AEM: Flat 2025 Outlook, but New Customers' Ramp Sets Stage for FY26 Growth

Following AEM Holdings' 1HFY25 results, there is a wide range of reaction as exemplified by DBS Group Research reiterating "BUY" with a 12-month target price of SGD2.10 and Maybank Research maintaining "SELL" (SGD1.36).

The contrasts are rooted in the valuation and recovery pace of AEM — but the analysts agree FY25 is a transitional year before FY26 delivers strong gains.

AEM's 1HFY25 revenue hit SGD190.3 million (+9.6% y-o-y), fueled by AI customer traction and Intel's non-cancellable orders.

The revenue came in within analysts' forecasts but earnings were dragged down by SGD5.9m of forex losses, resulting in a profit of SGD3.2m.

Gross profit came in at SGD48.3 million (+11% y-o-y) with margins improving slightly to 25.4%.

Key Area of Difference	DBS View	Maybank View
Recommendation & Target Price	BUY; SGD2.10 (25x FY26F earnings)	SELL; SGD1.36 (18x FY25/26E P/E)
FY25 Revenue Forecast (SGDm)	374 (subdued transitional year)	430 (slow ramp)
FY25 Net Profit Forecast (SGDm)	9.10 (lowered 42% for FX)	21 (core, excluding FX)
Valuation Rationale	Rerating on FY26 turnaround story	Rich valuations; "more time will be needed" for justification

DBS Maybank8.25
AEM guided for 2H25 revenue at SGD170-190 million, implying flat half-on-half performance.

Analysts agree on building momentum, with the fabless AI customer's next-generation accelerator ramp eyed for late 2025/early 2026.

DBS analyst Amanda Tan highlights "momentum building for FY26," and Maybank analyst Jarick Seet echoes, "major AI/HPC customer likely ramping up production in 4Q25/1Q26."

Both spotlight the memory customer's purchase order for an evaluation final test handler, potentially yielding volumes in late 2026, expanding from system level test to final test.

Meanwhile, key customer Intel's firm orders through FY27 offer visibility.

chart8.25

Risks: FX volatility persists, with expected continued weakening of USD.

DBS noted AEM "at the cusp of a multi-year rollout," and Maybank noting ramp-ups needing time.

DBS bets on FY26 inflection, valuing at 25x earnings.

Maybank deems valuations "rich" at 22.6x FY25E P/E, urging caution until earnings surge.

Engines of Future Growth

AEM has a strategic focus on AI, HPC (high performance computing), and memory markets, where its precision thermal control and advanced automation provide a competitive edge.

Financially strengthened with S$46.4 million in operating cashflow and a 0.2x debt-to-equity ratio, AEM positions itself for future opportunities.

CEO from 28 July 2025

SAMER KABBANI, 51
• Joined AEM in 2020 as Chief Technology Officer.
• In 2022, appointed President (in addition to being Chief Technology Officer).
• Current AEM stock holding: 455,399 ordinary shares; 1,017,979 restricted shares

CEO Samer Kabbani discussed the industry landscape: "The semiconductor industry continues to navigate a complex but promising landscape. The ongoing wave of advanced packaging, AI, high performance compute is reshaping how devices are designed, assembled, and tested.

"The trends are increasing the thermal and automation demands at every stage of test from early deployment to volume manufacturing. This is an area where AEM has distinct advantages."

Previously President and Chief Technology Officer at AEM, Kabbani was appointed CEO starting July 2025, leveraging his 25 years in test innovation, .

In the Q&A session, Kabbani said: "I've been with the company for 5 years now. I've been focused on developing our differentiated products... the board has asked me to switch focus now, rightfully so, into ramping these products. So the focus for me personally is to make sure we execute and meet the demand in the coming years."

Overall, AEM's management paints a picture of resilience and optimism, navigating near-term variability while investing in long-term drivers.

DBS report is here, while Maybank's is here.

AEM: Flat 2025 Outlook, but New Customers' Ramp Sets Stage for FY26 Growth

You may also be interested in: