AEM shares hit record after stellar H1 results

Singapore

SHARES in AEM Holdings hit a record high on Tuesday, after the semiconductor play on Monday reported a 147.9 per cent increase in its first-half net profit to S$55.3 million.

The counter hit an intra-day high of S$4.23, before easing to S$4.19 by the closing bell, advancing S$0.53 or 14.5 per cent on a cum-dividend basis. This is the highest the stock has been since its listing back in December 2000. Some 25.1 million shares changed hands, making it one of the most heavily traded counters on the Singapore bourse for the day.

AEM's H1 earnings were lifted by higher revenue, a favourable product mix and operational cost efficiencies. Revenue rose 81.7 per cent to S$273.7 million on an increase in sales orders from existing and new customers. Earnings per share swelled to 20.15 Singapore cents for H1 2020, from 8.25 Singapore cents a year earlier.

The group has proposed an interim dividend of five Singapore cents per share, representing a payout of 25 per cent for H1 2020. It had paid two Singapore cents in the same period last year. The dividend will be paid on Sept 11.

KGI Securities, which has an "outperform" recommendation on AEM, raised its target price to S$4.60 from S$4.24.

In a research note on Tuesday, KGI analyst Kenny Tan noted that AEM has revised its sales guidance for FY2020 upwards by another S$30 million to the range of S$460 million to S$480 million. He added that the company has affirmed that fiscal 2021 will see a "ramp-up of next generation test handlers".

CGS-CIMB, which has an "add" call on the counter, also raised its target price - to S$4.63 from S$3.58 - to factor in the new guidance.

Shares of AEM are up 107.4 per cent this year. Bloomberg reported last month that the counter had become the best performer in the 107-member FTSE ST All-Share Index - the broadest measure for Singapore stocks.