Core Viewpoint - Company ASMPT reported better-than-expected orders for Q2 2025, but profit improvement fell short of expectations, with revenue of HKD 3.4 billion (USD 436 million), a year-on-year increase of 1.8% and a quarter-on-quarter increase of 8.9% [1] Financial Performance - Q2 2025 revenue was HKD 3.4 billion (USD 436 million), with a gross margin of 39.7%, showing a year-on-year increase of 0.33 percentage points and a quarter-on-quarter decrease of 1.19 percentage points [1] - Profit for Q2 2025 was HKD 1.34 billion, a year-on-year decrease of 1.7% but a quarter-on-quarter increase of 62.5%, primarily influenced by a one-time tax credit [1] - New orders in Q2 2025 totaled USD 482 million, exceeding expectations [1] Business Segmentation - In H1 2025, 30% of revenue came from computer terminals, up from 7% in the same period of 2024, while automotive electronics accounted for 15%, down from 24% in 2024 [2] - Semiconductor revenue in Q2 2025 was USD 258 million, a quarter-on-quarter increase of 1% and a year-on-year increase of 20.9%, although orders decreased by 4.5% quarter-on-quarter and 4.6% year-on-year [2] - SMT business received USD 269 million in orders in Q2 2025, reflecting a quarter-on-quarter increase of 29.4% and a year-on-year increase of 51.2% [2] Growth Outlook - The company is experiencing growth in HBM (High Bandwidth Memory) and advanced logic, with TCB (Thermal Compression Bonding) orders increasing by 50% year-on-year in H1 2025 [1] - The company has completed equipment installations for major clients in the HBM sector and has begun small-scale production for HBM4 [1] Earnings Forecast and Valuation - The company raised its revenue forecast for 2025 by 2% to HKD 14.238 billion but lowered its profit forecast by 21% to HKD 988 million [2] - The current stock price corresponds to a P/E ratio of 26.6x for 2025 and 16.8x for 2026, with a target price of HKD 72, indicating a potential upside of 14% from the current price [2]

Core Viewpoint - ASMPT's 2Q25 earnings fell short of expectations primarily due to foreign exchange impacts on gross profit margin (GPM) and strategic research and development (R&D) investments, yet the blended book-to-bill (B/B) ratio improved to 1.11, indicating strong order gains across the semiconductor (SEMI) and surface mount technology (SMT) sectors, supporting robust revenue guidance for 3Q25 [1][2] Financial Performance - 2Q25 revenue increased by 2% year-over-year to HK$3.4 billion, aligning closely with midpoint guidance, while GPM and operating profit margin (OPM) decreased by 1.2 percentage points and 0.1 percentage points quarter-over-quarter to 39.7% and 5.0% respectively, mainly due to high operating expenses (OPEX) and strategic investments [2] - Adjusted net income (NI) decreased by 3% year-over-year to HK$131 million, reflecting the impact of OPEX and foreign exchange [2] Future Guidance - 3Q25 revenue guidance is set between US$445 million and US$505 million, exceeding market expectations by 1%, with the midpoint reflecting a 10.8% year-over-year and 8.9% quarter-over-quarter increase, driven by strong SEMI orders and SMT orders from a leading smartphone customer [3] - Management anticipates strong growth in advanced packaging (AP) and a recovery in mainstream demand, particularly from China and AI data centers, although there are concerns regarding soft near-term demand in automotive and industrial sectors [3] Advanced Packaging (AP) Insights - In 1H25, AP revenue constituted 39% of total revenue, marking a record high, with TCB orders increasing by 50% due to significant installations and shipments for HBM clients [4] - ASMPT has established the largest TCB installed base globally, surpassing 500 tools, and is expected to continue its growth trajectory in TCB and other AP tool orders in 2H25 [4] Valuation Adjustments - The revenue estimate for SMT has been increased by 3% to account for demand recovery driven by China and AI, while SEMI revenues have been reduced by 2% due to delayed TCB orders [6] - The group GPM is expected to remain above 40%, but net income forecasts have been lowered by 15%/4%/3% to reflect the impact of high OPEX [6]

Core Viewpoint - ASMPT reported a revenue of HKD 3.4 billion for Q2 2025, showing a year-on-year growth of 1.8% and a quarter-on-quarter growth of 8.9%, closely aligning with Bloomberg's consensus estimate of HKD 3.47 billion [1] Financial Performance - Revenue for Q2 2025 was HKD 3.4 billion, with a gross margin of 39.7%, a year-on-year decrease of 33 basis points and a quarter-on-quarter decrease of 119 basis points, in line with Bloomberg's expectation of 40% [1] - Net profit was HKD 134.3 million, a year-on-year decline of 1.7% but a quarter-on-quarter increase of 62.6%, falling short of Bloomberg's consensus estimate of HKD 147 million [1] - The company expects revenue for the next quarter to be between USD 4.45 billion and USD 5.05 billion, with a median growth of 10.8% year-on-year and 8.9% quarter-on-quarter, exceeding Bloomberg's consensus estimate of USD 4.65 billion [1] Business Segments - SMT orders saw significant growth, driven by AI and the Chinese market, with SEMI business revenue increasing by 21.4% year-on-year and 0.8% quarter-on-quarter [1] - Non-advanced packaging business is recovering steadily due to supply chain diversification, increased AI demand, and improved OSAT capacity utilization in China [1] - The company observed a trend of increasing orders in the SMT business, with a year-on-year increase of 51.6% and a quarter-on-quarter increase of 29.3% [1] Advanced Packaging Developments - Orders for TCB in advanced packaging increased by 50% year-on-year in the first half of 2025, with successful installations for leading HBM3E 12H customers [2] - The company is progressing from trial production to mass production for C2W AOR TCB in collaboration with leading foundries [2] - The second-generation HB tools are expected to be delivered to HBM customers in Q3, showcasing competitive advantages in alignment and bonding accuracy [2] Investment Recommendations - The target price has been raised to HKD 77.2, maintaining a "Buy" rating, with net profit estimates for 2025/2026/2027 increased by 3%/8%/7% to HKD 623 million/HKD 1.035 billion/HKD 1.627 billion [3] - The company is expected to benefit from AI-driven advanced packaging technology and long-term growth potential, with a target price based on a 31x PE for 2026 [3]

Summary of ASMPT Ltd Conference Call Company Overview - **Company**: ASMPT Ltd (0522.HK) - **Industry**: Technology Semiconductors - **Market Cap**: HK$27,912 million - **Current Price**: HK$70.20 - **Price Target**: HK$80.00 - **Rating Change**: From Equal-weight to Overweight Key Points Industry Dynamics - **AI Data Centers Driving Growth**: The demand for AI data centers is expected to significantly boost growth in ASMPT's mainstream tool business over the next 2-3 years, particularly in die bonders, wire bonders, and molding equipment [2][9][64] - **Shift in Power Infrastructure**: NVIDIA is leading a transition to 800 V HVDC data center power infrastructure, which will require advanced semiconductor components, thus increasing demand for ASMPT's tools [2][9] Financial Performance - **Earnings Estimates Raised**: EPS estimates for 2025, 2026, and 2027 have been increased by 36%, 4%, and 12% respectively, reflecting improved revenue assumptions and the anticipated growth from AI data centers [5][53] - **Revenue Growth Projections**: Expected revenue growth of 16% in 2026, driven by recovery in auto and industrial demand, increased TCB shipments, and AI data center demand [27][55] Market Position - **Auto & Industrial Mix at Historical Low**: The auto and industrial segment has dropped to 23% of revenue from a peak of 41% in 1H22, indicating limited downside risk as recovery is anticipated in 2026 and 2027 [4][10][64] - **Strong Competitiveness in China**: ASMPT is positioned as a strong competitor in advanced packaging and HBM development in China, benefiting from increased capital expenditure [3][21] Risks and Challenges - **Potential for Continued Soft Demand**: There is a risk that soft demand in the auto and industrial sectors may persist, which could impact revenue growth [29][30] - **Technological Competition**: Competitors may catch up in TCB technology, which could affect order allocation [30] Valuation and Investment Thesis - **Attractive Valuation**: ASMPT is currently trading at 18x the 2026 EPS, below its 10-year historical average of 27x, suggesting an attractive entry point for investors [5][56] - **Long-term Growth Drivers**: The company is expected to benefit from advancements in CoWoS, HBM, silicon photonics, and CPO capacity expansion [64] Conclusion - **Upgrade to Overweight**: The upgrade reflects confidence in ASMPT's ability to leverage AI data center demand and recover from low auto and industrial demand, with a revised price target of HK$80.00 indicating a potential upside of 14% from the current price [1][7][56]

Group 1 - HSBC Global Research has raised the target price for ASMPT by 10% to HKD 73.7, maintaining a "Hold" rating [1] - The upward revision in earnings per share for ASMPT for 2025 and 2026 is 3% and 10% respectively, which remains below market expectations by 4% and 3% [1] - The latest gross margin forecasts for ASMPT from HSBC for 2025, 2026, and 2027 are 40.4%, 41.9%, and 42.6%, compared to previous forecasts of 39.3% and 40.2% for 2025 and 2026 [1] Group 2 - The report indicates that there is still uncertainty in the competitive landscape, which influences the decision to maintain the "Hold" rating [1]

Investment Rating - The report maintains a "Buy" rating for ASMPT with a target price of 77.2 HKD, up from the previous 69 HKD [4][6]. Core Insights - ASMPT's 2Q25 revenue reached 34.0 billion HKD, showing a year-on-year increase of 1.8% and a quarter-on-quarter increase of 8.9%, closely aligning with Bloomberg consensus expectations [1][6]. - The order amount was 37.5 billion HKD, reflecting a year-on-year growth of 20.2% and a quarter-on-quarter growth of 11.9%, exceeding Bloomberg consensus expectations by 16% [1][2]. - The gross margin was reported at 39.7%, a slight decline of 33 basis points year-on-year and 119 basis points quarter-on-quarter, which is in line with expectations [1][2]. - Net profit for the quarter was 1.343 billion HKD, down 1.7% year-on-year but up 62.6% quarter-on-quarter, falling short of Bloomberg consensus expectations [1][2]. Revenue and Orders - The SEMI business revenue increased by 21.4% year-on-year and 0.8% quarter-on-quarter, driven by strong AI-related power management demand and improved OSAT capacity utilization in the Chinese market [2]. - SMT business revenue saw a year-on-year decline of 16.7% but a quarter-on-quarter increase of 22.6%, with orders increasing by 51.6% year-on-year and 29.3% quarter-on-quarter, driven by significant orders from smartphone clients and new AI server-related orders [2]. Advanced Packaging - Orders for TCB in the advanced packaging segment increased by 50% year-on-year in the first half of 2025, with successful installations for leading HBM3E 12H customers [3]. - The company is progressing towards mass production of AOR TCB for C2W applications, with competitive advantages in alignment and bonding accuracy for the second-generation HB tools expected to be delivered in Q3 [3]. Financial Projections - The report projects net profit increases of 3% for 2025, 8% for 2026, and 7% for 2027, resulting in net profits of 6.23 billion HKD, 10.35 billion HKD, and 16.27 billion HKD respectively [4][10]. - Corresponding EPS estimates are 1.50 HKD for 2025, 2.49 HKD for 2026, and 3.91 HKD for 2027 [4][10]. Valuation Metrics - The target price adjustment to 77.2 HKD is based on a 31x PE for 2026, compared to a comparable company average of 25.2x [4][32]. - The current market capitalization is approximately 26.32 billion HKD, with a closing price of 63.20 HKD as of July 23 [7].

Group 1 - The semiconductor sector in Hong Kong continues to strengthen, with ASMPT rising nearly 10% [1] - Hua Hong Semiconductor increased by over 8%, while SMIC and Shanghai Fudan both rose by over 5% [1] - Other companies such as Jingmen Semiconductor and Hongguang Semiconductor also experienced gains [1]

港股芯片股多数走强，ASMPT(00522.HK)涨超9%，华虹半导体(01347.HK)涨超7%，中芯国际 (00981.HK)涨超5%，上海复旦(01385.HK)涨超4%。 ...

Summary of ASMPT Conference Call Company Overview - The company reported a revenue of $837.6 million for the first half of 2025, representing a year-over-year increase of 31.7% driven by strong growth in advanced packaging business, which accounted for 39% of total revenue, approximately $326 million [2][3][4] Key Points Financial Performance - The overall revenue for the first half of 2025 was $837.6 million, with a year-over-year growth of 31.7% and a quarter-over-quarter growth of 6.1% [3] - Total orders reached $912.8 million, reflecting a year-over-year increase of 12.4% and a quarter-over-quarter increase of 10.5% [3] - Gross margin stood at 40.3%, with a quarter-over-quarter increase of 21 basis points but a year-over-year decrease of 65 basis points [3] - Operating profit for Q2 2025 was $169 million, showing a quarter-over-quarter increase of 5.9% and a year-over-year increase of 25.4% [10] - Adjusted net profit for Q2 was $134 million, with a quarter-over-quarter increase of 62.1% but a year-over-year decrease of 1.6% [10] Advanced Packaging Business - Advanced packaging business revenue accounted for 39% of total revenue, primarily due to strong demand for TCP tools, with TCB orders increasing by 50% year-over-year [2][4] - The company expects revenue for Q3 2035 to be between $400 million and $440 million, with a projected growth of 10% year-over-year [4][14] Market Dynamics - AI-driven demand in data centers has led to increased orders for new power management capabilities, particularly in the Chinese market [6] - The company has maintained close cooperation with leading CPU manufacturers and secured significant orders from a leading IDM company, enhancing its market share in photonics tools [7] Regional Performance - The Chinese market showed strong order growth, accounting for 36.7% of total revenue, driven by AI business performance and the electric vehicle market [8][13] - The company noted that the computer and communication market contributed 30% to total revenue, while the automotive market contributed 15% [12] Future Outlook - The company anticipates continued growth in TCB business driven by AI-related orders, with expectations for double-digit percentage growth in future bookings [4][14] - The semiconductor business is expected to gradually expand profit margins due to the increasing share of TCB and advanced packaging [20] Other Notable Insights - The SMT solutions segment reported revenue of $178.5 million in Q2 2025, with a quarter-over-quarter increase of 22.6% but a year-over-year decrease of 17.2% [11] - The company is actively assessing plans to return remaining capital to shareholders to enhance shareholder value [9] - The company has transitioned from trial production to mass production with leading foundries, leveraging advanced high-density ARTCB technology [18] Challenges and Risks - The company faces challenges in the semiconductor order flow, with expectations for improvement in Q3 driven by AI-related demand [16] - The TCB orders saw a decline in Q2, while HBM TCB orders remained stable, indicating potential waiting periods for logic application orders [22] This summary encapsulates the key insights and financial performance metrics from the ASMPT conference call, highlighting the company's growth trajectory, market dynamics, and future outlook.

July 23, 2025 12:31 AM GMT ASMPT Ltd | Asia Pacific M Update Mainstream semi start to benefit from AI demand Reaction to earnings Unchanged Modest shortfall Modest revision lower Impact to our thesis Financial results versus consensus Direction of next 12-month consensus EPS Source: Company data, Morgan Stanley Research ASMPT released its 2Q25 earnings report, and below are the highlights: Ethan.Jia@morganstanley.com +852 3963-2287 Morgan Stanley Taiwan Limited+ Morgan Stanley Securities (China) Co., Ltd. i ...