LIFETIME MEMBERSHIP Hurry! The train is leaving! What a swashbuckling return in form for AEM share price (SGX: AWX). Following the release of the 3rd quarter business update on 10 November, the counter surged 4.5% the next trading day. As of 12 November, AEM share price (SGX: AWX) rocketed 9% to hit a record high of $4.78. Can anything stop AEM share price (SGX: AWX)?
Although net profit for 9MFY2021 plummeted 33.4% to $53 million, the latest business update revealed a glowing outlook for AEM share (SGX: AWX).
In the business update, the management raised the full-year revenue guidance to between $525 million and $550 million. For AEM to meet this revenue guidance, the Group needs to achieve about $200 million in the 4th quarter. The management has a strong track record of meeting its revenue guidance, so I am confident that AEM is able to meet this target. However, the key sentence in the business update that could turbocharge AEM share price (SGX: AWX) is “the Group expects the ramp to continue through 4Q2021 and into FY2022”.
Based on the above statement, AEM should be raking in about $200 million of revenue in each quarter of FY2022 due to the volume ramp of their test platforms to key customer, Intel. Assuming net profit margin of 16%, the full-year net profit for FY2022 could be $128 million. This will translate to earning per share of $0.42. Attaching a PE ratio of 20, the forward AEM share price (SGX: AWX) could be $8.30.
Given that AEM share price (SGX: AWX) is being traded at $4.38 at the point of writing, it would take a leap of faith for this counter to reach $8.30. Then again, AEM share price (SGX: AWX) does not follow the script. The counter is capable of self-imploding. Yet on its day, it can be invincible. In the previous quarter, AEM share price (SGX: AWX) should have crashed following the release of a set of subpar results. But the management turned the table by announcing the entry of Temasek Holdings as one of its largest shareholders.
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 share price (SGX: AWX) may be biased.
Catalyst for AEM share price (SGX: AWX)
With the investment from Temasek Holdings. AEM could be inching towards a Nasdaq listing. At the current AEM share price (SGX: AWX), the counter is very near [This is a premium article. The rest of the content is blocked and can be accessible by SG Wealth Builder Members only. To read the full content, please sign up as member.]LIFETIME MEMBERSHIP
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