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Weekly | AEM Semiconductor Stocks Benefit from AI Boom

As of the close on Friday, $Straits Times Index(STI.SI)$ closed at 3,166.30 points, down 1.28% points last week. During the last 5 trading days, $AEM HOLDINGS LTD(AWX.SI)$, $FRASERS LOGISTICS & IND TRUST(BUOU.SI)$, $SEMBCORP INDUSTRIES LTD(U96.SI)$, $IFAST CORPORATION LTD.(AIY.SI)$ and $TOP GLOVE CORPORATION BHD(BVA.SI)$ are the top 5 Weekly gainers, up 7.02%, 6.67%, 5.92%, 3.31% and 3.08% respectively. $SHANGRI-LA ASIA LIMITED(S07.SI)$, $SATS LTD.(S58.SI)$, $CapitaLandInves(9CI.SI)$, $NIO Inc.(NIO.SI)$ and $UOL GROUP LIMITED(U14.SI)$ are top 5 decliners of SGX stocks which market capital above S$1 Bln. Below are key analyses of the TOP 5 gainers: 1. $AEM HOLDINGS LTD(AWX.SI)$ Most of the semiconductor stocks benefitted from $NVIDIA Corp(NVDA)$ surge because of earnings. $AEM HOLDINGS LTD(AWX.SI)$ provides intelligent system-level testing and handling solutions for semiconductor and electronics companies. AEM Holdings is still trading at a fairly cheap price. The valuation model shows that the intrinsic value for the stock is SGD4.65, which is above what the market is valuing the company at the moment. This indicates a potential opportunity to buy low. Although, there may be another chance to buy again in the future. This is because AEM Holdings’s beta (a measure of share price volatility) is high, meaning its price movements will be exaggerated relative to the rest of the market. If the market is bearish, the company's shares will likely fall by more than the rest of the market, providing a prime buying opportunity. 2. $FRASERS LOGISTICS & IND TRUST(BUOU.SI)$ FLCT reported a 13.4% yoy decrease in NPI for H1 2023, mainly due to the absence of contribution from Cross Street Exchange which was divested in March 2022. However, it achieved positive rental reversion at 3.6% on an incoming rent versus outgoing rent basis and maintains a portfolio occupancy rate of 95.9%. 3. $SEMBCORP INDUSTRIES LTD(U96.SI)$ With 49% stake, private equity firms possess the maximum shares in the company. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn). Clearly, private equity firms benefitted the most after the company's market cap rose by S$446m. Temasek Holdings (Private) Limited is currently the company's largest shareholder with 49% of shares outstanding. Meanwhile, the second and third largest shareholders, hold 1.9% and 1.7%, of the shares outstanding, respectively. 4. $IFAST CORPORATION LTD.(AIY.SI)$ The hedge fund does not have a large stake in EVERFINE. We can see that the largest shareholder is Chung Chun Lim, the CEO, with 19% of the issued shares. For context, the second largest shareholder holds about 13% of the outstanding shares, followed by the third largest shareholder with 6.7% of the shares. Interestingly, the third largest shareholder, Wee Kian Lim, is also a board member, again indicating strong insider ownership by the company's majority shareholder. 48% of the business is held by the top 25 shareholders Insiders appear to own a significant portion of EJK Group Limited. Insiders own S$369 million of the S$130 million business. 29% insider ownership in Upper Deck The large shareholding of individual investors in Upper Deck indicates that they collectively have a greater say in the management and business strategy 5. $TOP GLOVE CORPORATION BHD(BVA.SI)$ The pandemic may seem like a distant memory now, but it had the effect of boosting the fortunes of several sectors such as technology, rubber gloves, and personal protective equipment. Top Glove released its fiscal 2023’s second quarter (2Q FY2023) earnings for the period ending 28 February 2023. The glove maker saw its revenue plunge by 58.2% year on year from RM 1.48 billion to RM 618 million. Operating expenses, however, fell by just 43.1% year on year to RM 785.8 million. Revenue dipped by 2% qoq from RM 633 million in 1Q FY2023 while net loss was 2% lower qoq. The good news is that sales volume grew 6% qoq as customers showed signs of replenishing their inventories.
Weekly | AEM Semiconductor Stocks Benefit from AI Boom

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