Michael Mun Hong Yew, chairman and CEO of Aztech Global, saw his stake in the company rise after the share price dropped following the company’s 1QFY2023 earnings ended March on May 4.
On May 16, AVS Investments, an investment vehicle Mun controls, acquired 500,000 shares on the open market at $350,000 or 70 cents each. Before the earnings announcement, Aztech shares were trading at around 82 cents.
The transaction by AVS gave Mun a deemed stake of 542.7 million Aztech shares, equivalent to 70.3%, up from 70.24% before the purchase. The last time AVS bought from the open market was on Sept 21, 2021, when 277,600 shares were acquired for $285,928 or $1.03 each.
On May 4, Aztech announced 1QFY2023 revenue grew 26.3% y-o-y to $161.6 million. However, earnings dipped 3.6% y-o-y from $13.9 million to $13.4 million because of higher operating costs and unfavourable forex.
Aztech, which has an order book of $661.9 million as at May 4, says it remains cautiously optimistic about its business as continued supply chain challenges, inflationary cost pressures, higher interest rates and geopolitical tensions will impact business and consumer spending for the rest of this year. “The group remains ready to seize meaningful opportunities amidst the bright prospects of the IoT industry,” says Mun in his earnings commentary.
DBS Group Research warns investors that three manufacturing stocks under its coverage, Nanofilm Technologies International, Aztech and Micro-Mechanics Holdings, could see further downside.
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However, among the three, DBS is relatively more positive about Aztech, given its recent share price correction, relatively lower P/E of 6.2x and more upside to its target price of $1.05.
New AEM substantial shareholder
Asset manager FIL emerged as a substantial shareholder of AEM Holdings on May 9 after it acquired 297,600 shares in the open market for $1.03 million or $3.46 each. This brings FIL’s interest to 15.53 million shares, equivalent to 5.03%, up from 4.93%.
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On the other hand, James Toh Ban Leng, the lead independent director of AEM, has again sold shares in the market. On May 12, Toh sold 365,800 shares for $1.23 million or an average of $3.36.
On May 15, Toh sold another 150,000 shares for $495,750 or $3.30 on average. This brings Toh’s direct stake to just below 10.5 million shares or 3.398%, from 3.446% previously. In addition, he has a deemed stake of 0.387%, giving him a total interest of 11.7 million shares or 3.785%.
AEM shares lost ground following its 1QFY2023 ended March business update on May 11. In the three months under review, AEM reported earnings of $15.6 million, down 61.8% y-o-y from 1QFY2022’s $40.8 million. From the May 11 closing price of $3.45, AEM shares have dropped by 10.7% to close at $3.08 on May 17.
AEM has guided that revenue for the whole of FY2023 will be around $500 million but with the outlook of the notoriously cyclical semiconductor industry still in a haze, the company warns that it could either revise upwards or downwards its revenue forecast when it reports earnings for its 1HFY2023 ending June.
“Given the expected decline in testing equipment spending this year, we are taking proactive steps to lower operating costs and to drive operational efficiency while doubling down investments in engineering and R&D in critical areas,” says AEM’s CEO Chandran Nair. “Our engagement with our new customers is progressing as planned.”
Kimly resumes buybacks
Coffeeshop operator Kimly resumed its share buybacks earlier this month after its last purchase in February. On May 16, the company acquired 200,000 shares on the open market for 33.5 cents each. This brings the total volume bought back under the current mandate to 2.48 million shares.
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On May 11, the company reported revenue for 1HFY2023 ended March fell 0.9% y-o-y to $155.5 million because of lower revenue from the sale of food. Earnings were up 0.7% y-o-y from $18.5 million to $18.7 million, helped by lower operating costs. The company plans to pay an interim dividend of 0.56 cents.
“Looking ahead, we will continue to focus on growing our business in the halal market while also exploring new opportunities that could enhance our profitability and cater to the diverse preferences of our customers,” states the company.
