AEM achieved 2Q2017 profit before tax of S$9.7 million, almost doubling 1Q2017's result.

This was one of the highlights of its sterling 1H17 results:


(S$ ’000)

1H2017

1H2016

Change

Revenue

104,461

29,272

256.9%

Profit before tax

14,553

2,143

579.1%

Net profit

12,349

1,579

682.1%

Net profit margin

11.8%

5.4%

6.4%


AEM Holdings

Share price:
$2.86

Target: 
$3.43

Source: CIMB

♦ Declares interim dividend of 2.5 cents per share.

♦ Guidance: AEM says its revenue and operating profit before tax for FY2017 is expected to be at least S$200 million and S$24.0 million, respectively.


AEM Holdings, a global provider of equipment systems solutions and manufacturing services, reported profit before tax of S$14.6 million for its first half ended 30 June 2017, up 579.1% from that of 1H2016.

The Group’s 1H2017 revenue grew 256.9% year-on-year (“y-o-y”) to S$104.5 million.

Much of the sales and profit growth was driven by AEM’s next generation semiconductor handler platform, which was commercially adopted by its key customer in late 2016.

Consistent with the Group’s announced sales orders for delivery in 2017, AEM reported higher revenue from its Equipment Systems business mainly due to higher equipment sales but also from a one-off catch-up sales in pans/ kits.

Historically, AEM's product mix between equipment and pans/ kits has been about 50%:50%.

2Q2017 saw that mix at 44%:56%.

However, AEM expects a reversion to the historical mix for the entire FY2017 as the commercial rollout and field installation of our handlers even out.

With the sales ramp-up, the Group was able to spread its fixed costs more effectively and thus managed to improve its net profit margin from 5.3% for 1H2016 to 11.8% in 1H2017.

At least $24 m pre-tax profit!

charlescher1.16“With our half-year performance and the sales orders recorded, we expect to achieve revenue and operating profit before tax of at least S$200 million and S$24.0 million respectively for FY2017.”

--
Charles Cher (photo),
CEO, AEM Group

Thus, 1H2017 net profit came in at S$12.3 million compared with S$1.6 million in 1H2016.

Mr. Loke Wai San, the Group’s Chairman, added, “The global semiconductor outlook for 2017 and 2018 looks positive. We continue to invest in improving our technical capabilities, delivery and field service support to better serve our main customer’s longer term roadmap and global footprint requirements.

"At the same time, we continue to be on the lookout for possible acquisition targets that are synergistic to our business.”

In June 2017, several long-only institutional funds bought vendor shares, amounting to approximately 4.2% of AEM’s issued shares.

The Group welcomes the expanding institutional shareholding support, which should bring higher levels of interest in and demand for management accountability which is a positive step in AEM’s longerterm goal for shareholder value creation.


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