On 5th of May 2022, Dow Jones crashed 1063 points amid concerns of recession and surging global inflations. The following day, the Straits Times Index (STI) suffered a rout. In the sea of red, the bullish form of AEM share price stood out. At one point, AEM share price surged 2.5%, making it the top gainer in SGX. However, by the end of the trading day, the counter surrendered all the gains and fizzled out.
The volatile form of AEM share price came on the back on a solid first quarter financial update for FY2022, which saw the semiconductor test equipment manufacturer posting its highest quarterly revenue and profit before tax in its history. Net profit rocketed more than three-fold to smash a high of $40.8 million while revenue hit $262 million.
Previously, I wrote that AEM may become a $1 billion revenue company. On the basis of the quarterly performance, that day will come sooner than I expect. In fact, I would have expected AEM share price to breeze past the $5.00 mark on 6th May 2022. If not for the overall stock market carnage, the stellar first quarter performance would have turbocharged AEM share price to high heavens.
The first quarter performance is critical as it sets the stage for subsequent quarterly performances. In my view, the result validated the assumption on the volume ramp up from Intel and provided a good basis for my hypothesis of a $100 million net profit in FY2022. If the Group could perform like this for the subsequent quarters, then full-year net profit may possibly hit $160 million. If so, then EPS would be $0.516. Assuming we assign a forward PE of 15, then the target AEM share price would be [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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