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Hot stock: AEM Holdings gains 5% on news of Huawei contract

SHARES of AEM Holdings rose in active trading on Wednesday morning, after the company announced on Tuesday evening that its test solution had been selected by telecom company Huawei for use in qualifying links in its 5G network.

As at 10.12am, AEM shares were trading up 5 per cent, or four Singapore cents, to S$0.83 as 17.4 million shares changed hands, making it one of Wednesday’s most active stocks.

The tech solutions provider said on Tuesday that it had developed a test solution in collaboration with China Electronics Technology Group Corporation No 23 Research Institute for qualifying high-performance, short reach cabling links for Huawei’s 5G backhaul network. It will deliver the solution in 2019.

AEM’s executive chairman Loke Wai San said the advanced test technology and ability to customise the solution to Huawei’s needs were factors that helped get its test solution selected.

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He added: “The combined advantage of AEM’s high performance communications cabling test system and our expertise in automating the test environment will enable us to achieve the stringent quality and cost targets for 5G component testing.”

CGS-CIMB analyst William Tng, who downgraded the stock from "add" to "reduce" in his last report dated July 31, said he maintains his call on the stock for now, pending further news.