Will AEM cross S$5 a share in 2021?
Analysts envision a further 30% upside on the manufacturing solutions company’s share price, which is up 10% so far this year.
- AEM Holdings (SGX: AWX) share price opened nearly 2% at the start of the week
- This came after the group reported an 85% year-on-year increase in net profit
- The board has proposed a total dividend sum of S$0.09 for FY2020, up 76.5%
- CIMB analysts recently reiterated a target price of S$4.63 and ‘add’ rating
- Trade AEM shares, long or short, with an IG account
AEM share price: the latest
AEM Holdings shares opened higher to start the week, after it reported its full-year results for the 2020 financial year last Friday (26 February 2021).
Nearly three million shares exchanged hands on Monday (01 March) and Tuesday (02 March). Since then, share price has declined nearly 5% to around S$3.90.
Year-to-date, the manufacturing solutions stock is up over 10%.
AEM raises 2020 dividends by 76.5%
The group recorded a net profit of S$97.6 million for the full 2020 financial year, 85% higher than that of FY2019.
Net profit margin increased from 16.3% for FY2019 to 18.8% for FY2020. This came on the back of a 60.6% increase in revenue - S$519 million in FY2020 versus S$323.1 million in FY2019.
Fully diluted earnings per share for FY2020 came in S$0.3512, compared to S$0.1938 for the year before.
Cash flows from operating activities for the full year came in at S$125.3 million, before taking into account working capital changes. Cash and cash equivalents increased 25.2% in FY2020 to S$134.8 million as at 31 December 2020. Net asset value per share was S$0.767 versus S$0.498 a year prior.
The group has proposed a final dividend of S$0.04 per share. Together with the interim dividend of S$0.05 per share, the total dividend sum for FY2020 is S$0.09 per share. This represents a 76.5% year-on-year increase.
What’s the outlook for the rest of 2021?
In its earnings release, AEM says annual global sales of semiconductors is expected to increase by 8.4% in 2021, according to the latest data from the World Semiconductor Trade Statistics (WSTS) organisation.
This latest figure highlights an upward revision from 6.2% as expected previously.
The group also mentioned last month’s voluntary conditional offer of CEI Limited. If the deal is successful, CEI’s addition is expected to help ‘solidify AEM’s portfolio and its leadership position’ in the advanced computing, 5G and artificial intelligence space.
In terms of share price outlook, the stock has received an average 12-month price target of S$5.075, which represents an upside of 29.5% from the last traded price.
The stock also received a consensus rating of ‘outperform’ from brokers polled by SGX StockFacts.
The latest rating came from CIMB analysts, who maintained an ‘add’ recommendation and target price of S$4.63 on 26 February.
How to trade AEM stocks with IG
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