AEM closed on 10 Feb 2017 at $1.02. It will be a multi-bagger going
forward. In fact it was already a 3-bagger in 2016. I only discovered this gem at
the beginning of 2017 and my wife and I bought this stock in the range between $0.925 and $0.965. I wish I could have
discovered this gem much much earlier.
Stellar Financial Performance
The second quarter ended 30 June 2016 saw strong growth as revenue was
up 51.1% to S$17 million while its profit surged 186% to S$1.34 million.
It reported even more stellar third quarter financial performance on 8
Nov 2016 as the adoption of its new flagship high-density semiconductor test
handlers had taken off.
-328.6% rise in year-on-year 3Q2016 net profit after tax
-69.9% rise in year-on-year 3Q2016 revenue
-Sales order book of S$45.5 million as of 8 November 2016
-EPS rises to 5.15 cents and NAV per share rises to 59.8 cents
The uptrend suggests a further growth in FY2017.
At the close of 3Q2016, the Group's balance sheet showed total assets
of SS$42.9 million. Cash and cash equivalents totalled S$8.4 million. AEM has
funded its business primarily with internal resources, supplemented by modest
borrowings from financial institutions and its debt gearing is less than 0.4%.
Commenting on the Group's performance, Mr Loke Wai San, Chairman of AEM
said: "We are proud to be generating solid returns on the significant
R&D investments we have made over the past 5 years as we bring our
high-density test handlers to market. Our engineering team has done a wonderful
job in commercializing one of the most advanced test handlers on the market
today. We expect the demand for our test-handlers to grow substantially next
year, and our leading products and capabilities should hopefully position AEM
well in the years to come.”
Sharing Fruits with Shareholders
AEM paid a final dividend of 1 cent and interim dividend of 0.5 cent
per ordinary share to its shareholders for FY2015 and FY2016 respectively.
Sharing his thoughts, Mr Charles Cher, CEO of AEM said: "Despite
headwinds from a slow global economy, AEM continues to achieve significant
growth by delivering compelling capability and value to our customers. The
considerable effort the team had expended over the last few years in realigning
the business and investing in our future have begun to pay off and we look
forward to sustaining growth momentum in the business next year.”
Superb PE and PEG
Its trailing p/e is only at 5.3x, computed based on the closing price
on 10 Feb 2017 at $1.02.
Its PEG is at 0.0163. Simply superb!
Confidence Shown Through Rampant Company Buybacks
AEM market capital excluding its treasury shares is only about $43.6 m
based on the price of $1.09 apiece. AEM bought about 2.3 million shares (which
is about 5.4% of the company) from the open market in 2016, highest price being
concluded at $0.85. The rampant company buybacks has shown the confidence of
the management in the future growth of the company.
AEM will release its FY2017 report soon and the price will surge with
the expected stellar performance yet again. I predict the stock will double its
price and hit $2.04 by August 2017.
