AEM (SGX: AWX) share price to hit $6?

In February 2021, US President Joe Biden signed an executive order to address a global semiconductor shortage. The recent explosive demand for chips arises because of supply chain disruption caused by pandemic. The shortage has resulted in serious production bottlenecks in US automobile industry. To add fuel to fire, the US-China trade saw companies like Apple and Sony hoarding chips for their electronic products. In view of this massive demand for computer chips, would AEM (AWX) share price rise to smash past $6?

AEM AWX share price

The global shortage of semiconductors takes place at a time when US policymakers are about to unleash another stimulus package, estimated at a whopping US$1.9 trillion. Based on historical trends, the stimulus is expected to lead to another bull run in the stock market. So I am of the view that AEM (AWX) share price should enjoy another splendid run in the coming weeks.

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Note that this is an opinion article and not meant to be a financial advice. Please do your due diligence or engage financial advisors before investing in the stock market. I am vested in this counter (holding 2000 AEM shares at $4.50), so my views on AEM (AWX) share price may be biased.

AEM (AWX) share price in golden era

With a 5-year beta of 1.80, AEM (SGX: AWX) share price is definitely one of the most volatile counters in Singapore Exchange. Then again, fortune favours the brave. To make money from the stock market, you need to take calculated risks. Nobody would have believed AEM (AWX) share price was trading at penny stock level of just $0.16 in 2017. Now, AEM (AWX) share price is trading at more than 20-fold as compared to 2017.

The meteoric rise of AEM (SGX) share price has led to investors hailing AEM as the “King of Technology Stocks” and inevitably drew comparisons between Executive Chairman Loke Wai San and CEO of Creative Technology, Sim Woo Hoo. Both are considered as heroes of our generation as they have made Singaporeans proud by producing world-class commercial products. But then again, there are striking differences that investors must take note.

Sim Woo Hoo is the co-founder of Creative Technology. In the vein of most entrepreneurs, he will surely fight to the end to make sure Creative Technology sustain in the future. The 2006’s epic clash of Creative Technology against US giant, Apple, is a classic example. On the other hand, Loke Wai San is a venture capitalist who rescued AEM from the brink of collapse in 2011 when the former management was embroiled in corruption charges. As a typical venture capitalist, Loke Wai San will definitely have an exit strategy, but only after he fully unlocked the value of AEM (AWX) share price.

Recent merger and acquisition moves made by AEM indicated that Loke Wai San could be plotting something intriguing. In this article, I will share my outlook for AEM (AWX) share price in the year 2021.

AEM (AWX) share price at cross-roads

Looking back, the explosive form of AEM (AWX) share price is largely due to the patent for one of the processes used in its blockbuster product, High Density Modular Test (HDMT). The patent provides AEM (AWX) share price a leading edge over its peers. This competitive edge led to the turbo-charge of AEM (AWX) share price in recent years.

Given the super run of AEM (AWX) share price, long-time investors must be [This is a premium article. The rest of the content is blocked and can be accessible by SG Wealth Builder Members only. To read the full content, please sign up as member.]

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Updated: March 6, 2021 — 9:14 pm

1 Comment

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  1. Fascinating Analysis!
    The three questions I still have, are:
    1. Do they have a robust “moat” i.e. do they have patents or proprietary know-how?
    2.Customer concentration: is this an issue`
    3.Is the recent acquisition a good strategic fit? Does it strengthen their “moat”?
    PGL

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