AEM - Results is out! Net profit is down 76% to 19.715m, Total revenue is down 49.1% to 275m

 Results is out! Net profit is down 76% to 19.715m, Total revenue is down 49.1% to 275m.

AEM reports revenue of S$275.2M and profit before

tax of S$23.9M for 1H2023

EPS of 6.33 cents is down 76% from 26.57 cents.

Interim dividend of 3.6 cents versus 5 cents last year.

• The Group posted revenue of S$275.2 million in 1H2023, with profit before

tax of S$23.9 million over the same period.

• The Group has updated its FY2023 guidance to be between S$460 million

to S$490 million on the back of a pushout of next generation devices.

• Customer traction for the Group’s Test 2.0 solutions continues to grow with

confirmed initial orders from an additional new leading application

processor customer, and an expansion of AEM’s engagement with a

previously announced memory customer.

• The Group continues to grow its technology leadership and has been

awarded two additional patents related to its thermal control technology.

• Following 1H2023, AEM announced a US$20 million settlement of the

confidential arbitration and will recognise the impact in 3Q2023.

I think Cash Flow is negative. Cautious mode.

Business Outlook:

The Group has revised its revenue guidance for FY2023 from a target of S$500 million to a

range between S$460 million to S$490 million on the back of reduced test capital equipment

utilisation levels across the industry and delays in current customer device release schedules.

The past several quarters have seen the industry going through a period of inventory digestion.

Industry players have looked to weather the storm by delaying their roadmap device releases,

reducing their capex spend, and renewing their focus on operational efficiency. Although the

slowdown has resulted in a short-term reduction in demand for new test capability and

capacity, it has provided test development groups the breathing room to plan and devise their

test strategies for the AI-fuelled boom that will help drive the industry to a trillion-dollars.

AEM’s Test 2.0 paradigm is at the forefront of test solutions for next generation advanced logic

devices, including high-performance compute, given the Group’s unmatched capability in

thermal and Device Under Test (DUT) power.

While the inventory digestion is expected to continue through 2023, the Group believes it is

well-positioned to take advantage of the semiconductor volume growth that is expected to

return to the semiconductor industry in 2024.

As the Semiconductor World embraces chiplet technologies that bring computing and high

bandwidth memory blocks closer and even stacked on top of each other, the need to test and

assure performance over the lifetime of those ICs have become more complex and costly. The

need to rethink how chiplets are tested is now acute and represents a market inflection. AEM’s

disruptive solutions have been at the core of its customer engagements for the past several

years. At AEM, we call it Test 2.0.

AEM’s CEO, Chandran Nair, commented, “At AEM, we are laser-focused on the future and

enabling our customers to embark on their Test 2.0 journey by leveraging our solutions

throughout their test flows and preparing them for the challenges they will face in an AIfocused world in the years to come.”

About AEM Holdings Ltd.

AEM is a global leader in test innovation. We provide the most comprehensive semiconductor

and electronics test solutions based on the best-in-class technologies, processes, and

customer support. AEM has a global presence across Asia, Europe, and the United States. With

manufacturing plants located in Singapore, Malaysia (Penang), Indonesia (Batam), Vietnam (Ho

Chi Minh City), China (Suzhou), and Finland (Lieto), South Korea, and the United States (San

Jose) and a global network of engineering support, sales offices, associates, and distributors,

we offer our customers a robust and resilient ecosystem of test innovation and support.

AEM Holdings Ltd. is listed on the main board of the Singapore Exchange (Reuters: AEM. SI;

Bloomberg: AEM SP). AEM’s head office is in Singapore.

Chart wise, I think 3.00 may come back again!

Not a call to buy or sell!

Please dyodd.