$SGX-AWX AEM HOLDINGS (SGX) - Good Q3 2021, management upgraded guidance for FY2021 by SGD30m suggesting even stronger Q4. One of the cheapest ATE in the region.

Recall that in the original thesis, management guided AEM will achieve SGD460-520m for FY2021.. 9 months in, company has SGD338m, and management now guiding the company to reach SGD525-550m, indicating a growing and monstrous Q4 ahead. Inventory level back this claim, as it's currently standing at SGD162m

9m 2021 net profit now at SGD53m. Whilst we know Q4 will be strong; Annualising 9m 2021 or on TTM basis, AEM is currently trading at a conservative 19x PE. It's peers in Malaysia are all trading north of 40x.

Cash and cash equivalent is healthy at 15% of market cap, and business propsect wise, the company is boosted by Intel's massive expansion plan (watch Pat Gelsinger and his aggressive tone on his plan with INTEL!) as well as potential new client. In the press media note, the company said: "Made significant progress in its technical engagements with 10 out of the top 20 semiconductor companies.." Their SLT (system level testing) is expected to do well as it's a big step up from what's already available in the market.

All in all, AEM may or may not beat 2020 numbers, but remember that was a special year. They are however, progressing in line with what they had preached in that starting in 2H 2021, volume ramp up is visible from the next gen handlers well into 2022.

AEM remains a top pick for backend semiconductor.

cc: @wsoh @ValinV @zhengyou0705 @mengteck @khaijiunnlim @Jinnsern