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AEM Holdings' upcoming 2Q results would be a closely watched earnings release. One intriguing aspect is the wide spread in analysts' target prices: from S$11.48 to S$16. That reflects a range of confidence over what AEM (market cap: S$2.5 billion) is becoming in the near term. The upcoming results (around mid-August) could help settle the uncertainty. |
Most investors are familiar with the views of Singapore brokers.
Analysts raised target prices (table below) following AEM's stellar 1Q2026 performance -- net profit was S$14.3 million, a surge of 330% y-o-y, reflecting strong operating leverage as its revenue increased 35.8% to S$116.9 million.
|
Brokerage |
Old TP |
New TP |
% change |
|
CGS Int'l |
10.15 |
14.79 |
45.7 |
|
UOB Kay Hian |
4.70 |
12.99 |
176.0 |
|
DBS Group |
8.90 |
11.80 |
32.6 |
|
Maybank IBG |
4.84 |
11.48 |
137.2 |
Far less known are the targets from two global investment banks.
Jefferies raised its target price from $8.88 to S$15.20.
Even more striking, UBS initiated coverage in late June with a S$16.00 target price — the highest, and is based on 41 times forecast 2027 earnings.
Markets are usually efficient at valuing relatively mature or steadily growing businesses.
They are much less adept when a company enters a new phase of growth.
In AEM's case, analysts are effectively assigning different probabilities to how successful AEM will be.
Different targets could also reflect different:
- revenue forecasts;
- margin assumptions;
- views on customer ramp-up;
- selected valuation multiples.
Here is a summary of local analysts' forecasts of AEM's revenue and profit. For comparison, the FY25 net profit was S$17.2 million while forecasted profits for FY2026 are more than 3X as high.
|
Revenue (S$m) |
Net Profit (S$m) |
|||
|
Brokerage |
FY26 |
FY27 |
FY26 |
FY27 |
|
CGS Int’l |
603.7 |
747.8 |
73.8 |
109.4 |
|
DBS Group |
586.9 |
729.4 |
60.9 |
93.3 |
|
Maybank |
579.0 |
752.8 |
63.2 |
89.3 |
|
UOB KH |
600.0 |
712.6 |
64.6 |
81.5 |
| Turnaround story on AI chips |
To be sure, after several years, AEM has executed an impressive recovery in early 2026.
Its key customer, Intel Corp, is regaining strength, new customers are contributing, margins have improved and earnings are rebounding strongly.
As AI drives demand for increasingly complex semiconductor packaging and testing, AEM could become a key beneficiary.
AI processors are larger, hotter, more power-hungry and vastly more expensive than previous generations of chips.
That makes advanced testing, thermal management and system-level validation far more critical before chips are shipped to customers.
In the upcoming 2Q results, investors will want to know:
| • how fast demand from AI-related customers will accelerate, • when new customers are progressing from qualification into volume production, • whether gross margins remain healthy as shipments increase, and • whether management sounds confident enough to raise its full-year guidance once again. |
Perhaps even more important will be management's commentary on customer diversification.
For years, AEM's dependence on Intel was viewed as its biggest investment risk. AEM's 2Q results could narrow today's wide range of analyst expectations.
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→ See also:AEM: $1.70 at Start of Year, Now Analysts' Average Target Price is $12.77
