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Aug 30 at 11:56 PM
$AEM SGD(AWX.SG)
AEM: AI Growth Is Real, But the Price Has Run Ahead
The headline is validated. AEM’s 1H26 net profit surged 876% to S$30.8 million, while revenue rose 29.9% to S$247.2 million. Management raised FY2026 revenue guidance to S$630–680 million and introduced EPS guidance of S$0.245–0.275, supported by AI/HPC production ramps. (DBS Singapore)
Fundamentally, AEM is compelling: higher-margin Test Cell Solutions lifted 1H gross margin to 33.1%, while its balance sheet remained conservatively geared, with only 0.03x debt/equity and net cash. (DBS Singapore)
But valuation is the concern. At S$9.36, the stock trades around 34–38x FY2026 guided EPS and roughly 5.8x NAV, leaving limited margin for execution disappointment. Technically, momentum has cooled sharply: shares fell from S$11.54 after results and now sit below the 50-day moving average of S$9.91, although still above the 200-day average of S$9.16. (Investing.com)
View: HOLD, not BUY. Existing investors can retain exposure, but fresh money should wait for S$9.15–9.30 support. Those seeking better value could rotate partially into UMS Integration, where 1H26 earnings rose 66% and valuation remains more reasonable relative to growth. (DBS Singapore)
Not financial advice.
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