AEM share price to jump 100% with new patent?

Chinese New Year Special Offer! This will be my first article on AEM share price in 2022. All eyes should be on the upcoming FY2021 full-year financial result. Will it set AEM share price on fire like what it did in 2018?

From January to March 2018, AEM share price rocketed 100% to reach $1.87. The supersonic run of AEM share price was attributed to two factors – the award of patent for the technology used in its flagship product, High Density Modular Test (HDMT) equipment and also the ramp up of orders from its key customer, Intel.

AEM share price

The ramp up of orders from Intel led to an increase of 216% and 560% in revenue and profit for FY2017. The release of the full-year FY2017 financial result in early 2018 saw AEM share price roaring to high heavens. Will history repeat itself for AEM share price? Fast forward four years, the ramping of HDMT by Intel is over. However, AEM is launching is its next blockbuster product test equipment product – Asynchronous Massive Parallel (AMPS). This new capability allows high powered chip to be tested under thermal controlled environment without damaging the chip.

In my research, I found out that AEM had obtained the patent used in its AMPS (patent number: 20210325452). The patent was granted only on 21 October 2021. Prior to this, Temasek Holdings took up a substantial stake in AEM in August 2021. My hypothesis is that Temasek Holdings might have anticipated the grant of this patent to AEM and this could have prompted the sovereign wealth fund to invest in the company. Then on 25 November 2021, Temasek Holdings purchased another 443,700 shares from the market.

If you scan the landscape in Singapore, you would realize that there are very few listed home-grown technology companies who possess patents for their products. AEM belongs to this unique elite league. Its peers, Frencken and UMS do not hold any patents.

Shortly after the grant of the patent, AEM management guided that the Group expects the volume ramp for the next generation SLT handlers to continue through 4Q2021 and into FY2022. The patents held by AEM are like giving wings to a tiger. They provide AEM competitive edge and allow the Group to gain market share. On 11 January 2022, the Group guided that FY2022 revenue is expected to be between $670 million to $720 million. For perspective, the highest full-year revenue recorded was $519 million in FY2020.

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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, so my views on AEM share price may be biased.

AEM share price to thrive in 5G era

My vision for AEM share price is that it would become a $10 stock in SGX Mainboard. Having a conviction is important in stock investing as it can provide a calming effect when the share price movements are not in your favor. Obviously, the current AEM share price is still [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.]

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Updated: January 23, 2022 — 7:36 am

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