AEM 1H21 (SGD4.02, 16 AUG 21)

AEM 1H21

It's been awhile since I wrote previous article. Lazy bugs were biting me resulting I'm not able to write the article. Ok, stop nonsense. So, how is the result for AEM 1H21? Let's take a look. 

Financial Report

Looking at the picture with 4 red circle then we probably know what's the results. Revenue dropped 30% and Profit almost drop half compared to 1H20. If we read back to previous report, actually management team has informed us that 1H20 will not get much order and customer ramp their production in 2H20.

Balance Sheet

Intangible assets increased almost 50 percents, and 25 percents of total assets. Need to beware of this, if next quarter still increase then may need to consider to drop this stock. I have phobia on the intangible assets. Besides that, cash and cash equivalents drop almost 50 percents.

Financial Liabilities = Loan x 3 , important thing must say 3 times !!! Cash drop and loan increase significantly. High Alert and need to beware of this. Cash drop 64mil and loan 60mil !!!

Cash flow 

CFO is negative!!!! Increase in inventories and payable resulting CFO negative. 

If we look at CFFI, AEM has aggressively acquire PPE roughly 52mil. Need to be aware of the negative CFO. 

Forecast

As mentioned early, AEM management expect a strong uptake in 2H21. Let's wait for 2H21 results! 

My thought:

Company aggressively expand causing decrease in cash flow. For 1H21, definitely the financial report is not comparable to 1H20 and CFFO is negative. Need to take note of the 2H21, if the report is not good, we need to give up this stock as I would consider this as integrity issue (Strong uptick in 2H21). 

Not to forget their target this year is 460 ~ 520million