AEM

America’s largest semiconductor companies:

1) Nvidia
2) Broadcom
3) AMD
4) Texas Instrument
5) Qualcomm
6) Intel
7) Applied Materials
8) Analog Devices
9) Lam Research
10) Micron

Thanks to visual capitalist for this awesome infographic.

The list below (only America) has a total market value of over US$2 Trillion. And it covers a broad range of spectrum… From chip designers to IDMs to frontend wafer fab equipment makers… to players specialising across many verticals from memory to telecommunications to automotive.

Interestingly, many of them have got offices and facilities in Malaysia! From the massive Lam Research new facility you pass by on mainland when you cross to the new Penang bridge toll, to AMD / Intel buildings on the island.

In Stockbit over the years, the community have shared some of the supply chain players of these giants.

From $INARI / 0166 (INARI AMERTRON BERHAD) and their main client Broadcom
$SAM / 9822 (SAM ENGINEERING & EQUIPMENT (M) BERHAD) and Applied Materials / KLA / Onsemi
$SGX-AWX AEM and Intel
$UWC / 5292 (UWC BERHAD) and it’s potential client Lam Research
$penta and clients like Onsemi (among others)

The list goes on and on.

In other words, whilst the current semiconductor trend is down in most parts (some in the AI trends are up), there’s so much value on the table, across different diversities - where, when the tide turn around once more, this is a sector that will probably has the most excitement in.

Economy and businesses goes in cycles. Key is to identify those who will ride the down cycle with least damage cos they’re fundamentally steady, and those who prepare themselves well for the next coming upcycle.

【下一个科技明星股AEM】
$SGX-AWX

📍内容概括：
0：58 ：科技行业展望与三大巨头
2：40 ：Intel与AEM永科科技
4：09 ：大股东Temasek& EPF加入
4：25：公司最新业绩
5：05：股价恢复2大因素
6：05：外围与内部风险在哪里？
6：39：估值如何

完整内容：
https://cutt.ly/t1MLefm

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$SGX-AWX revises its revenue guidance UPWARDS, despite the current market condition, and largest customer Intel cutting capex guidance.

In the statement, it says: upwards to between S$820 million and S$850 million as a result of increased demand from NEW AND EXISTING customers.

AEM share price had been battered 22% in the past week alone, following the general market condition / sentiment on worldwide tech manufacturing & semiconductor sector.

Whilst the worry of "peak earnings" for FY22 could be real due to Intel predicaments, I take comfort that their diversification efforts seems to be coming into fruition to unlock new revenue streams.

A simple back of napkin calculation... of SGD835m at 15% NPM means FY2022 profit of SGD125m. Currently AEM is trading at 7.9x 2022 fwd earnings. A bargain?

@eugenekhoo888 @maxtan @zhexiangxd @Jay888 @mengteck @FIRLGuys @wsoh @kt93 @asheryap @khaijiunnlim @Jinnsern @JXWK0116

In this week's podcast, we have a returning guest, @Ryunanda from Stockbit on his investment performance in 2022, thoughts on recession and how to prepare for it, FED hiking rates, Ukraine Russia war, employment situations, stocks like $SGX-AWX, $MYNEWS / 5275 (MYNEWS HOLDINGS BERHAD), $TEXCHEM / 8702 (TEXCHEM RESOURCES BERHAD), Gloves ($SGX-AP4) and many more!

https://cutt.ly/6CrorgI

$SGX-AWX AEM (SGX) - HSBC the latest one to initiate coverage on the company. Fair Value more aligned to my own @ SGD 6.60 or 15x FY2023 earnings.

Unfortunately only have this screenshot sent by a friend and not full report. if anyone has them please share!

Lastly, in a news released yesterday, Intel, Brookfield to invest up to $30 bln in Arizona chip factories - another good news for AEM. Source: https://cutt.ly/5XZ8on1

cc: @wsoh @ValinV @zhengyou0705 @mengteck @Jinnsern @FIRLGuys @khaijiunnlim @asheryap @JXWK0116 @zhexiangxd @Jay888 @maxtan @soojinhou @takanoamin

$SGX-AWX AEM (SGX) - I attended the earnings call earlier this week, there are a few new & important things to note:

- Management is confident in 2022 upgrading January guidance for second time, from what initially was SGD670-720M to now SGD750-800M.

- Revenue was 21% services, 42% consumables, and 37% in test equipment. Cash on the balance sheet grew to SGD181m

- AEM is a leader in Test 2.0 and is a pioneer in automated SLT (system level test) - important new test environment in the more complex and innovative technology in semiconductor space

- Whilst they're a pioneer in SLT, some competitors are also coming into the space. They have advantage by way of their brand name & reputation - being around for decades.

- According to study done by McKinsey, SLT industry megatrends forecast demand will grow by 8x by 2030.

- AEM believes their competitive advantage is in its full-stack solution offering. They also say the company has strong intimacy with its key customers to understand their needs and challenges.

- AEM announced the acquisition of a South Korean company (Nestek). It also signed two new customers in AI and high-performance computing. @eugenekhoo888 suggests they could be Apple and Qualcomm

- CHIPS act in USA will be positive for AEM long term.

- 1H22 margins are sustainable going into 2022 and beyond

- Optimistic of diversifying away from Intel and winning sizeable order from new clients.

- On Intel, addressable market is on its replacements as well as expansion of product / services. We know that intel is ramping up capex.

Verdict:
I like AEM's latest presentation slides - it tells alot more about the company. AEM is trading at sub 10x earnings. It's competitors, the likes of COHU / TERADYNE / KLA had recently released their results as well and are trading at premium valuations vs AEM (ranging from 15x to 25x). I'm not even considering valuations of Malaysian ATEs.

I believe AEM should be valued in accordance to their peers as they're a pioneer in semiconductor TEST 2.0, as well as starting to get the grove of diversifying their client base.

I'm staying invested.

cc: @wsoh @ValinV @zhengyou0705 @mengteck @Jinnsern @FIRLGuys @khaijiunnlim @asheryap @JXWK0116 @zhexiangxd @Jay888 @maxtan

$SGX-AWX AEM - Another quarter another record another upgrade in revenue guidance. Still cheap!

The company is at SGD83m PAT for 1H2022. They again, up their revenue guidance from 700-750m to 750-800m SGD, not surprised!

A simple annualisation gives SGD165m FY profit. At SGD1.45b market cap, the company is trading sub 10x earnings for a leading semiconductor player.

There's a briefing later. Will update more!

cc: @wsoh @ValinV @zhengyou0705 @mengteck @Jinnsern @FIRLGuys @khaijiunnlim @asheryap @JXWK0116 @zhexiangxd @Jay888

AEM (SGX) $SGX-AWX - Venturing into CMOS Image Sensor Test System Solution

Thanks to Desmond for the article.

Link: https://cutt.ly/jJ12whq

- UTAC Holdings Ltd. (UTAC), a global semiconductor test and assembly services provider and AEM, a leading semiconductor test and handling solution provider - announces a new cost-effective, next-generation test system solution for CMOS image sensors.

- Driven by the rapidly growing demand for advanced image sensors in applications such as security, automotive safety, autonomous vehicles, and industrial application, CMOS image sensor products are expected to significantly grow during the decade and beyond.

- Assembly and test of CMOS image sensors is the primary focus area of growth for UTAC. UTAC is already in high-volume assembly production for image sensor for the automotive and industrial markets.

- “We delivered our fully integrated CMOS Image Sensor Test Cell to UTAC in 2021, complete with a tester, illuminator, and handler."

~~~

CMOS Image Sensor is a product which I personally had come to understand well during my study and analysis into $AEMULUS / 0181 (AEMULUS HOLDINGS BERHAD) where they're making the tester for the company indirectly linked to Omnivision (third largest player in this space with 10% market share) to cater for the Chinese market.

From my personal analysis and having attended many briefings of AEMULUS, I got the sense of the potential size of this market segment.

AEM (SGX) now is also venturing into this vertical, and offering not just the tester, but a full set which also includes illuminator and handler.

It's yet to be seen if both are targeting the same market, but for AEM, to be positioned in this space, is good preparation for the future.

cc: @wsoh @ValinV @zhengyou0705 @mengteck @Jinnsern @FIRLGuys @khaijiunnlim @asheryap @JXWK0116 @zhexiangxd @Jay888

$SGX-AWX - Q1 2022 Record Revenue and Profit. Management upgrades revenue guidance

Some quick briefing notes.

- Revenue guidance now 700-750m SGD
- Revenue and profit had gone up sequentially for 5 quarters on the trot.
- Lots of questions from the floor were asking about revenue and profit numbers, which I dont personally fancy but Q1 revenue is already 36% of guidance. Management mentioned that 1st half revenue is heavier than 2nd half. Whilst many fund managers and analyst might take that as glass half empty, I'd say that historically speaking, management had the tendency to upgrade guidance from time to time.
- There were also alot of mentions about slight reduction in margin but I wouldn't personally read too much into it. Margin can defer QoQ plus with CEI acquisition, that business naturally will bring margin down.
- No new announcement on new customer win just yet but progress are going in accordance to plan.
- Loke Wai San believes they are in a multi-year ramp-up.
- AEM believes it is in a leadership position with regards to SLT
- Cash decreased from 216M SGD to 166M SGD to fund its working capital needs.

All in all, AEM market cap is currently at SGD1.4b; From various briefings, analysts reports and media outlets, it's fair to assume AEM is poised to hit around SGD140-160m of profit in FY2022. This indicates that AEM is currently trading at sub-10x earnings multiples.

Whilst market sentiment is weak especially on the tech / tech manufacturing front, in AEM you have a stock which is both growing in importance, as well as already undervalued.

It's never wrong to trim / take profit and follow the trend, but I'm staying invested in AEM.

cc: @wsoh @ValinV @zhengyou0705 @mengteck @Jinnsern @FIRLGuys @khaijiunnlim @asheryap @JXWK0116 @zhexiangxd @Jay888

$SGX-AWX AEM (SGX) just finished its AGM, I was not able to join but will try n get takeaways from fellow investors & share in Stockbit.

Anyhow, there's this pre AGM Q&A which had been published, which has some good insights.

I personally thought these portions interesting.

** AEM's 'test 2.0' is a more cost efficient method of test economics, able to test / have coverage beyond what is currently achievable with traditional ATE. What more, their products can be repurposed to address adjacent markets like SiC / GaN, etc...

"High-end device segments such as computing, mobility, and automotive require test coverage beyond what is currently achievable with traditional Automated Test Equipment (“ATE”) and their existing back-end test flow. The requirement to supplement back-end test with System Level Test and the resultant change in test economics is forcing manufacturers to rethink their back-end test flow and look to a Test 2.0 paradigm to realise a more cost-efficient method of test, regardless of the age of existing ATE."

** AEM mentions that outlooks is 'very positive' by way of customer Intel's significant investment, as well as new customer wins developing / in stages which is according to plan.

cc: @wsoh @ValinV @zhengyou0705 @mengteck @Jinnsern @FIRLGuys @khaijiunnlim @asheryap @JXWK0116 @zhexiangxd @Jay888

$SGX-AWX AEM (SGX) - a new initiation report, this time from CITI, valuing the company at $6.37, saying the company is “well-positioned for the next phase of business growth.”

More of the same as what we've been discussing in this thread, CITI analyst expects AEM to secure new customers from its 2HFY2022 onward and diversify its business from Intel. In addition, AEM has guided for FY2022 revenue of about $670-720 million, while Citi’s forecast stands at $703 million, 24.4% higher y-o-y. AEM’s valuations also look attractive relative to industry peers, having an FY2022 P/E ratio at about a 30% discount.

link: https://cutt.ly/9F2FYlf

This brings total coverage to 5 analysts.
CIMB: SGD 6.85
DBS: SGD 6.04
MAYBANK: SGD 6.34
KGI: SGD 4.36
CITI: SGD 6.37

cc: @wsoh @ValinV @zhengyou0705 @mengteck @Jinnsern @FIRLGuys @khaijiunnlim @asheryap @JXWK0116 @zhexiangxd @Jay888

$SGX-AWX AEM (SGX) - Germany wins big as Intel spreads chip investment across six EU countries

"Intel has picked Germany as the site for a huge new chipmaking complex, giving the first details of a $88 billion investment drive across Europe, which is striving to cut its reliance on imports and ease a supply crunch for manufacturers.

The initial spending will total 33 billion euros ($36 billion), including 17 billion euros in Germany, where the auto industry is likely to be a prime customer for cutting-edge chips that could use technology as small as 2-nanometers.."

Extracting from my original note: AEM basically manufactures test handlers (and other things) for Intel’s High Density Modular Test machines that are able to test various types of computer chips on a single machine. AEM is currently the sole supplier for this test handler product and its consumables.

https://cutt.ly/bSsQHGW

Additionally, Temasek had increased their stake during recent sell off.

cc: @wsoh @ValinV @zhengyou0705 @mengteck @Jinnsern @FIRLGuys @khaijiunnlim @asheryap @JXWK0116 @zhexiangxd @Jay888

Today, I was talking to @leonjakelim and MJ from @FIRLGuys about potentially "hidden profit" that a company could attain / add back if they don't do or invest in R&D - of which by definition entails work directed towards the innovation, introduction, and improvement of products and processes for the betterment of the company's future. Here's some examples.

$D&O / 7204 (D&O GREEN TECHNOLOGIES BERHAD) spent RM28.2m in R&D for FY21 (around 6% of revenue). If this figure is "simply" added back to bottom line, D&O would report around RM139m of profit. Their PE valuation would drop from 48.5x to 38.5x

$AEMULUS / 0181 (AEMULUS HOLDINGS BERHAD) spent SGD1.7m in R&D in the T12M period (around 2.5% of revenue). If this figure is "simply" added back to bottom line, Aemulus would report around RM15.2m of profit. Their PE valuation would drop from 34.4x to 30x

$MPI / 3867 (MALAYSIAN PACIFIC INDUSTRIES BERHAD) spent RM51.2m in R&D for FY21 (around 2.5% of revenue). If this figure is "simply" added back to bottom line, MPI would report around RM323m of profit. Their PE valuation would drop from 26.4x to 22.2x

$SGX-AWX AEM (SGX) spent SGD13.3m in R&D for FY21 (around 2.5% of revenue). If this figure is "simply" added back to bottom line, AEM would report around SGD105m of profit. Their PE valuation would drop from 14.2x to 12.5x

$VIS / 0120 (VISDYNAMICS HOLDINGS BERHAD) spent RM5.3m in R&D for FY21 (around 11% of revenue). If this figure is "simply" added back to bottom line, VIS would report around RM15m of profit. Their PE valuation would drop from 12.4x to 8x

Other interesting companies to watch over as well are the likes of Elsoft and Vitrox. They would release their total R&D figure normally together with fully audited statements. Just for some context, FY20 R&D spent for Elsoft was about RM4.7m (FY21 profit RM11m). FY20 R&D spent for Vitrox was about RM48m (FY21 profit RM170m).

Interesting food for thought. Thanks, MJ.

$SGX-AWX, AEM (SGX) - Record Quarter for both Revenue and Net Profit, beat FY 2021 guidance last updated in November. AEM is trading at an undemanding valuation of sub 10x Forward PE

Previous record revenoue for AEM was Q32020 where they hit SGD161.8m; Previous record net profit for AEM was Q12020 where they hit SGD36.1m...

In Q42021, AEM hit SGD227m revenue and SGD39.1m net profit (+68% QoQ, +61% YoY, +8% prev record high)

On FY basis, AEM beat topline guidance (again...) by SGD15m. Company guided for SGD720m for FY2022 (+27%). The strong topline was due to the company delivering previously mentioned volume ramp up for their new generation System Level Testing handlers, Burn-In Test handlers and peripheral tools, and the consolidation of CEI Limited.

AEM also has SGD216m in cash / SGD 135m in net cash (10% of market cap), of which utilisation of cash in bank and from operation had been used for 1) dividend (paying 5c this quarter), 2) share buybacks 3) acquisitions 4) R&D (4% of revenue)

AEM is a prime beneficiary of Intel's massive expansion; is close to securing new important & significant clients from their new platforms and is currently trading at undemanding valuation of 10x forward PE, whilst its peers in developed markets and neighboring Malaysia are trading at much much higher valuations.

It's not everyday you can find a growing company within the semiconductor supply chain trading at this valuations. Stay invested and accumulate upon weakness.

cc: @wsoh @ValinV @zhengyou0705 @mengteck @Jinnsern @FIRLGuys @khaijiunnlim @asheryap @JXWK0116 @zhexiangxd @Jay888

$SGX-AWX, AEM (SGX) - gave a FY2022 revenue guidance last week of SGD670-720m

A few things to note:
- AEM management usually place themselves on the safer side when giving top line guidance and thus beats and have to up their guidance year after year
- The past 5 years average Net Margin usually hovers at the mean and median of 16%
- This place AEM to potentially earn SGD115m in PAT in 2022
- This is record profit per annum
- This means that the company is currently trading at 13x PE of FY2022 PAT
- 5 years mean PE of AEM stands at 20x whilst median PE stands at 16x; global based peers are all trading at much higher multiples. No need to mention Malaysian peers cos their valuation is even higher
- In 2022 there are multiple catalysts for us to be bullish on the company - from Intel ramping up capex to high chance of significant new customer win.
- Stock had declined 6% since this announcement
- This stock can be termed as both "value and growth" stock simultenously???

cc: @wsoh @ValinV @zhengyou0705 @mengteck @Jinnsern @asheryap @JXWK0116

$SGX-AWX - US chipmaker Intel to invest US$7 billion or RM30bil in new facility in Malaysia according to MIDA

The Malaysian Investment Development Authority, in a media invitation, said Intel Corporation had chosen Malaysia to expand manufacturing capabilities for its advanced semiconductor packaging technologies in the northern state of Penang.

~

This news is huge for alot of tech manufacturing players / sector in Malaysia. Who are the beneficiary? I reckon there will be aplenty but we know that AEM (SGX) supplies solutions to Intel, which includes Test Handlers, Wafer Handling Systems, Laser Marking, Laser Deflashing, Vision Inspection and Unique Handling Systems.

In plain summary, AEM manufactures test handlers (and other things) for Intel's High Density Modular Test machines. And they have done so for years and developing (and delivering) new modules currently.

Exciting times ahead!

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

*$AEM (SGX) $SGX-AWX - Moving strongly post result. Investor briefing summary.

Institutional funds seem to be pouring in after positive investor briefing on 11/11/21... I had 3 friends attended and here are some summary:

1) Management mentioned FY22, each QR will be similar to Q3/Q4 result. This mean Q3 and Q4 FY21 numbers will become the norm for FY22. This is very bullish

2) No supply constraints as of now, AEM purchasing department has navigated all difficulties thus far

3) Expecting to land several "meaningful new client" wins in 2022. Meaningful definition: at least 5-10% of quarterly revenue. Recall that AEM mentioned in the QR report that it is working with 10 out of the 20 largest semiconductor companies. These discussions are at various stages but looks like things are close to finalisation

4) Management mentioned there will be no conflict of interest IF they win Nvidia as customer as each solution is customized. Perhaps only AMD customer win would be viewed negatively (conflict of interest).

5) Addressing on its market or TAM with Intel, it's clarified that TAM is both replacement of machines as well as the expansion of products/services.

6) Continues to look for M&A but the first focus is on expanding sales and technology team.

7) On why AEM didnt hire more sales guys to increase their market share - management answered that their approach through close engagement with end user to understand what is their need and what is the best solution for them. And then to do deep engineering with them. Through this engagement, they can go very big like what we had with intel.

8) Friend also note that there were 70-80 pax in attendance, unlike usual briefing which was below 50 usually.. and with many new insti faces. The power of temasek as a shareholder!

——

In summary, The first point is very important and one the market doesn’t seem to fully priced in yet. With low range guidance target of sgd525m revenue this year, q4 revenue target is sgd190m... If this is extrapolated to fy2022, we are looking at sgd750m revenue. At a standard (and conservative) net margin of 15%, we are looking at above sgd100m PAT.

A 20x multiple points at a FV of Sgd7 and beyond.

Catalyst for higher multiples:
- AEM market cap above usd1b, attract more insti funds
- temasek as largest holder, a board representative with huge experience. Ex AMAT
- Soon to be Removal of key client risk
- medium term visibility from Intel capex expansion
- US peers bar Cohu (like kla teradyne etc) are trading above 20x fwd pe. Forget abt Malaysia valuation - which will lead us to 40x multiples haha.

____

Lastly, those who wish to tune in and listen to management directly by themselves can do so tmr at 12pm. There's a free webinar.

Register here: https://bit.ly/3xa5oG7


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

Malaysia Tech Stocks - 4 Stockbit community favorite stocks hit all time high last Friday.

1) $SGX-AWX AEM SGX - hit sgd4.80 on Friday on the back of solid Q3 result and an extremely bullish sounding management briefing - to which management upgraded guidance for Q4, and reiterate that Q4 result can be sustainable in 2022. The volume traded was one of the highest of the year, indicating that institution flow could be coming in. In my opinion, this stock remains a personal Top Pick.

2) $INARI / 0166 (INARI AMERTRON BERHAD) - hit RM4.05 on the back of confirmed news that it’s an ADD to the MSCI Global Index at the end of this month. It’s expected to have about USD150m passive flow coming in buying around 150m shares of the company. To cap the day off, it reported a record profit of RM107m, first time it reached 9 figures in a single quarter. Inari is the largest tech manufacturing stock in Malaysia and is the prime beneficiary of key themes such as 5G adoption, continued growth in smartphones and semiconductor. Inari will keep progressing and hitting higher quarters and in my opinion is a HOLD to BUY, there’s still upside and potential re-rating once it’s included in a couple of indexes.

3) $PIE / 7095 (P.I.E. INDUSTRIAL BERHAD) - hit RM4.28 on the back of positive momentum and demand of its services. The fact that it’s moving beyond Nintendo (despite its recent headwind of cutting production due to chip shortage) is also a good news. PIE had a strong momentum post some media article released at the end of last month highlighting its connection to EV business in Thailand. From friends in and around manufacturing line, I got to know that PCB manufacturing / PCBA / SMT business is booming and the players in this space are in high demand. It's no wonder local pcb companies such as $SCOPE and $GUH is heavily trending as well. However valuation wise, the company is currently trading at premium vs it’s peers and in my opinion is pretty much fairly valued in the short term for FY2021. ATAIMS result paints some challenges such as labor shortage, supply chain disruptions that it might face.

4) $KOBAY / 6971 (KOBAY TECHNOLOGY BERHAD) - hit RM5.89 on the back of.. general good sentiment? Being pushed higher due to private placement exercise? Or due to Bitcoin hitting extreme high levels? Recall that kobay won a new client in high level assembly for advanced data server - machines, which my educated guess says are used for Bitcoin mining.. personally have sold all but 10% of Kobay. For contract manufacturing, I prefer SAM.

All in all, pretty sure the tech manufacturing sector had served many investors well in 2021. Is it expensive and overvalued? Definitely. And as valuation goes higher & higher, there needs to be constant check & rebalancing, and to stay invested in those that offers bigger moat and growth prospects. Congrats to all stockbitors that invests in these names.

@kimkuan @JXWK0116 @asheryap @cyliew @ValinV @zhengyou0705 @wsk20 @Jasonsum @tgku22 @chieqi

$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

@weiboy90 just have a quick glance on the stock's key stats. 1) Shenzhen expressway currently trading at 4.5x PE with 6% div yield. Its historical PE can support 8x multiples and 2 analysts covering the stock is giving it HKD11 fairvalue. But this is an , infrastructure play in China and not sure if can be considered as "recovery" play as China has sort of recovered much earlier than the rest of the world.

@weixiang98 on 2) NAGACORP Having some chinese blood in us, I think regardless of regulations, you can't easily take the habit of gambling - something which has sort of became a culture or even a tradition - out of the Chinese haha.

Talking about foreign stocks... @Jay888 @mengteck 3) $PENTA / 7160 (PENTAMASTER CORPORATION BERHAD) HK had moved strongly the past week!

@mokrhutar179 @zhexiangxd @Jay888 @mengteck @zhengyou0705 on 4) PC PARTNER - yummy dividend payment came to pass. The stock also had an analyst coverage recently from Sunwah Kingsway. The article mentioned:

"Riding on the high demand of gaming GPU, we’re confident in the shipments of 2H21-2022. We expect rev/np for FY21E to reach HK$ 15,777 m/ HK$ 2,193 m. The counter is currently trading at ~1.3x FY21E P/E with potential payout ratio at 40% (dividend yield 30.3%), which we think is undemanding. We suggest investors to accumulate on any weakness.."

The stock is also at -20% pullback from the peak while $BTC is nearing all time high. Whilst this is a highly volatile stock with extreme short cycle, I almost bought the stock again. Suffice to say I will not be selling the remaining of my balance PC Partner just yet.

Other interesting foreign stocks I'm keeping an eye on is: 5) $SGX-5WH REX International listed in SGX. The story is very similar to $HIBISCS / 5199 (HIBISCUS PETROLEUM BERHAD) (bought Repsol field) - yet it's trading at lower valuation whilst oil price remain strong.

6) $SGX-AWX AEM valuation remains undemanding when it's in the middle of INTEL's aggressive expansion drive and new customer win.

Lastly 7) TSLA - I've personally added more position here - second BUY transaction in 2021.. Funny enough, personally quite pleased wf the fact that this year the share price is consolidating after crazy bull of 2020.

Intrinsically the business value has actually gone up through continuous performance beats n development milestones while the stock market price is sort of “stagnant” from where it end last year. Hopefully the pattern continues (business progress catching up to share price / valuation). @facademy @shaun723 @HerculesJr

$DNONCE / 7114 (D'NONCE TECHNOLOGY BHD) - Super odd volume + Datuk Tho Selling out. What's going on?

Like everyone else in this thread, the events happening around DNONCE over the past few days baffled me. The volume did not make sense from the business point of view. While the company is seeing Sadao plant's new machineries / expansion finally running and commissioning for heathcare sector, DNONCE other business segments in Malaysia could be disrupted from various MCOs within the coming quarters.

Hence another possible reason for the spike in volume would be some major announcements coming - either contract wins of some sort - but the earliest announcement we got this evening, is that the CEO selling out his shares.

Thinking aloud, there are a few possible explanations (If you guys have any other thoughts and theories - do share it along). The crux of the matter is, Datuk Tho disposed 4m shares, pocketing a profit of RM1.5m from the transaction. (From publicly available info, he acquired 4m shares at roughly 0.233 avg price between Feb-Nov 2020). Honestly, the optics do not look good, but lets try to rationally explain why this happened.

1) Explanation 1: Management failing to deliver its promises to grow the company or some sort of fraud / scandal is happening.

2) Explanation 2: There's a potential change in ownership of the company - something that's not unthinkable for a PE (private equity) run company, and much of the volume of late is exchanging of hands between old and new shareholders.

[For number (2) above, We can see something similar happened in AEM $SGX-AWX (sgx), another PE run company - whom Novo Tellus, after turning around the company - distributed its AEM shares to its IPs, this lead AEM not held by a single entity who owns double digit % ownership]

If one remembers the history of DNONCE's turnaround, Blackstream Investment is the sole largest shareholder, a PE fund from Singapore. They're also the one whom appointed Datuk Tho onto the management to turn the business around from the previous owners. The sellout from Datuk Tho could indicate that there could be a change in ownership of the company; and if it really happens, his position could become untenable.

I personally think explanation 1 is unlikely the case for now. I could be wrong but I believe the management did well to turn the company around in FY 2021. If management is failing to deliver growth as promised, there's really no need to sell out but continue trying. The fraud narrative imo just don't jive well with the conservative management.

All in all, it's going to be interesting to continue and observe what will happen to DNONCE. Don't make rash decisions and stick to your trading / investment plan.

cc: @terence775 @ndt25 @andyyap1993 @jasonhow @tgku22 @Peggylian @pineforestof89

AEM Holdings $SGX-AWX - Post Result, Temasek Investment and Investor Briefing Note

About 1.5 weeks ago, AEM Holdings announced 1H 2021 result and subsequently announced a 103 million SGD investment by Temasek. The "soft" result is not a surprise and expected by many as management had guided for a stronger 2H 2021 derived from its next generation products and tools for Intel.

Additionally, I attended the briefing, here are some key takeaways:

1) AEM again reminded everyone that they had been in talks with more than 10 of the top 20 global semiconductor manufacturers on both equipments and consumables. Different clients are at different stages of engagements. Some are still in the lab stage, some in verification / validation stage while others are in production stage. I believe AEM is very close in securing a new customer win and this would be a big catalyst to re-rate the company which up to today, is somewhat being held back from concentration risk.

2) Chairman Wai Sun & CEO are both excited about ATECO (subsidiary)'s customer win in the memory space. This had lead AEM having engagement with those customers.

3) Revenue Guidance in tact, its backed by orders and inventory levels. Risk to derail the guidance is supply chain disruption.

4) Chairman Wai San had no comment about future listing elsewhere to close the valuation gap, but it does seem like something they're well aware. Personally won't be surprised if AEM will be dual listed in Nasdaq post achieving usd1b valuation. do note that SGX and NASDAQ in 2020 agreed to make dual listing easier between the 2 exchanges.

5) A big chunk of the briefing was to touch on Temasek's investment. Temasek will now be AEM's largest investor at 9.5%. In the call, many asked on why did they do it, what synergies to come out of this and what the money will be used for. CEO highlights 2 important matters apart from having more money to the balance sheet:
a) Temasek investment highglights that they believe in the long term growth story of AEM and more importantly, the innovation / the highly differentiated offering AEM has. CEO Chandra Nair explained that Temasek Understood the important changes in the industry and believed in AEM's ability to deliver to the market to do a new way of testing… More on System Level Testing later on.
b) Temasek's strong network will help to bring their products into the market and hopefully will help general valuation of the co in the long term, as more n more companies working wf their products n solution. Mr Russel from Temasek now sits on the board. He had a vast experience and strong network in the industry, and is an ex - Applied Material, working there for decades.

More M&A will happen as well if it's in line with their roadmap.

6) System level test. Both Loke Wai San and Chandra Nair went a great length to explain why AEM is the best at SLT, even when comparing with Advantest and Teradyne. Chandra Nair on SLT:

"AEM is probably the only company in the world with over a thousand systems that have been running for a decade -- of course various versions of it and we continue to deploy new versions -- so we probably have the most experience of any company in the world in what it takes to do system level tests..

Now, as system level test is becoming a need and not a want right -- I mean not just good to have -- it is becoming an absolute need for companies that provide high performance computing, application processors that are used in things like mobility devices and so on and of course in the automotive space, these companies have to make sure that they can test in volume before their chips go out to the market or to their end customer..

Our track record to be able to deliver highly reliable testers is one part of our differentiator. The next part is the fact that over the last three years we have invested tremendously in the future of system level tests, so we have the world's leading active thermal controllers..

What this means is, as chips become more complex, as the power and heat dissipation needs of these complex chips are very hard for companies to handle, we probably have the best solution for our customers to be able to do this active thermal control that they need, the ability to test reliably in volume..

And the fact that we continuously invest in meeting the future needs of the customer are probably some of the biggest differentiators..

In addition to the technology that we bring, the pedigree and the reliability we bring, is also the fact that we have a very strong presence of field engineers all over the world, where they are very close to the customer, understanding their needs and at the customer sites 24/7 to ensure reliability, and understanding what are the bottlenecks they see, feeding that back to our engineering teams and us continuously improving the solutions our customers get..

In addition to that, as one goes into system level tests, as each company comes out with their own application-specific chip to service their end users, there's a strong embedded DNA in our company to be able to take these common technology pillars, configure them together and create the exact test system that is perfect for that customer's use..

Most other companies come from the other side of the spectrum where they say this is the standard product, and really you need to make your tests meet our needs. That storyline now does not fly with the customers because as they do system level tests on highly application specific chips themselves, they need companies that can address their needs to be able to customize where needed and quickly..

So this is where companies like CEI that we acquired this year, we can have a very quick turn to be able to quickly design, prototype and deploy what the customer needs and this is another big differentiator in our ability to take our solutions to market and deployment..."

7) Lastly, Chairman Loke Wai San mentioned with regards to SLT, CEI acquisition and Temasek - that AEM products and services is Semi customised and structured from day one to deliver on time without downtime / stopages, to reduce the cost of test for its clients. On CEI, availability and quickturn is the keyword as to why the company embarked on this acquisition, on top of monetising the consumables in SLT. He mentioned that as in the era of semiconductor 2.0. things are going beyond moores law and going to heterogeneous integration and packaging. There's a great clarity when discussing this with Temasek on the future roadmap and challenges for frontend and backend equipment players are. They can Observe it or act upon it. The fund raise from Temasek will enable AEM to act globally upon it.

I came out from the briefing feeling optimistic. AEM is a really well run gobal company, bound for re-rating. My fair value may even be conservative once re-rating happens and when more funds are able to buy the stock.

@wsoh @Jay888 @nnahwey @andy721 @wsk20 @ValinV @khaijiunnlim

AEM Holdings SGX $SGX-AWX is moving nicely above SGD4.15 to pre Q1 2021 earnings announcement levels of SGD4.22

Also closing into the SOXX Index. Historically speaking, AEM moves quite in tandem with the SOXX index.

@khaijiunnlim @nnahwey @Jay888 @andy721 @wsk20 @terence775

Thanks for the write up! I've been holding $SGX-AWX for some time now, was fascinated by the undemanding valuation too. The latest QR was a bit of a dissapointment but many research house are upgrading outlook for the second half. You may be interested in other sgx tech counters like UMS $SGX-558 , frencken $SGX-E28 , Grand Venture Tech $sgx-jlb.

AEM Holdings $SGX-AWX Looking good technically. Broke fibo + trendline resistance level of 3.80 and then 100 days MA at 3.88

Now testing fibo 3.98. Passed that, 4.20 and all time high are next targets.

@Ryunanda good spot.

AEM Holdings ($SGX-AWX) – A Top Backend Semiconductor Company with Multiple Growth Catalysts, Trading at 10x Forward PE. One of the cheapest ATE companies around. Medium Term Fair Value at SGD 5.00

Sharing an SGX Investment Idea today.

Being an investor in the Malaysian market, tech manufacturing stocks in areas of contract manufacturing / OSAT / EMS and ATE (Automated Test Equipment) are aplenty but are usually at ridiculous valuations..

It was then extremely refreshing to find a name in the same backend semiconductor space, which has a strong balance sheet (net cash of 15% of market cap), extremely profitable (OPM in the 20%), a trusted supplier of the world’s largest semiconductor chip manufacturer (Intel) with close to 2 decades of relationship, trading at a mere 10x forward PE ratio!

Full analysis in the following attachement. Still a learner of the semiconductor sector. Do let me know if I miss anything!

Tagging some tech sector enthusiast: @wsoh @ValinV @JXWK0116 @asheryap @terence775 @Jay888 @weixiang98 @Jinnsern @andyyap1993 @TBLau

@Jay888 can look into buying TENCENT & BABA for HK names. For SGX, can look at AEM Holdings (semicon), Yangzijiang Shipbuilding (shipping) or Straits Trading Co Ltd (asset play). Will share note on AEM soon. YZJ can read this awesome blog: https://bit.ly/3y3NQL8

$SGX-AWX $SGX-BS6 $SGX-S20

@Ryunanda I actually don't think it is a silly move, it just depends on personal risk-reward preference. I am not switching to Penta HK because there is a liquidity risk there and I am afraid that Penta HK will always be traded in "liquidity discount". It will act as an additional risk to my investment (Even though now I have sold all my Penta but looking to reenter back). But on the other hand, if Penta HK start gaining attention from HK market, i belive ur return will much higher than invested in Penta MY.

For AEM Holdings, I just had a quick glance just now but what caught my attention is its acquisition on Mu- Test. Mu-Test is using FPGA as a base technology to its tester. This FPGA allow AEM to have cost advantage and customized tester to its customer. Why they can customized throught FGPA? Lets me explain FPGA in a very layman terms.

FPGA stands for Field Programmable Gate Array. FPGA consists of internal hardware blocks with user-programmable interconnects to customize operations for a specific application. The connections between blocks can readily be reprogrammed, changing the internal operation of the hardware and allowing an FPGA to accommodate changes to a design, or even support a new application, during the lifetime of the part. It can work as a microprocessor, or as an encryption unit, or graphics card, or even all these three at once.This flexibility makes the FPGA a great choice for applications in which standards are evolving, such as digital television, consumer electronics, cybersecurity systems and wireless communications, artificial intelligence (AI), data center hardware accelerators, enterprise networking and automotive advanced driver assistance systems (ADAS). A good example of FPGA use is high-speed search: Microsoft is using FPGAs in its data centers to run Bing search algorithms.

Back to AEM-MU Test, its application consists of Image sensor, digital ICs, Memories, and SOC (System on Chips). SOC means a single chips that have many fuctions like IGBT and APU. This is really interesting for me :)

$SGX-AWX $PENTA / 7160 (PENTAMASTER CORPORATION BERHAD)