With my divestment of $ComfortDelGro(C52) I have bought into $AEM(AWX) at a price of $2.75. :) Here is my brief coverage of this company.

I previously held this counter and released all I had at a price of $2.65. After a barrage of good news, I decided to enter the foray once again.

Throughout this entire coverage, I am assuming a profit margin of only 9%, which is a tad lower than their Q12017 profit margin of about 9.8%. Therefore, all my calculations here will be UNDERSTATED if they were to improve their profit margins, which has been the case over the last few years.

What I am also assuming is that there are no further sales order received from customers, which is almost zero probability.

Ready to read on? LETS GO!

"The Company is pleased to announce that it has received as at 31 May 2017, sales orders worth S$182 million for delivery in FY2017. This represents an increase of S$30 million in sales orders received over the previous sales order received announcement made on 18 April 2017."

With a profit margin of 9%, $182m of revenue equates to $16.38m of profit, which averages out to $5.46m per quarter. Adding q1 earnings, total year earnings will be 20.5 million, which equates to an EPS of $0.32.

With such an EPS, the share price of $2.72 represents a PE ratio of ONLY 8.6x. Everyone knows that this is an INSANELY low PE ratio, and that the market has not fully priced in the growth that is to come.

Even if it goes to an undemanding PE ratio of 12x, the price would have already grown to $3.8. I personally do not think that the management would allow the stock to escalate to that price, and they would issue bonus shares to improve the liquidity of the shares.

To give a comparison, $Micro-Mechanics(5DD) is trading at a PE ratio of 13x and $UMS(558) is trading at 17x (Info extracted from Stockfacts, correct me if I am wrong.)

What else do we want? It does not stop here! The company states - "Thirdly, with clear visibility of growth into the next few years, we intend to adopt a dividend policy to pay annual dividends, including interim dividends, of not less than 25% of profit after tax excluding non-recurring, one-off and exceptional items."

With a minimal profit estimation of AT LEAST $20million, 25% profit means $5m paid out, which equates to a dividend of at least 2.8% for an insane growth company.

To top it all of, institutional investors are buying in to AEM as well. "is pleased to announce that several long-only institutional funds have bought AEM shares and have become new shareholders. The institutional funds took up 2,737,800 shares at $2.70 a share from Orion Phoenix on 5 June 2017."

With this massive inflow of funds, I believe that AEM will attract many more institutional investors. I do not see Orion Phoenix reducing the percentage of their shares any further. With Institutional Investors buying at a price of $2.70, there is a major support there and I only see the price going up.

This is only the beginning of AEM!

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76 people like this.
luanboo :

Uptrend resumes tomorrow. Official results next week.

luanboo :

Reply to @Opportunistic_Investor : A bit disappointing, was trading well at the start and the momentum just died (general SGX market wide). But good to be holding above $3

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Opportunistic_Investor :

while others say its 30th year anniversay of the black monday.

today is the 1st year anniversary that i know AEM. like literally. still remember also on 4 nov 16 when all shares went down due to DT elected as president. this gem was the one in green....very very green....

BBChing :

Reply to @Opportunistic_Investor : it's good to have diff resources & information to analyse b4 making decision.

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cintaku :

anyone grabbing ? hehe

NoeticInvestor :

Reply to @seanie : I am trying. Not easy to time the market. @jeremiahyeo is good in timing.

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Salvatore :

25% gain from my average price.. should i lock profits?

Salvatore :

Hold = huat. Trust in fundamentals!

danielwong0 :

Reply to @KallangWoofverine : Fundamentals of AEM includes good management. SMRT has bad management, surprised that the CEO is still around after the recent fiasco with the flood. No accountability in GLCs!

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SonicIdeas :

Congrats to all vested in this stock, I thought at 2.5it was a bit too bullish based on the charts, but this stock is some kind of god it seems. All the best to all who Huat from this stock

andychang :

Reply to @weihongtan : Well, today is a vivid example of bb try to offload to make some quick bucks. Look at the volume which is done between 2.96 - 3.05, is fairly low.
In fact, the last 30mins b4 the closing, perhaps is a good time to buy, on the basis that the nasdaq side does not drop alot.

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Heracles :

Too bullish I also abit scared leh.. can start consolidating not

Heracles :

Reply to @Opportunistic_Investor : yeah hopefully is worth it. Beginner here, putting emotions aside is a real challenge. I've learnt not to be too bullish on certain counters

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Opportunistic_Investor :

old man here heart cannot tahan.

Jimes :

Reply to @Opportunistic_Investor : Haha... That is life .

I q to sell but nv managed to get filled ..

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luanboo :

Today wave 2 starting

luanboo :

Reply to @seanie : That's what it mean let the winner run. Take profit too early leaves food on the table.

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Target Price


I've been doing DD on Comfort since it was in the $2.4+ range, but held back.
Today, I've finally initiated a position: 10,000 shares at $1.98

I'm expecting a rebound in the near term, and would still be cautious over the mid to long term.
The time to enter in a BIG way is when all the ppl who have been caught holding at much higher levels, as well as those who have caught the falling knives, stop saying they'll "average down".
That's when I know the market participants have stopped hoping.
In the meantime, the current rapid fall means that the fundamentals are too juicy for me to ignore.
Historical PE range of Comfort is within 14 - 25 in the last 5 years.
But IMO, it's too dangerous to take that at face value. Simply because the business dynamics have certainly changed in the past 5 years.
So we have to reconsider the fundamentals of the whole industry.
I've incorporated in my valuation, a 10% drop in EPS for FY17 (at half year mark it's a 3% gain from y-o-y, but in mrq, it's a slight drop, so a 10% margin is certainly conservative enough)

At my entry price of $1.98, that gives me a PE of 15, taking into account a 10% drop.
dividend yield of just over 5%
More importantly, CDG has 1 thing going for it that's under estimated: the business generates a ton of FCF consistently.
In the past 5 years, only 1 year has negative FCF.

I'll be happy with a respectable gain in the short term. Longer term wise, I'd only increase the position size if the prices drop a lot more, my initial entry price leaves a lot of room and ammunition for adding.

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wellhandy avatar
Rank sm

This is a public service announcement.

As we head into the year end huat up, remember to stay vested, exit if not huating, manage risk, concentrate firepower on winners to degree of comfort,

just throw in a splash of names here for dyodd. no special meaning.
$Sembcorp Marine(S51.SI)
$Chip Eng Seng(C29.SI)
$Food Empire(F03.SI)
$Asian Pay Tv Tr(S7OU.SI)
$Tianjin ZX USD(T14.SI)
$China Sunsine(CH8.SI)
$Memtech Intl(BOL.SI)
$Spindex Ind(564.SI)
$Spura Finance(S23.SI)
$Viva Ind Tr(T8B.SI)

Disclaimer: This post is meant for entertainment only, reader should dyodd.

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Edited : 2.68 incoming

RIP big seller , 1.68 incoming

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