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QuestionsCategory: Valuation QuadrantAEM – Valuation
Bran Yang asked 2 years ago

Was looking at the financials of the company and trying to derive the intrinsic value.
However, notice that the Revenue and Earnings CAGR were high, 70% & 80%, while the FCF CAGR was negative (i removed the years where there were negative FCF) and the 2018 FCF was lower than 2017
It may seems far fetch to use any of the figures to calculate a reasonable DCF. Could you advise if i might have missed something here?




Thank you

4 Answers
Victor Chng answered 2 years ago

Hi Bran,
May I know AEM is listed in which exchange so that I can take a look and better answer your questions.

Bran Yang replied 2 years ago

Hi Victor

It is listed on SGX, ticker AWX

Thank you

Victor Chng answered 2 years ago

Hi Bran,
From what I see, you can just use simple PE Ratio to value them. First, you need to download the price chart from Yahoo Finance then you input the EPS to plot the PE Chart. Once you get the chart, find out the average PE range. The intrinsic value should be your EPS multiply by average PE range.

Mun seng Lee answered 2 years ago

I was vested in AEM shares before. Do take note their biz is cyclical, tends to follow the Tech or electronics cycle. I believe their key customer is Intel and Huawei is their up and coming next key customer. With the US-China trade war, more or less AEM outlook will be somewhat affected. I am not sure historical PE trend can tell u the full story..before Intel became their customer, their performance was very poor, you can see from the rev and eps trend. However if you like their story, be sure to factor in higher MOS before u press the button. 

Victor Chng answered 2 years ago

Thanks for sharing Mun Seng :)