In important news on Singapore stocks, shares of AEM Holdings Limited (SG:AWX) cratered nearly 21% today to hit a new 52-week low of S$2.10 per share after the company swung to a loss in H2 FY23 due to lower revenue. Owing to the loss, AEM’s board decided to suspend dividend payments for H2FY23 to enable continued investment in the business. Moreover, AEM announced the resignation of CFO Leong Sook Han effective April 16, 2024.
SGX-listed AEM Holdings engages in the designing and manufacturing of semiconductor manufacturing equipment and related tooling parts and precision machining of components. The company attributed the declining performance to the deceleration of the semiconductor industry that began in late 2022 and lasted throughout 2023. AEM expects the industry to remain sluggish until at least the first half of 2024.
Details About AEM’s Results
For the six months ending December 31, 2023, AEM posted a net loss of S$20.88 million compared to net profit of S$44.25 million in H2 FY22. This resulted in a loss per share of S$0.0676, compared to earnings per share of S$0.1423 recorded in the same period last year.
Moreover, revenue for the second half of Fiscal 2023 plunged 38% year-over-year to S$206.06 million. Declining end customer demand for computers and smartphones, coupled with excess inventory levels at retailers, negatively impacted its revenue.
For the full year Fiscal 2023, revenue collapsed 45% and net loss stood at S$1.16 million against a net profit of S$127.31 million in FY22. Last month, AEM warned of “human error in transactions” and reduced its inventory value and pre-tax profits in the Q4 2023 results due to an identified shortfall in the group’s inventories.
Dividend Halt
Meanwhile, in lieu of the halted dividend, AEM’s board has proposed undertaking a bonus share issue of 1:100, subject to a general share issue mandate to be approved by the shareholders at the upcoming annual meeting. The company also halted the bonuses for senior management, slashing the annual cash compensation by 50%.
Talking about the future, AEM forecasts the end consumer demand momentum to regain marginally from the lows of 2023 as well as inventory levels to normalize slowly. For the first half of Fiscal 2024, AEM projects revenues between S$170 to S$200 million.
What is the Forecast for AEM Holdings?
With two Buys and three Hold ratings, AWX stock has a Moderate Buy consensus rating on TipRanks. The AEM Holdings Limited share price forecast of S$3.39 implies 27.9% upside potential from current levels. Please note, all these ratings were given before the results and are subject to change.
