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

Are you feeling bullish or bearish on AEM’s stocks?

Either way you can buy (long) or sell (short) the asset using IG's industry-leading trading platform, by investing in the share directly, in a few easy steps:

  1. Create a live or demo IG Trading Account, or log in to your existing account
  2. Enter <AEM Holdings> in the search bar and select the instrument
  3. Choose your position size
  4. Click on ‘buy’ or ‘sell’ in the deal ticket
  5. Confirm the trade

IGA, may distribute information/research produced by its respective foreign affiliates within the IG Group of companies pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Where the research is distributed in Singapore to a person who is not an Accredited Investor, Expert Investor or an Institutional Investor, IGA accepts legal responsibility for the contents of the report to such persons only to the extent required by law. Singapore recipients should contact IGA at 6390 5118 for matters arising from, or in connection with the information distributed.

The information/research herein is prepared by IG Asia Pte Ltd (IGA) and its foreign affiliated companies (collectively known as the IG Group) and is intended for general circulation only. It does not take into account the specific investment objectives, financial situation, or particular needs of any particular person. You should take into account your specific investment objectives, financial situation, and particular needs before making a commitment to trade, including seeking advice from an independent financial adviser regarding the suitability of the investment, under a separate engagement, as you deem fit.

Please see important Research Disclaimer.

Seize a share opportunity today

Go long or short on thousands of international stocks.

  • Increase your market exposure with leverage
  • Get spreads from just 0.1% on major global shares
  • Trade CFDs straight into order books with direct market access

Live prices on most popular markets

  • Forex
  • Shares
  • Indices
liveprices.javascriptrequired
liveprices.javascriptrequired

Prices above are subject to our website terms and agreements. Prices are indicative only. All shares prices are delayed by at least 15 mins.

liveprices.javascriptrequired

Prices above are subject to our website terms and agreements. Prices are indicative only. All shares prices are delayed by at least 20 mins.

The Momentum Report

Get the week’s momentum report sent directly to your inbox every Monday for FREE. The Week Ahead gives you a full calendar of upcoming key events to monitor in the coming week, as well as commentary and insight from our expert analysts on the major indices to watch.

For more info on how we might use your data, see our privacy notice and access policy and privacy webpage.

You might be interested in…

Find out what charges your trades could incur with our transparent fee structure.

Discover why so many clients choose us, and what makes us a world-leading provider of CFDs.

Stay on top of upcoming market-moving events with our customisable economic calendar.