Singapore Stock Market News

AEM Holdings Ltd - Stars are aligned

StockFanatic
Publish date: Fri, 02 Feb 2018, 01:42 PM
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■ Announced the acquisition of Afore, a profitable leading MEMS test solution company.

■ Accretive acquisition as cash forms two-thirds of the acquisition payment and new shares to be issued is just 1.3% of AEM's share base.

■ Given Afore's small earnings base and integration synergies with AEM, we believe Afore could register 20% profit growth in FY18-19F.

■ Announced the retirement of its current CEO and appointment of new CEO.

We revise our earnings forecasts further and incorporate the acquisition impact, leading to a higher TP of S$6.62, still based on 10x CY19F earnings.
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