Insight Provider, CrossASEAN Research

Nicolas Van Broekhoven

Insight Provider

CrossASEAN Research

At CrossASEAN Research we strive to produce unbiased and differentiated on the ground insights on companies across South East Asia. Our Research is produced for the most part after face to face meetings and conversations with company management to dig deep into the long term vision and strategy of the companies we cover. We seek to deliver investable and actionable themes on sectors and markets across SE Asia, often in collaboration with other Insight Providers across the region, pooling the vast experience of the analysts within the Smartkarma Ecosystem. We also offer bespoke work and tailor made trips for our clients. 

Insights across South East Asia

Equity Bottom-Up

<ul>
<li>
<a href="https://www.smartkarma.com/entities/aem-holdings-ltd" target="_blank" data-smartkarma-citation="entities:11019:1" rel="noopener">AEM (AEM SP)</a> published dismal 1Q24 results and kept its modest guidance for 1H24.</li>
<li>AEM has announced new customer wins going into FY25 which should improve results materially next year. The sell-side has downgraded estimates aggressively making room for upside surprises next year.</li>
<li>AEM has seen an implosion in investor confidence because of the inventory issues, and slow orders from its key customer <a href="https://www.smartkarma.com/entities/intel-corp" target="_blank" data-smartkarma-citation="entities:16764:1" rel="noopener">Intel Corp (INTC US)</a>. Long-term investors should accumulate here. </li>
</ul>



AEM (AEM SP) published dismal 1Q24 results and kept its modest guidance for 1H24.
AEM has announced new customer wins going into FY25 which should improve results materially next year. The sell-side has downgraded estimates aggressively making room for upside surprises next year.
AEM has seen an implosion in investor confidence because of the inventory issues, and slow orders from its key customer Intel Corp (INTC US). Long-term investors should accumulate here. 


AEM Holdings: More Short-Term Pain; Highly Attractive Valuation for Long-Term Investors

<ul>
<li>
<a href="https://www.smartkarma.com/entities/aem-holdings-ltd" target="_blank" data-smartkarma-citation="entities:11019:1" rel="noopener">AEM (AEM SP)</a> reported FY23 results which showed a decline of 45% in annual revenues and a small loss on the net income line. Guidance is only given for 1H24.</li>
<li>Senior management will forego all bonuses, the CFO departs and the old CEO is coming back as a consultant. AEM's stock closed down 20% after the FY23 results publication.</li>
<li>A potential new Trump presidency would push an "America First" agenda likely benefiting Intel and indirectly AEM in a big way.</li>
</ul>



AEM (AEM SP) reported FY23 results which showed a decline of 45% in annual revenues and a small loss on the net income line. Guidance is only given for 1H24.
Senior management will forego all bonuses, the CFO departs and the old CEO is coming back as a consultant. AEM's stock closed down 20% after the FY23 results publication.
A potential new Trump presidency would push an "America First" agenda likely benefiting Intel and indirectly AEM in a big way.


AEM: Cautious Guidance, but AI Exposure Highlighted and Company Could Benefit from Trump Re-Election

<ul>
<li>
<a href="https://www.smartkarma.com/entities/aem-holdings-ltd" target="_blank" data-smartkarma-citation="entities:11019:1" rel="noopener">AEM (AEM SP)</a> released record 2H21 results which indicate <a href="https://www.smartkarma.com/entities/intel-corp" target="_blank" data-smartkarma-citation="entities:16764:1" rel="noopener">Intel Corp (INTC US)</a> ramp continues as expected. Management expects more of the same in FY22.</li>
<li>
<a href="https://www.smartkarma.com/entities/intel-corp" target="_blank" data-smartkarma-citation="entities:16764:1" rel="noopener">Intel Corp (INTC US)</a> has a variety of issues but it will spend massive amounts of cash to keep up with rivals. <a href="https://www.smartkarma.com/entities/aem-holdings-ltd" target="_blank" data-smartkarma-citation="entities:11019:1" rel="noopener">AEM (AEM SP)</a> remains a major beneficiary.</li>
<li>Fair value unchanged at 8 SGD, or 78% upside from current 4.5 SGD share price.</li>
</ul>



AEM (AEM SP) released record 2H21 results which indicate Intel Corp (INTC US) ramp continues as expected. Management expects more of the same in FY22.

Intel Corp (INTC US) has a variety of issues but it will spend massive amounts of cash to keep up with rivals. AEM (AEM SP) remains a major beneficiary.
Fair value unchanged at 8 SGD, or 78% upside from current 4.5 SGD share price.


AEM Holdings: 2H21 Revenue Acceleration to Continue into FY22. Fair Value Maintained at 8 SGD

<a href="https://www.smartkarma.com/entities/aem-holdings-ltd" target="_blank" data-smartkarma-citation="entities:11019:1" rel="noopener">AEM (AEM SP)</a> reported results which disappointed the market. See my latest insight for more details <a href="https://www.smartkarma.com/insights/aem-temporary-weakness-creates-buying-opportunity-going-into-new-product-cycle-as-of-3q21" target="_blank" data-smartkarma-citation="insights:51051" rel="noopener">AEM: Temporary Weakness Creates Buying Opportunity Going into New Product Cycle as of 3Q21. </a>As a result the stock is now lower by 1% YTD.Over the past week the company has been buying back shares almost every day. Does this signal a bottom?  We looked at similar episodes in 2019 and 2020 and conclude that when the company is aggressively buying it is a pre-cursor of strong share price performance going forward. Unlike some US companies which are perennially buying back their own stock <a href="https://www.smartkarma.com/entities/aem-holdings-ltd" target="_blank" data-smartkarma-citation="entities:11019:1" rel="noopener">AEM (AEM SP)</a> is very specific in their timing and it usually reflects management sentiment that AEM is undervalued.Bottom line: while 2Q21 results might not be glorious we expect strong performance in 2H21 and into 2022. Management was very clear on the call "big" new customer wins by 2022 are very likely. If AEM can prove other big customer wins outside <a href="https://www.smartkarma.com/entities/intel-corp" target="_blank" data-smartkarma-citation="entities:16764:1" rel="noopener">Intel Corp (INTC US)</a> this would be a game-changer and increase its M&amp;A appeal going forward. Fair Value remains unchanged at 5 SGD (43% upside from 3.5 SGD).

AEM (AEM SP) reported results which disappointed the market. See my latest insight for more details AEM: Temporary Weakness Creates Buying Opportunity Going into New Product Cycle as of 3Q21. As a result the stock is now lower by 1% YTD.Over the past week the company has been buying back shares almost every day. Does this signal a bottom?  We looked at similar episodes in 2019 and 2020 and conclude that when the company is aggressively buying it is a pre-cursor of strong share price performance going forward. Unlike some US companies which are perennially buying back their own stock AEM (AEM SP) is very specific in their timing and it usually reflects management sentiment that AEM is undervalued.Bottom line: while 2Q21 results might not be glorious we expect strong performance in 2H21 and into 2022. Management was very clear on the call "big" new customer wins by 2022 are very likely. If AEM can prove other big customer wins outside Intel Corp (INTC US) this would be a game-changer and increase its M&amp;A appeal going forward. Fair Value remains unchanged at 5 SGD (43% upside from 3.5 SGD).

AEM Holding: Aggressively Buying Their Own Stock; Historically Pre-Cursor to Strong Performance

<ul>
<li>AEM had a bizarre announcement on Sunday evening the 14th of January 2024: inventory was "lost" on the way to Penang from its Singapore factory.</li>
<li>Given AEM's stellar corporate governance reputation up until now, this raises more than a few eyebrows: how is this even possible? </li>
<li>4Q23 results, due in a month, will feature a large restatement of FY23 results and lead to a major earnings loss. Any recovery is delayed into FY25.</li>
</ul>


AEM had a bizarre announcement on Sunday evening the 14th of January 2024: inventory was "lost" on the way to Penang from its Singapore factory.
Given AEM's stellar corporate governance reputation up until now, this raises more than a few eyebrows: how is this even possible? 
4Q23 results, due in a month, will feature a large restatement of FY23 results and lead to a major earnings loss. Any recovery is delayed into FY25.


AEM: When Inventory Fell off the Truck On the Way to Penang...

Singapore

AEM Holdings Limited designs and manufactures semiconductor manufacturing equipment and related tooling parts and precision machining of components for semiconductor industry.  The Company also manufactures and distributes electronics, engineering, chemical and related products. AEM provides engineering services.

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AEM (AEM SP)

AEM Holdings: More Short-Term Pain; Highly Attractive Valuation for Long-Term Investors

AEM posted a very weak quarter. Business should improve dramatically by FY25. Long-term investors should accumulate aggressively on current weakness.

Nicolas Van Broekhoven

AEM: Cautious Guidance, but AI Exposure Highlighted and Company Could Benefit from Trump Re-Election

AEM has had a horrific start to FY24. Inventory issues, CFO and COO departures, and a weak business outlook. FY24 guidance was weak and visibility...

Nicolas Van Broekhoven

AEM Holdings: 2H21 Revenue Acceleration to Continue into FY22. Fair Value Maintained at 8 SGD

AEM continues to deliver solid results. FY22 guidance points to another record year for the company. AEM remains major beneficiary of Intel Capex...

Nicolas Van Broekhoven

AEM Holding: Aggressively Buying Their Own Stock; Historically Pre-Cursor to Strong Performance

AEM Holdings has been aggressively buying back stock in the last week. History teaches us this is a pre-cursor to strong share price performance...

Nicolas Van Broekhoven

AEM: When Inventory Fell off the Truck On the Way to Penang...

AEM's credibility with investors took a blow when it reported that some of its inventory "fell off the truck" during transport from Singapore to...

Nicolas Van Broekhoven

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