Introduction

When the new management (Lok Wai San & Albert Ng)  took over in 2011, they began a multi-year corporate restructuring process and invested heavily in R&D at the expense of short term pain (FY12,13,14 net loss was -S$1.38m, -S$4.07m, and -S$34.6m respectively).

In light of recent events, it seems that the efforts of management has paid off and AEM is ready to rise from the ashes. The company turned in a profit of S$5.7m for FY15 and now possess tremendous growth opportunities over the next 10 years. This is due to its new flagship product (from years of R&D) known as the “high-density test handler”.

At S$0.85 per share, AEM is valued at only S$36.3m. With a ttm P/E of 4.35x, I believe this company is greatly undervalued and has the potential to be a multi-bagger.

The Business

AEM designs and builds manufacturing equipment for the semiconductor ...