Aem holdings has progressed quite positively for the past 6 months despite profits being lesser compare to last year for 9M. Since Q3 result was announced, the share price has risen and it reflected the positive sentiment in market. Let’s recap what events had happened for past months.
Firstly, Temasek holdings has become their substantial shareholder with a director on board.Having a reputable sovereign wealth fund as a shareholder strengthens the reputation of AEM holdings and therefore improve their chance of getting more sales from new customers as it gives them a vote of confidence.
It was announced that they have just got a new customer. Getting sales from a new memory customer was a breakthrough. It probably tells us that customer is appreciative of the benefits on System level test that AEM is offering to them compare to their competitors. As more customers realised SLT is going to be important and with AEM perhaps being superior for their SLT technology, I am quite hopeful of more sales to come from other new customers.
Increased in revenue was mentioned by the management during Q3 business update. With this increases in revenue, Q4 result could be the starting point for better quarters ahead. So we should see visibility for better sales in 2022. Early next year, I will be looking forward to their sales estimation for 2022.
Increased in cash to 200mil and strengtheningthe balance sheet. With hard solid cash on hand, it could be put into good use such as M&A which will be synergy to their current product range.
So much so for the positive signs, we should also be aware about its risks too. Bear in mind that it is in a cyclical industry, and with their major customer still contributing 90% of their total revenue, there are risks around as always. Once there is a slow down in the semiconductor industry, the whole industry will likely take a hit. Hopefully and think that will not happen soon because we still see ongoing chip shortages situation with more fabs planned to be built in coming years and demand for electronic usage trends such as EV, 5G, AI, smart factories, cities, are still going strong at the moment.
In short, as long as SLT is recognised to be increasingly important and it is technically superior than it’s competitor, there are still more exciting times ahead for AEM to grow and capture more market share.
Above are just my own opinion and could be wrong, please dyodd.
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