AEHR - Silicon Carbide Testing and Burn-In System Manufacturer

[Navi]

Hey Valhalla,

Just setting up a Mega Thread for all the major news and company overview to help those wondering why I’m long-term bullish on the company (even if we have a recession).

Financials are a big thing for me when I’m looking at any trade. They give significant insight into the companies’ overall health and help you determine if you need to worry about certain mechanics while you’re playing the stock.

Starting with Profitability:

Their annual ROE numbers don’t look like a company that is performing extremely well especially when considering their PE ratio (45.261). This is normally a pretty big red flag that the valuation of the stock isn’t reflecting the true net income of the company when ROE is drastically lower than their Net Income.

In fact most of their Profitability numbers look rather atrocious… At the annual level…

The Quarterly numbers show why this past earnings was such a big deal for me when the numbers came out. Look at how the rapid increase just in this last quarters ER numbers compared to Q2. Alongside them reaffirming their yearly guidance.

But damn… There is this big tidbit which is a valid concern always:

FINANCIALS AUDITED IN MARCH AND USED SAME ACCOUNTING METHODS SEE POST BELOW
He made some claims on Patents lets check on that

Well damn son… Thats a lot of fucking patents
Main one we care about is US 6815966 B1

Now the fun part… TA

This chart is the Weekly chart as that’s what matters most to me.
During this week the stock broke rather violently out the bullish pennant it was consolidating within before its most recent ER call. The ER pushed it towards the top of the pennant and it retraced solidly (and as it usually does) since it is a low float with not a ton of institutional investors or exposure to retail investors. This push this week now needs to see some consolidation at the $19-21 levels before I think we see another big move. Now certainly anything can happen but I find it unlikely we continue pushing up on no news past this current level. But it could certainly happen:

Current date for this options table is 10/22/2022
A massive amount of 2.5C 19JAN24 got purchased on Friday (4.9k worth) and as can be seen there is consistent OI already sitting on the chain and a good amount was purchased on the November strike on Friday. I’ll be keen to see how much OI there is Monday for Nov as well as seeing the current SI numbers.

But to get a continued move I would like more news before I take a position myself again or some consolidation.

Upcoming News to look for:

Aehr Test Systems to Present at the LD Micro Main Event XV Investor...

The last time they presented at a conference was Aug. 22 where it seems it is likely they acquired the interest of the EV customer they announced on October 13th. So with the upcoming conference we have some lag time before any big news of another possible customer. But that leaves room open for Wafer Pak orders that are in the millions of dollars themselves since its a reusable component for the burn in and testing system.

Nonetheless bless you all and lets enjoy the weekend

[Navi]

Whoops. They got financials audited in March sorry Mr. Gayn you’re a good man

[macromicrodick]

The last quarter they had something like $1.5M in loans forgiven from the PPP program that would have effected their profitability last quarter (I think it may even make them run at a loss). Lots of companies are using this type of accounting decisions for federal and provincial aid up here in Canada to show decent quarterly numbers. Could call if the Covid boost?

Still love your enthusiasm for this stock and will be diving more into the financials. Hope to add to my boomer portfolio!

[DankeDeNada]

I believe the “adjusted eps” backs out PPP forgiveness

[Navi]

$AEHR Explodes Over 20% After Earnings - Find Out Why With CEO Gayn Erickson

oOOOOOOOOOO didn’t know this happened. Watching now.

[Navi]

So apparently they’ve had multiple presentations with multiple banks and investment firms for analyst coverage. But their lack of willingness to raise money (and theres plenty of banks and all that have expressed interest) and their ATM offering may have stifled some of that coverage. But he candidly said those banks and firms they presented too still advise clients to buy them lmaooo

So it seems almost (even according to Gayn) that firms and banks are almost holding off on coverage in order to keep AEHR their little black box secret.

Talked about a new customer that went from a conversation and in 3-4 months they got an order. They’ve communicated their intent to place an order for a system but started with Wafer Paks. Their automotive qualified wanting to do wafer level burn in (this could be the EV customer but not sure).

Can figure out their customers in 10% filings?

This customer sells to automotive suppliers today but if you went to their website they have nothing about selling Mosfets but they are positioning to do so.

AEHR is talking with companies that aren’t even in SiC market yet (and some are BIG) and haven’t even publicly announced they’re going to get into it.

In MOSFET testing and SiC their are stresses that will induce certain types of failures.
A SiC MOSFET is a switch its a valve that turns on flow (like water). Turning a gate on allows electric flow from top to bottom. In the manufacturing process the defect process you can’t make them perfect, but even if they’re not perfect in the first couple hundred hours of use they can fail. Which will cause the invertor to fail. So we need to get rid fo those. One way is to test the invertor for 2-300 hours or put it on a test system and do the same (infant mortality rate). AEHR does a stress test in 100 hours or 10 hours to get the same result to test for infant mortality rates, they do this by turning the valve on and pressing really hard (called a gate stress) and the other one is a high side pressure test with their new enhancements they’ve built this side of testing into their systems. So now companies can do this test during production instead of QA (the high voltage test). So now customers have access to both in production. So this new enhancement allows for diode, GAN, and SiC testing capabilities in FOX-XP systems. So this capability came about cause a customer wanted a new way to do production and AEHR gave it to em! Thats dope af lmaooooo

So the high voltage stress tests would only matter to customers. Analysts wont get excited about it.
But he said competitors will be sweating. The new enhancement has about 6 months before its ready to be shipped out.

They haven’t done any price increases on their products. He hates the “oh covid we gotta raise prices” so he aint playing that game. His vendors simply raising their prices upsets Gayn. So he has escalated with his customers/vendors and they’ve backed off. Gayn out here pushing big Silicon companies around lmaoooo this man fucks hard he is my new Spirit animal. I need a Gayn emote stat so I can name it after myself. @Conqueror gimme my first fucking emote dammit
So he says their cheaper than the alternative and they make good money, but with volume they’ll make great money!

If someone tries to fight AEHR they’ve gotta fight 10 patents and figure out how to beat AEHR. But even if they did then they can beat his material cost since his material costs are 30% cheaper and if they tried to reduce their price by 30% their margins would be ass. If he tried to charge 90% margin the customers would pay for it, but would rather keep their pricing strategic to defend against anyone trying to undercut them or enter their niche in SiC market.

How does a possible recession effect their volume of AEHR products?
Gayn - No body has internalized how much a shift to more people buying EV’s is and if it doesn’t happen then AEHR growth is lower and less explosive, but even then keeping up with AEHR’s customer demand is still going to be hard.

VW is working on building an EV platform that works across Audi, Porsche, and VW. So they need to build one invertor module (and they plan to build it in house). VW is forecasting more SiC themselves (just for VW) to the tune of 4x the amount of SiC produced globally last year. and their talking with AEHR

So with the demand for Wafer Paks alone could be $40 million a month possibly. But he’s not forecasting the demand yet so he doesn’t get ahead of himself and have to walk back statements.

Cool part of AEHR system, is every silicon device can be tested in their system. They’re going after Nan chips with some automation they’re shipping out end of this year (so Nan chips will be added to their product line up!)

Oooo they can test CPU’s with AMD and Intel. So they’ve talked with Intel and AMD about how to introduce AEHR’s testing system into the components included with CPU’s (not the CPU level but at other parts of the process)!!!

BRuh My dick can only get so hard.

[Navi]

This move today firmly puts a retest of ATH (being $27) in the cards. Looking tomorrow at GM to set the EV tone for the week followed by Ford later in the week. God Paki is never going to shut up

[Navi]

Positioning light in anticipation of GM call isn’t a terrible idea. Go light and lotto do not buy ATM. I’ll be looking to take my own advice and will position into some Dec contracts for the main position I’ll hold for this movement. God speed retards

[TendieMcTenderson]

Picked up 1 25c Nov for 1.10 today and one 30c Nov for 0.25

[Navi]

[Navi]

Pulling down with $WOLF in AH. Wolf lower guidance on will bring some negative sentiment to AEHR tomorrow likely causing today to have been the top. For now the play is over if this move down holds for AEHR. I’ll watch in PM but if you got in looking for more upside apologies on my end. The WOLF call did have some bullish sentiment with them looking to increase their CapEx for new fabs from ~$500m to ~$1b for over the next 5 years(might be actually just next year but I was in a meeting and not able to pay the best attention). This is definitely net bullish but without a purchase order or contract for a new system the market won’t care more than likely. Keeping this on the watchlist and looking towards some other stuff

[Navi]

Liking the current movement. No position yet but with 11 days to Opex and some bullish divergence from SPY looks decent enough. Gonna wait and see what it does this week. Don’t advise taking a position at least until CPI prints.

[Navi]

Watching today. Need a $22 clear and hold and to not drop it tomorrow in order for me to take a position. But it’s moving good in relation to spy. Thinking we might have another round of what happened last Opex. Which by the way you could have entered around here or later this week and be able to do what I did. Recommend waiting for a daily close above $22 as it’s critical level and then pray we break that $23