AEM share price in new chapter with Temasek
Lifetime Membership The last time I covered AEM Holdings was in May 2024 when AEM share price was trading at around the $1.90 bandwidth. However, that article was written before the train-wreck inflicted by the appalling 1HFY2024 financial results. The horror show caused another bout of meltdown of AEM share price as the counter tumbled to a low of $1.20, a level so unimaginable for many investors. The apocalyptic drop of AEM share price must have scared the living hell out of AEM investors. Question now is: will AEM share price see light at end of tunnel in 2024?
The continuous decline of AEM share price must have broken the heart of many long-term investors given that this company used to be the market darling of SGX and had even attracted a strategic investment from Temasek Holdings in 2021. The sovereign wealth fund had entered the counter when AEM share price was trading at around $3.80 levels. Hence, the plummet in AEM share price would have certainly dented Temasek’s returns.
Despite the crisis of confidence in AEM share price, which was largely driven by Intel’s woes, Temasek Holdings has not trimmed its stake in AEM. This is unlike the rest of the substantial shareholders like Malaysia’s EPF and Aberdeen, which had pared down their stakes in AEM in the past few years in order to reduce their risk exposures. The steadfast conviction of Temasek Holdings in AEM might be puzzling for many investors. Yet, in my perspective, I believe that conviction could be driven by Singapore’s government.
If you look back over the decades, Singapore has not produced many innovative products at the global market stage, probably due to the very small talent pool. Against this backdrop, AEM Holdings must have attracted the attention of the Singapore government with its various technology patents to support the System Level Test 2.0 solutions for the semiconductor industry.
In 2020, former MTI Minister Chan Chun Sing visited AEM’s facility and praised the company for adding value to the semiconductor industry through its System Level Test solutions. He also credited AEM for creating plenty of engineering jobs in Singapore. Shortly after his visit, Temasek Holdings stunned the market with a whopping $103 million investment in AEM Holdings, sending AEM share price to high heavens back then.
Subsequently on 5 September 2024, Prime Minister Lawrence Wong and his Indian counterpart, Modi, visited AEM facility to explore synergies between Singapore and India. The visit should be seen as significant because you would surely want to showcase your best companies to foreign government leaders from US, China and India to demonstrate that your country has the talents and capabilities for innovation. AEM fits the bill with its various patents and System Level Test 2.0 solutions for AI chips. As such, I am of the opinion that Temasek might be plotting something big or special on AEM in 2025.
AEM share price in trashy form again
AEM share price in US$280 billion funding
AEM share price in brutal storm
Then again, at this point of time, it is hard to tell if a potential big move by Temasek in AEM would move the needle for AEM share price like what it did in 2021. This is because AEM is currently in the midst of a transition with a new CEO, pivoting its test solutions in AI chips and obtaining contract wins in new marquee customers. However, with a Board of Director seat in AEM, it is unlikely that Temasek Holdings would sit back and watch its investment capital evaporated with the sharp decline of AEM share price. Year-to-date, AEM share price has collapsed 60%.
In this blog, I have always maintained that on its day, AEM share price can be unbeatable. Conversely, when the tide goes against AEM share price, the counter can spiral out of control. On this note, this counter is really not for the faint-hearted. 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 fought back with tenacity
For reasons unknown, AEM share price had bottomed at $1.20 on 21 August 2024 and turned bullish for no apparent reasons to reach the current $1.36. Whilst the 5 September visit by India PM validated Singapore government’s confidence in AEM, it did not change the growth narrative of AEM at all as there were no announcement of new contract wins nor any strategic investments from either States.
Moreover, the management had guided that the third quarter financial result should continue to be dismal as “quarter-on-quarter revenue growth is anticipated in 4Q2024 driven by new customer business growth”. During this time, Intel has also announced plans to halt new factories in Germany and Poland amid financial woes (Intel lost US$1 billion in the previous quarter). For this reason, business volume from Intel should continue to be weak for AEM.
Against the above backdrop, the growing optimism in AEM share price should be attributed to [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 MembershipFor members of SG Wealth Builder logging in from Apple or Mac devices, please access through this link. This allows for one-time log in only (instead of having to key in user-id and password twice).
Congratulations on your first step to becoming part of SG Wealth Builder community! For a one-off payment of $100, you can get full access to all the articles and enjoy the benefits of SG Wealth Builder Membership.
The full benefits and privileges of SG Wealth Builder Membership:
- Access to the latest premium articles of SG Wealth Builder
- Email notifications of latest blog articles
- Request for coverage on stocks, insurance and other personal financial topics
- Comment in articles
Note: After payment is made, you will be prompted with registration form to create your user-id and personal password.
