Expansion on the cards for Aemulus
10 Feb 2022
Aemulus Holdings Bhd is poised for a stronger showing in the second half of financial year ending Sept 30, 2022 (FY22) supported by its healthy order book replenishment, new testers launches and expansion into the mixed signal tester market.
In its latest first quarter results for the three-month period ended Dec 31, 2021 (Q1 FY22), the company reported a three-fold increase in net profit to RM4.53mil from RM1.5mil a year ago.
Notably, its revenue also rose 62% year-on-year to RM18.6mil, driven by higher contributions from all tester segments – mobile and tablet, data centre, automotive and CMOS image sensor (CIS).
CGS-CIMB Research, in a note, said that Aemulus’s order book is between RM45mil and RM50mil as of Feb 8 driven by robust demand for radio frequency (RF), RF filter, automotive and CIS testers.
As such, the group is set to start delivery of the first few units of its new 5600-CIS tester in Q2 FY22.
Moreover, CGS-CIMB Research added that the group intends to also launch the updated version of its RF and RF filter tester utilising 100% local content with in-house intellectual property design.
“This is part of the group’s strategy to increase the local content of its testers portfolio in order to participate in the Made in China 2025 initiative,” it noted.
Aemulus is also raising RM63.7mil through a private placement, which will be used for capacity expansion at its Aemulus Base facility, research and development, additional investment in its China joint venture, TMSS technology, repayment of borrowings and for working capital requirement.
The research house gathered that the new capacity expansion at Aemulus Base in Bayan Lepas could increase the group’s production capacity by 50% by the first quarter of calendar year 2023.
Following the issuance of 60.7 million new shares at RM1.05 per share in December last year, CGS-CIMB Research has revised down its earnings per share to reflect the dilution from new share issuances.
That said, it is keeping an “add” call on the stock with a lower target price of RM1.30.
“This is based on a lower 31.5 times calendar year 2023 forecast price-to-earnings ratio (P/E) as we update our target P/E multiple to reflect the weak sentiment in the global tech sector arising from concerns over interest rate hikes.
“However, we still peg our valuation to Malaysian Automated Test Equipment sector historical mean P/E,” added CGS-CIMB Research.
Source: The Star