Key insights
- AEM Holdings' strong Q1 results, driven by key customer A and a shift in product mix, led to a significant earnings beat and raised guidance. Jefferies analysts anticipate further positive revisions due to industry momentum and higher-margin revenue contributions. This positive outlook for a semiconductor equipment maker suggests continued strength in the broader semiconductor industry, potentially benefiting US-listed semiconductor companies.
Investing.com -- AEM Holdings Ltd. (SGX:AWX) shares jumped 10.74% Thursday after the semiconductor equipment maker reported first quarter results that exceeded analyst expectations and raised its guidance.
The Singapore-based company posted sales of S$117 million for the first quarter, up 35.8% YoY. Profit before tax reached S$18 million, surging 369% YoY, with a PBT margin of 15.2%, up 172 basis points quarter-over-quarter and 1,084 basis points YoY. Net profit came in at S$14 million, up 329% YoY, with a net margin of 12.3%.
The company attributed its key growth to customer A, while the margin improvement resulted from a shift in mix driven by stronger TCS contribution.
Jefferies analysts commented: "We read the results print as a strong beat given the margins and guidance raise. We note the margin improvement was due to a shift in mix from a stronger TCS contribution. We expect further beat and raise due to industry momentum (test-time elongating and need to produce). We expect positive revision to EPS and growth. We see our bull-case emerging given contribution of ASE and KR memory player revenue which are higher margin. We reiterate BUY on the name."
The first quarter sales represented approximately 23% of both Jefferies' and consensus estimates, while profit before tax formed about 32% and 34% of respective forecasts. Net profit accounted for 33% of both estimates.