AEM Holdings

[Boon]

I don't think a pump & dump has to just circulate false/misleading info. A syndicate could well pain such a rosy image of the co or industry that the sky is the limit is good enough. Take the lessons from the dot-com error as example where people are predicting the end of brick & mortar to ecommerce. AEM is in the semicon industry and this industry is quite cyclical. I know as I am in this industry.

not vested, just sharing a view

https://en.wikipedia.org/wiki/Pump_and_dump
 
"Pump and dump" (P&D) is a form of microcap stock fraud that involves artificially inflating the price of an owned stock through false and misleading positive statements, in order to sell the cheaply purchased stock at a higher price. Once the operators of the scheme "dump" sell their overvalued shares, the price falls and investors lose their money. Stocks that are the subject of pump and dump schemes are sometimes called "chop stocks".[1]

While fraudsters in the past relied on cold calls, the Internet now offers a cheaper and easier way of reaching large numbers of potential investors.[1]
________________________________________________________________________________________
 
There are many ways to “manipulate” the market for one’s own gain, legally or illegally.
 
According to various “definitions” of what a “pump and dump” scheme is all about - it involves artificially inflating the price of an owned stock through false and misleading positive statements.

Scheme that does not involve artificially inflating the price of an owned stock through false and misleading positive statements is therefore not a "pump and dump" scheme but other scheme...................................
 
That’s exactly my point.
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[Boon]

FY2016 Results:
 
Revenue (SGD, million):
FY2014= 30.860
FY2015= 46.797
FY2016 =70.123   (+ 49.8%)
1H2017= 70.000   (at least) (management guidance)
 
PBT (Profit Before Tax ; SGD, million):
FY2014= -29.442
FY2015=     4.868
FY2016=     6.091   ( + 25.1%)
1H2017 =   6.500    (at least) (management guidance)
 
NPAT (SGD, million):
FY2014=  -39.933  (including discontinued operation)
FY2015=     5.782   (including income tax credit of 1.8 m)
FY2016=     4.657   (there was income tax expense of 1.3m)
 
EPS (SGD, cents):
FY2014= -90.19
FY2015=  15.00
FY2016=  10.88     (-27.3%)
 
OCF (SGD million): Before / After working capital change
FY2014 = - 10.924   /  -8.329
FY2015 =     4.530   / - 2.262
FY2016 =     7.291   / - 1.762
 
Purchase of PPE (SGD, million):
FY2014 = 5.531
FY2015 = 0.603
FY2016 = 0.605
 
Cash & Cash Eq (SGD, million):
FY2014= 11.152
FY2015= 10.363
FY2016=   6.310
 
Debt (SGD, million):
FY2014= 0.202
FY2015= 0.162
FY2016= 0.085
 
NAV per share (SGD, cents):
FY2014= 40.4
FY2015= 55.2
FY2016= 70.0
 
DPS (SGD, cents):
FY2014= 0.0
FY2015= 1.0
FY2016= 1.8  (+ 80%)
 
Number of shares issued:
FY2014 =  44,347,676
FY2015 =  44,360,576
FY2016 =  42,765,129
 
PE
Share price = baesd on 185 cents
EPS (FY2016) = 10.88 cents
PE (Historical based on FY2016 EPS) = 185 / 10.88 = 17
 
Comments:
1) “Few or no competitors able to match high-end handler specifications (AEM is sole- source into its customer for its latest platform)” – claim by AEM management.
2) If 1) above is true, plus if the commercialization the new high density modular test (HDMT) handlers platform by its customer could turn out to be a big success, then prospects of AEM could be tremendous, going forward.
3) There have been early signs of success on this front, as evidenced by the recent positive results (including higher order book) released by AEM.
4) Revenue increased +49.8% from 46.797 m in FY2015 to 70.123 m in FY2016.
5) PBT increased +25.1% from 4.868 m in FY2015 to 6.091 m in FY2016.
6) However, NPAT and EPS in FY2016 decreased compared to FY2015. This was mainly due to the fact that there was a tax credit of 1.8 m in FY2015, whereas there was a tax expense of 1.3 m in FY2016.
7) The business is currently generating positive OCF (before working capital change) but negative OCF (after working capital change).
8) The management claimed that the business requires low capex investment in PPE – how true is this and how low is low?
9) AEM is adopting a dividend policy of paying out not less than 25% of NPAT.
10)              OCF (before change in working capital) generated is not enough to cover change in working capital + dividend payment + purchase of PPE. As a result, cash level has been dropping.
11)              Order book at hand is strong and the management is confident to achieve 1H2017 revenue and PBT of 70 m and 6.5 m respectively, surpassing that of entire FY2016.
12)              BS is healthy but not that strong, IMO, low debt (only 85k) and low cash level (only 6.3 m).
13)              If higher investment in working capital is needed to cope with higher sales order and/or higher investment in PPE is required, equity and/or debt raising might be unavoidable.
14)               Key question : how disruptive or revolutionary could this HDMT handler platform be?
_______________________________________________________________________________________________________

[BlueKelah]

Probably not as disruptive or revolutionary as management touts it to be. Though market seems to have fallen head over heels.

According to my sources in the semicon industry, there is high switching cost for companies doing chip testing to migrate to newer machines. And current testing machines are doing the job pretty well and profitably so unlikely for them to switch. The actual testing it does also doesn't sound like anything new, its just a new "all in one" testing machine.
It may be marginally more cost-effective in catering to more high-end chips which intel is making.

The risk I reckon is that the tech is new and intel is doing a bulk order now, hence ramp up in order book. Once the intel side setup is done, we may not see any order book additions if no other big companies come in.

[Boon]

Probably not as disruptive or revolutionary as management touts it to be. Though market seems to have fallen head over heels.

According to my sources in the semicon industry, there is high switching cost for companies doing chip testing to migrate to newer machines. And current testing machines are doing the job pretty well and profitably so unlikely for them to switch. The actual testing it does also doesn't sound like anything new, its just a new "all in one" testing machine.
It may be marginally more cost-effective in catering to more high-end chips which intel is making.

The risk I reckon is that the tech is new and intel is doing a bulk order now, hence ramp up in order book. Once the intel side setup is done, we may not see any order book additions if no other big companies come in.

It seems to me that most of your understanding on HDMT is incorrect.

Intel says the HDMT platform is revolutionary.
 
This test technology platform targets a range of products in diverse markets including server, client, system on chip, and Internet of Things. (not only for chip testing)
 
Until now, this capability was only available internally for Intel products.
 
Today’s announcement makes HDMT available to customers of Intel Custom Foundry.
 
If my understanding is correct, it is a platform.  Does it make any of the ATE redundant?
 
____________________________________________________________________

https://newsroom.intel.com/news-releases...customers/
 
Intel Announces New Packaging and Test Technologies for Foundry Customers
 
New Technologies to Improve Time to Market and Reduce Costs
 
SANTA CLARA, Calif., Aug. 27, 2014 – Intel Corporation today announced two new technologies for Intel Custom Foundry customers that need cost-effective advanced packaging and test technologies.
 
Embedded Multi-die Interconnect Bridge (EMIB), available to 14nm foundry customers, is a breakthrough that enables a lower cost and simpler 2.5D packaging approach for very high density interconnects between heterogeneous dies on a single package. Instead of an expensive silicon interposer with TSV (through silicon via), a small silicon bridge chip is embedded in the package, enabling very high density die-to-die connections only where needed. Standard flip-chip assembly is used for robust power delivery and to connect high-speed signals directly from chip to the package substrate. EMIB eliminates the need for TSVs and specialized interposer silicon that add complexity and cost.
 
“The EMIB technology enables new on-package functionality that may have been too costly to pursue with previous solutions,” said Babak Sabi, Intel vice president and director, Assembly and Test Technology Development.
 
Intel also announced the availability of its revolutionary High Density Modular Test (HDMT) platform. HDMT, a combination of hardware and software modules, is Intel’s test technology platform that targets a range of products in diverse markets including server, client, system on chip, and Internet of Things. Until now, this capability was only available internally for Intel products. Today’s announcement makes HDMT available to customers of Intel Custom Foundry.
 
“We developed the HDMT platform to enable rapid test development and unit-level process control. This proven capability significantly reduces costs compared to traditional test platforms. HDMT reduces time to market and improves productivity as it uses a common platform from low-volume product debug up to high-volume production,” said Sabi.
 
EMIB is available to foundry customers for product sampling in 2015 and HDMT is available immediately.
_____________________________________________________________________
 
http://www.intel.com/content/www/us/en/f.../hdmt.html
 
High Density Modular Test
Built for throughput, accuracy, and cost-effectiveness. Only available at Intel.
 
For Final Test, the Best Answer is H, D, M, and T
High Density Modular Test (HDMT) is the keystone of Intel’s internal test structure, purpose-built to address the challenges of modern final test. Beyond product quality, most test decisions are driven by the impact to unit cost and thus profitability. As its name implies, cost savings are derived by combining industry leading Automated Test Environment (ATE) capability and performance into a very small, modular package that can enable high throughput with low overhead.
 
Mobile Economics Put a Focus on Final Test
Modern flip chip system-on-chip (SoC) packages pose interesting economic challenges for test technology. Building a profitable business around high complexity, small die sold into increasingly competitive markets requires a low cost of goods sold. Final test technology must therefore meet a high bar: maintain low cost via high volume and low cycle times without sacrificing accuracy and thorough testing.
 
Enter HDMT
HDMT is our answer to those challenges. It is a singular test framework that represents a combination of hardware and software modules that can be configured to the device under test. The goal of its design was simply to break through the scalability limitations of traditional test equipment. By enabling flexibility in configuration and parallelism, capability and capacity can be optimized to the need of each individual product to achieve the lowest possible cost of test. Redundant engineering effort is eliminated with a singular test, thermal, and tooling environment. Lastly, the machine is fully integrated with our data feed forward network, representing a foundational link in our ability to provide unit-level process control and traceability in debug.
 
Powering Industry Leading Test Costs per Unit
Test cost per unit is a function of throughput, which itself is derived by units tested (cycle time) and overall setup time. HDMT is focused on the idea of maximizing the time spent testing, minimizing overhead and serialization through an asynchronous massively parallel handling architecture. This is all accomplished without regard to the complexity of the device test requirement – inclusive of adaptive test flows and complex in-situ decision making.
 
Converged Testing Environment Without Limiting Flexibility
When we set out to redefine final test, we recognized the obvious time-to-market savings of only building test tooling once as well as synchronizing the environments between prototyping and production. Our engineering and production environments are identical in every way, requiring zero correlation effort from single device under test to massive parallelism on complex devices.
 
Integrated Manufacturing Data
By integrating with our data feed forward network, each unit tested in the HDMT can be identified and traced from fabrication to shipping, which customers can review via the Intel Custom Foundry Services online portal. This streamlines debug at Final Test as all information about that unit is available for analysis, reducing the time to debug. Integrating all this information and placing.
______________________________________________________________________________________________________________ 

[BlueKelah]

Found a good article which was published after Intel's announcement of HDMT in 2014.
====================================================
ATE Market Gets More Crowded

[But suddenly, the landscape is once again changing in ATE, which, in turn, could give test managers some new and different options. In perhaps the most intriguing event, Intel is entering the test market. Intel is offering foundry customers the use of its own, internally built tester. In addition, National Instruments is entering the commercial ATE market. And separately, a number of companies continue to expand their modular instrument lines based on the PXI standard, enabling chipmakers to build their own full-blown testers.]

[Going forward, test managers can also explore some new options—check out Intel’s test offering; look at the new ATE player in the market; and build a tester from scratch. In fact, building a tester is a viable path, as Altera, Intel, Micron and TI have built their own ATE over the years.]

[Intel uses the HDMT platform to reduce its own test costs by twofold. Now, Intel is making the test platform available to its foundry customers, which, in turn, could get a leg up on the competition. “This platform doesn’t come with just hardware,” said Sunit Rikhi, vice president of the Technology and Manufacturing Group at Intel and general manager of Intel’s Custom Foundry unit. “It’s an entire methodology that we’ve built (in terms of) how we test our complex products in engineering and take them rapidly into production.”

There is a catch, however. HDMT is only available to Intel’s foundry customers. Intel won’t sell the tester in the merchant market. The tester from Intel is a modular but proprietary system. The same is true with the testers from the commercial ATE vendors. The question is whether test managers want an open and modular tester, as once envisioned by the STC.]
====================================================

From this article, it looks like Intel's HDMT Platform is not going to make the ATE market redundant anytime soon. From what I can see, there are other proprietary systems/platforms and testers in use and other major chipmakers 

And since its only available to intel's foundry customers, it's not going to take over the ATE market or be disruptive. If anything it will just make intel and it's foundry customers more competitive.

-not vested and no longer interested-

[Boon]

“Intel uses the HDMT platform to reduce its own test costs by twofold”
 
If that’s the case, the cost saving is very significant.
 
http://infopub.sgx.com/FileOpen/AEM%20Re...eID=441442
 
On page 6 of AEM’s corporate presentation:
 
It says ”AEM handlers are cost saving solution which allows customers to consolidate disparate test platforms into a single high-performance platform”
 
The “Near Future” diagram shows the consolidated single platform could be used with other Testers.
 
In Intel’s HDMT platform system, the testers could possibly be custom built by Intel but the “handlers” is provided by AEM.
 
If AEM holds the intellectual property right of the “handlers” or “platform”, then AEM does not have to rely on Intel alone as its only customer. This is even better for AEM, as it could reach out to more customers.

It looks to me that the "breakthrough" is in the "handlers" or "platform" and not in the "testers".
____________________________________________________________________________________________________________________

[Boon]

Looking backwards:
 
Fundamental of AEM has certainly improved over the last few quarters.
 
Share price of AEM has certainly increased significantly over the same period.
 
Historical PE based on FY2016 EPS of SGD 0.1088 and share price of SGD 1.885 = 17
 
For those who have managed to buy in earlier at lower price (say below 0.50 a share), AEM is already a few-bagger to them.
 
Looking forward into FY2017 and beyond:

Based on order book and management guidance, 1H2017 revenue and PBT is going to surpass that for the entire FY2016.
 
If FY2017 EPS = 1.5 x FY2016 EPS, => Forward PE = 11
If FY2017 EPS = 2.0 x FY2016 EPS, => Forward PE = 8
 
This is still considered cheap, if growth potential is going to be significant, going forward.
 
If AEM’s “handlers” really has what it takes to reduce test costs significantly for the market players, questions remain:
 
1) How big a market is it for AEM’s handlers, if Intel is its only customer?  Bear in mind that Intel is still the number 1 chipmaker in the world - lots of chips to be tested.
2) How big a market would it be if Intel’s foundry customers were to be included?
3) How big a market would it be if other customers were to be included, assuming AEM holds the IP rights of the “handlers?
4) Does AEM hold the IP rights of the “handlers”?
____________________________________________________________________________________________

[b0ssY]

Looking backwards:
 
Fundamental of AEM has certainly improved over the last few quarters.
 
Share price of AEM has certainly increased significantly over the same period.
 
Historical PE based on FY2016 EPS of SGD 0.1088 and share price of SGD 1.885 = 17
 
For those who have managed to buy in earlier at lower price (say below 0.50 a share), AEM is already a few-bagger to them.
 
Looking forward into FY2017 and beyond:

Based on order book and management guidance, 1H2017 revenue and PBT is going to surpass that for the entire FY2016.
 
If FY2017 EPS = 1.5 x FY2016 EPS, => Forward PE = 11
If FY2017 EPS = 2.0 x FY2016 EPS, => Forward PE = 8
 
This is still considered cheap, if growth potential is going to be significant, going forward.
 
If AEM’s “handlers” really has what it takes to reduce test costs significantly for the market players, questions remain:
 
1) How big a market is it for AEM’s handlers, if Intel is its only customer?  Bear in mind that Intel is still the number 1 chipmaker in the world - lots of chips to be tested.
2) How big a market would it be if Intel’s foundry customers were to be included?
3) How big a market would it be if other customers were to be included, assuming AEM holds the IP rights of the “handlers?
4) Does AEM hold the IP rights of the “handlers”?
____________________________________________________________________________________________

Just FYI, I think their tester patent can be found in this page: https://www.google.com/patents/US20170010313

[Boon]

Looking backwards:
 
Fundamental of AEM has certainly improved over the last few quarters.
 
Share price of AEM has certainly increased significantly over the same period.
 
Historical PE based on FY2016 EPS of SGD 0.1088 and share price of SGD 1.885 = 17
 
For those who have managed to buy in earlier at lower price (say below 0.50 a share), AEM is already a few-bagger to them.
 
Looking forward into FY2017 and beyond:

Based on order book and management guidance, 1H2017 revenue and PBT is going to surpass that for the entire FY2016.
 
If FY2017 EPS = 1.5 x FY2016 EPS, => Forward PE = 11
If FY2017 EPS = 2.0 x FY2016 EPS, => Forward PE = 8
 
This is still considered cheap, if growth potential is going to be significant, going forward.
 
If AEM’s “handlers” really has what it takes to reduce test costs significantly for the market players, questions remain:
 
1) How big a market is it for AEM’s handlers, if Intel is its only customer?  Bear in mind that Intel is still the number 1 chipmaker in the world - lots of chips to be tested.
2) How big a market would it be if Intel’s foundry customers were to be included?
3) How big a market would it be if other customers were to be included, assuming AEM holds the IP rights of the “handlers?
4) Does AEM hold the IP rights of the “handlers”?
____________________________________________________________________________________________

Just FYI, I think their tester patent can be found in this page: https://www.google.com/patents/US20170010313

Thanks, but could not have access to the image or drawing. It would be much better if we could.
___________________________________________________________________________________________________________________

[b0ssY]

Looking backwards:
 
Fundamental of AEM has certainly improved over the last few quarters.
 
Share price of AEM has certainly increased significantly over the same period.
 
Historical PE based on FY2016 EPS of SGD 0.1088 and share price of SGD 1.885 = 17
 
For those who have managed to buy in earlier at lower price (say below 0.50 a share), AEM is already a few-bagger to them.
 
Looking forward into FY2017 and beyond:

Based on order book and management guidance, 1H2017 revenue and PBT is going to surpass that for the entire FY2016.
 
If FY2017 EPS = 1.5 x FY2016 EPS, => Forward PE = 11
If FY2017 EPS = 2.0 x FY2016 EPS, => Forward PE = 8
 
This is still considered cheap, if growth potential is going to be significant, going forward.
 
If AEM’s “handlers” really has what it takes to reduce test costs significantly for the market players, questions remain:
 
1) How big a market is it for AEM’s handlers, if Intel is its only customer?  Bear in mind that Intel is still the number 1 chipmaker in the world - lots of chips to be tested.
2) How big a market would it be if Intel’s foundry customers were to be included?
3) How big a market would it be if other customers were to be included, assuming AEM holds the IP rights of the “handlers?
4) Does AEM hold the IP rights of the “handlers”?
____________________________________________________________________________________________

Just FYI, I think their tester patent can be found in this page: https://www.google.com/patents/US20170010313

Thanks, but could not have access to the image or drawing. It would be much better if we could.
___________________________________________________________________________________________________________________

You can try this link: http://www.freepatentsonline.com/20170010313.pdf

Don't think it will be much use unless you are an expert in semi-con industry so as to know the exact benefits this design gives.