LIFETIME MEMBERSHIP Will AEM share price hit high heavens with a Nasdaq listing? Speculative rumors of a potential listing in Nasdaq had been ongoing for two years. The market rumors went into an overdrive in July 2020 when SGX and Nasdaq entered into an agreement to help companies access capital markets funding in both jurisdictions. While the company has never announced that a listing in Nasdaq is on the cards, my vision is that a listing in Nasdaq should be the endgame for AEM share price.
In my memory, the last time that a home-grown company that got listed in Nasdaq was Creative Technologies. In 2007, Creative exited Nasdaq after winning a $100 million patent dispute against Apple. In my opinion, AEM must have learned the painful lessons from the Creative saga and pivoted its business on developing innovative solutions for its customers. This means that in order for AEM to become the defacto “King of Technology”, the company must continuously develop patents to protect its intellectual properties.
Indeed, Non-executive Chairman Loke Wai San is the right man for the right job at the right time. Being trained in engineering, Loke Wai San was the man who led AEM share price out of dark Egypt when the former management of AEM was embroiled in corruption scandal in 2012. Back then, AEM share price was on the brink of collapse and the company had been placed on the SGX Watch-List since 2010.
In those dark days, Loke Wai San had to make the difficult decision of selling off the struggling substrate business and to focus on the equipment business. Arising from these challenges, many investors had written off AEM share price. But Loke Wai San saw the potential in the equipment business due to the partnership with leading US chipmaker, Intel. The decision proved to be pivotal as the partnership between AEM and Intel led to a patent for its test handling process.
The patent provides the competitive edge for AEM because of the proprietary technology used in the test handler equipment, HDMT (High Density Modular Test). While the partnership with Intel had propelled AEM share price to unprecedented levels, there will come a day when Intel will no longer rely on AEM for the test handlers. To prepare for that day, Loke Wai San’s team went on a slew of acquisitions.
The latest acquisition is ATECO Inc, which AEM paid for approximately US$3.8 million. ATECO Inc. is a South Korean company that specialises in the design and development of memory test handler solutions targeted at the memory market. The acquisition of ATECO is surprising because it came at a time when the acquisition of CEI is still ongoing. Prior to acquiring CEI and ATECO, AEM acquired Mu-TEST, DB-Design Group, Inc and Lattice Innovation Inc in FY2020.
The acquisitions are meant to expand the customers base. At the same time, it is evident that AEM is growing capabilities for its System Level Testing & Inspection (SLT-i) business division, which provides its customers user applications and standard ATE coverage with complex IC designs and advanced packaging techniques. In years to come, both Equipment Systems Solutions (ESS) and SLT-I should be the two main pillars of growth for AEM. In this article, I will share my insights on the outlook for AEM share price in FY2021.
Note that this is an opinion article and not meant to be a financial advice. Please do your due diligence or engage financial advisors before investing in the stock market. I am vested in this counter (holding 2000 AEM shares at $4.50), so my views on AEM (AWX) share price may be biased.
AEM share price to rock with Intel?
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