issues, which could constrain the company's ability to fund operations and investments.

Patent Infringement Allegations

Ongoing legal disputes over patents can lead to financial liabilities and distract management, potentially impacting long-term strategic focus and innovation.

Declining Profit Margins

Decreasing profit margins suggest rising costs or pricing pressures, which could erode profitability and affect long-term financial health if not addressed.

AEM Holdings Ltd. Business Overview & Revenue Model

Company Description

AEM Holdings Ltd provides intelligent system testing and handling solutions for semiconductor and electronics companies in Asia, Europe, and North and Central America. It operates through Test Cell Solutions, Instrumentation, Contract Manufacturing, and Other segments. The company offers handling solutions comprising of system level, wafer level, and packaged level tests. It also provides test manipulators, test instruments, software, and other services, as well as TestPro multifunction cable tester, network service assistant, mixed mode multi-port vector network analyzer, and WideOptix-SR4 measurement system solutions. The company serves contract manufacturing, original equipment manufacturers, and outsourced semiconductor assembly sectors. AEM Holdings Ltd was incorporated in 2000 and is headquartered in Singapore.

How the Company Makes Money

AEM Holdings Ltd. generates revenue through multiple streams, including the sale of precision engineering services and solutions, which cater to the semiconductor and electronics industries. The company derives significant income from manufacturing semiconductor test equipment, which is vital for ensuring the reliability and performance of semiconductor devices. Additionally, AEM has established partnerships with leading technology firms, which not only enhance its market presence but also contribute to joint development projects that can lead to shared revenues. The company's focus on environmental solutions also provides an additional revenue stream through contracts related to waste management and renewable energy initiatives. Overall, AEM's diversified portfolio and strategic partnerships play a crucial role in its financial performance.

AEM Holdings Ltd. Financial Statement Overview

Summary

AEM Holdings Ltd. exhibits a mixed financial performance. The income statement shows signs of recovery with improved revenue growth and profitability margins, though they remain below historical levels. The balance sheet is strong, with low leverage and a solid equity base, providing financial stability. However, the cash flow statement reveals liquidity challenges, with negative cash flows indicating potential operational inefficiencies.

Income Statement

AEM Holdings Ltd. shows a mixed performance in its income statement. The company has experienced a positive revenue growth rate of 11.19% in the most recent year, recovering from a decline in the previous year. However, the gross profit margin has decreased over the years, indicating potential cost pressures. The net profit margin has improved from a negative position in the previous year to a positive 3.01%, but it remains relatively low compared to historical performance. EBIT and EBITDA margins have shown slight improvements, suggesting better operational efficiency.

Balance Sheet

The balance sheet of AEM Holdings Ltd. reflects a stable financial position with a manageable debt-to-equity ratio of 0.19, which has improved from previous years. The return on equity has turned positive at 2.35%, indicating a recovery in profitability, though it remains lower than historical highs. The equity ratio stands at a healthy level, suggesting a strong capital structure. Overall, the company maintains a solid balance sheet with low leverage.

Cash Flow

The cash flow statement presents challenges, with negative operating cash flow and free cash flow in the latest year, indicating liquidity issues. The free cash flow growth rate is significantly negative, reflecting a substantial decline in cash generation. The operating cash flow to net income ratio is negative, highlighting inefficiencies in converting income into cash. Despite these issues, the free cash flow to net income ratio is high, suggesting that when cash is generated, it is substantial relative to net income.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	397.09M	380.41M	481.28M	870.49M	565.46M	518.96M
Gross Profit	144.94M	97.61M	129.30M	273.66M	186.65M	203.47M
EBITDA	32.92M	43.12M	40.95M	185.23M	126.71M	122.25M
Net Income	13.70M	11.44M	-1.24M	126.81M	91.95M	97.59M
Balance Sheet
Total Assets	633.75M	673.17M	707.53M	805.60M	710.50M	335.52M
Cash, Cash Equivalents and Short-Term Investments	59.79M	43.77M	101.85M	127.78M	216.18M	134.78M
Total Debt	72.93M	94.38M	126.36M	143.31M	81.27M	11.29M
Total Liabilities	150.75M	180.86M	233.14M	312.15M	307.98M	124.09M
Stockholders Equity	477.51M	485.70M	467.46M	485.05M	402.51M	211.43M
Cash Flow
Free Cash Flow	0.00	-41.70M	14.39M	-58.91M	35.23M	81.05M
Operating Cash Flow	0.00	-17.52M	40.17M	-31.43M	52.00M	86.29M
Investing Cash Flow	0.00	-8.79M	-20.09M	-38.44M	-85.22M	-29.77M
Financing Cash Flow	0.00	-31.78M	-46.91M	-19.28M	113.51M	-25.91M

AEM Holdings Ltd. Technical Analysis

• Technical Analysis Sentiment: Neutral
• Last Price: 1.83
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For SG:AWX, the sentiment is Neutral. The current price of 1.83 is below the 20-day moving average (MA) of 1.83, above the 50-day MA of 1.76, and above the 200-day MA of 1.46, indicating a neutral trend. The MACD of 0.02 indicates Positive momentum. The RSI at 50.49 is Neutral, neither overbought nor oversold. The STOCH value of 29.41 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for SG:AWX.

AEM Holdings Ltd. Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
558	73 Outperform	$1.09B	26.32	9.87%	3.01%	0.96%	-20.30%
5DD	72 Outperform	$246.09M	19.71	24.01%	3.43%	12.70%	48.43%
E28	71 Outperform	S$683.34M	17.56	9.11%	1.62%	11.57%	0.89%
AWX	63 Neutral	S$579.75M	42.53	2.87%	―	4.60%	―
Sector *	61 Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%
JLB	61 Neutral	S$317.24M	32.58	7.60%	0.32%	47.45%	51.05%
MZH	56 Neutral	S$446.43M	34.25	3.50%	0.98%	22.66%	83.49%

AEM Holdings Ltd. Corporate Events

AEM Holdings Denies Patent Infringement Allegations by Advantest

AEM Holdings Ltd. has been accused by Advantest Test Solutions, Inc. of patent infringement related to specific wafer level test systems. AEM denies these allegations, citing its own extensive patent portfolio and has engaged legal counsel to defend against the claims. The dispute follows a previous arbitration settlement in July 2023. Importantly, AEM states that the complaint will not impact its business operations or revenue guidance, maintaining its ability to serve customers effectively.

AEM Holdings Transfers 1.3 Million Treasury Shares to Fulfill Contractual Obligations

AEM Holdings Ltd. has announced the transfer of 1,322,682 treasury shares from its Share Buyback Account to fulfill a contractual obligation. This transfer reduces the company’s treasury shares from 2,740,065 to 1,417,383, representing a decrease in the percentage of treasury shares against the total number of ordinary shares outstanding from 0.874% to 0.450%. The value of the transferred shares is S$4,427,123.37, indicating a significant financial transaction aimed at meeting the company’s contractual commitments.