<FY23 results first take> Earnings drop better than expected but revenue guidance for 1H24 lacklustre
- FY23 revenue broadly in line; earnings not as bad as expected
- Provides 1H24 revenue guidance of $170-200m (c.33% of our estimates) and proposes 1:100 bonus share issue in place of dividends
- Uncertainties surrounding timing of new product ramps and pace of industry recovery casts a shadow on FY24
- We currently have a HOLD call with TP $3.00; under review
FY23 revenue broadly in line; earnings not as bad as expected. FY23 revenue came in at $481.3m (-44.7% yoy) owing to the semiconductor glut which pushed out customer capex, largely in line with our expectations. At the bottom line, the group reported a net loss of -$1.2m (-100.9% yoy) as the group accounted for the arbitration settlement of $26.7m and an inventory adjustment of $21.1m. This fared better than our estimate of -$5-6m due to lower-than-expected SG&A expenses (-31% yoy). AEM will not pay out a final dividend for FY23 and will propose a bonus issue of shares of 1:100.
Uncertainties surrounding timing of new product ramps and pace of industry recovery casts a shadow on FY24. The visibility of the timing of new product ramps remains limited, therefore AEM is only providing revenue guidance for 1H24 of $170-$200 million, with the midpoint of the guidance representing c.33% of our FY24F estimates. This marks a sequential 10.2% hoh decline vs 2H23 revenue and 32.7% yoy decline vs 1H23. The group however maintains that customer engagements continue to be robust and with the current visibility, with the ramp of products expected towards the end of 2024. Meanwhile, visibility for FY24 continue to be clouded by the non-cancellable long-dated purchase orders with the key customer with the timing of contributions unclear. In view of the uncertainties that remain, we are maintaining our view that there are many moving parts with some bright spots, but no strong catalyst in the near term. We currently have a HOLD call with TP $3.00; under review. More updates to come following the analyst briefing this afternoon.