AEM Holdings has reported lower earnings for its 1HFY2021 but some analysts agree with the company’s view that the current 2HFY2021 will be better. Furthermore, with Temasek Holdings poised to be the largest shareholder via a placement, the provider of testing services for the semiconductor industry is well poised to for further growth.

Maybank Kim Eng’s Lai Gene Lih, for one, has kept his “buy” call but with a higher target price of AEM from $5.56 to $5.77. DBS analyst Chung Wei Le, in his Aug 10 note, has raised his target price from $4.73 to $4.99, which is pegged to 13.7 times FY22F earnings, which is the same multiple as AEM’s previous peak valuation in 2018. 

"AEM is in a strategic position to benefit from its key customer and industry uptrend. The stock is currently trading at an 11.5x FY22F PE, which is at a 30.7% discount to its peer average of 16.5x," writes Chung, citing the strong industry momentum.

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