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]

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 ...

Financial Data and Key Metrics Changes - The group achieved revenue of approximately US$837.6 million for the first half of 2025, with a year-on-year growth of 31.7% and a half-on-half growth of 6.1% [17] - The group's gross margin was 40.3%, up 121 basis points half-on-half but down 65 basis points year-on-year [18] - Adjusted net profit reached HKD218.1 million, up 95.7% half-on-half, but down 12.2% year-on-year [19][20] - For Q2 2025, revenue totaled approximately US$436.1 million, an increase of 8.9% quarter-on-quarter and 1.8% year-on-year [22] Business Line Data and Key Metrics Changes - Advanced Packaging (AP) revenue contributed around 39% of the group's total revenue, approximately US$326 million, driven by strong demand for thermal compression bonding (TCB) tools [8][9] - Semiconductor Solutions segment revenue grew to US$257.6 million in Q2 2025, up 1% quarter-on-quarter and 20.9% year-on-year [25] - SMT Solutions segment delivered revenue of US$178.5 million in Q2 2025, a 22.6% increase quarter-on-quarter but a 17.2% decline year-on-year [28] Market Data and Key Metrics Changes - China accounted for 36.7% of group revenue, with strong growth driven by AI demand [31] - The automotive end market contributed 15% to group revenue, supported by electric vehicle demand in China [30] - The computer end market became the largest contributor to group revenue, accounting for 30%, driven by AI-related applications [21] Company Strategy and Development Direction - The company expects sustained growth in Advanced Packaging, particularly benefiting from AI tailwinds and technological leadership [32] - The group aims to solidify its TCB market leadership in both memory and logic applications, projecting a total addressable market of US$1 billion by 2027 [32] - The mainstream business will be supported by momentum in China and emerging demand for AI data centers, although automotive and industrial markets are expected to remain soft [33] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in continued demand for AI-related applications, particularly in the semiconductor sector [5][6] - The company acknowledged uncertainties related to tariff policies but emphasized its global presence as a means to navigate potential impacts [33] - Management noted that the group has maintained a gross margin above 40% despite foreign exchange headwinds [7] Other Important Information - The group has maintained a diversified customer base, with the top five customers accounting for approximately 24.8% of total revenue in the first half of 2025 [31] - The company has an existing dividend policy of distributing about 50% of annual profits as dividends, with a recommended dividend of HKD0.26 per share for the first half of 2025 [20] Q&A Session Summary Question: Booking trend into the third quarter across different businesses - Management expects Q3 bookings to be slightly down quarter-on-quarter but up double digits year-on-year, with AI-related applications driving demand [38][40] Question: SMT bookings recovery in the second quarter - SMT bookings showed strong recovery due to bulk orders, but future orders may not be as material as those in Q2 [42] Question: Order opportunities for HBM in the next 12-18 months - Management is confident in continued order opportunities for HBM, particularly with the introduction of new AI chips [50][51] Question: Differentiation in hybrid bonding tools - The company believes its second-generation hybrid bonding tools will be competitive, addressing customer pain points effectively [103] Question: Sustainability of tax credits - Management indicated that the tax credits received in Q2 are a one-off and not expected to recur in the near term [82]

Financial Data and Key Metrics Changes - The group achieved revenue of approximately US$837.6 million for the first half of 2025, representing a year-on-year growth of 31.7% and a half-on-half growth of 6.1% [15] - The group's gross margin was 40.3%, up 121 basis points half-on-half but down 65 basis points year-on-year [16] - Adjusted net profit for the first half was HKD218.1 million, up 95.7% half-on-half but down 12.2% year-on-year [18] - For Q2 2025, revenue totaled approximately US$436.1 million, an increase of 8.9% quarter-on-quarter and 1.8% year-on-year [21] - The group's bookings reached US$912.8 million for the first half, showing a growth of 10.5% half-on-half and 12.4% year-on-year [15] Business Line Data and Key Metrics Changes - Advanced Packaging (AP) revenue contributed approximately 39% of the group's total revenue, amounting to around US$326 million, driven by strong demand for thermal compression bonding (TCB) tools [6][7] - The Semiconductor Solutions segment's revenue grew to US$257.6 million in Q2 2025, up 1% quarter-on-quarter and 20.9% year-on-year [24] - SMT Solutions segment revenue was US$178.5 million in Q2 2025, a 22.6% increase quarter-on-quarter but a decline of 17.2% year-on-year [27] Market Data and Key Metrics Changes - The computer end market became the largest contributor to group revenue, accounting for 30%, driven by AI-related applications [20] - The automotive end market contributed 15% to group revenue, supported by electric vehicle demand in China [20] - Revenue from China increased to 36.7% of group revenue, with strong growth driven by AI demand [31] Company Strategy and Development Direction - The company expects revenue for Q3 2025 to be between US$445 million and US$505 million, indicating confidence in sustained AP revenue and improvement in SMT revenue [32] - The group aims to solidify its TCB market leadership in both memory and logic applications, projecting a total addressable market of US$1 billion by 2027 [32] - The mainstream business will be supported by momentum in China and emerging demand for AI data centers, although automotive and industrial markets are expected to remain soft in the near term [33] Management's Comments on Operating Environment and Future Outlook - Management noted strong demand driven by AI tailwinds across various markets, particularly in advanced packaging and mainstream businesses [4][5] - The company acknowledged uncertainties related to tariff policies but emphasized its global presence as a means to navigate potential impacts [33] - Management expressed confidence in maintaining gross margins above 40% despite foreign exchange headwinds [6] Other Important Information - The group maintained a diversified customer base, with the top five customers accounting for approximately 24.8% of total revenue in the first half of 2025 [31] - The company has an existing dividend policy of distributing about 50% of annual profits as dividends, recommending a dividend of HKD0.26 per share for the first half of 2025 [19] Q&A Session Summary Question: Booking trend into the third quarter across different businesses - Management expects Q3 bookings to be slightly down quarter-on-quarter but up double digits year-on-year, with strong momentum in AI-related bookings [38][40] Question: SMT bookings recovery in the second quarter - SMT bookings showed recovery due to bulk orders, but future orders may not be as material as those in Q2 [42] Question: Order opportunities within HBM and competition - Management is confident in their HBM market position and expects to continue winning orders due to their technological advantages [51][52] Question: Market share in hybrid bonding - The company is well-positioned in the hybrid bonding market with competitive features in their second-generation tools [103] Question: China revenue and localization trends - The company is seeing increased demand from the consumer market and electric vehicles in China, with a competitive pricing and margin profile [106]

The information contained in this presentation is provided for informational purpose only and should not be relied upon for the purpose of making any investment or for any other purpose. Some of the information used in preparing this presentation was obtained from third parties or public sources. The information contained in this presentation has not been independently verified. No representation or warranty, expressed or implied, is made as to, and no reliance should be placed on, the fairness, reasonablen ...

Core Viewpoint - ASMPT reported a mixed performance for the first half of 2025, with revenue growth driven by AI-related applications, while facing challenges in profitability due to foreign exchange impacts and tax incentives [1][3]. Financial Performance - Sales revenue reached HKD 6.53 billion, a year-on-year increase of 0.7% but a decrease of 3.3% compared to the previous half [1]. - Net profit after tax was HKD 217 million, down 30.9% year-on-year but up 672.7% half-on-half [1]. - Adjusted profit was HKD 218 million, reflecting a year-on-year decrease of 30.7% but a half-on-half increase of 95.7% [1]. Market Contribution - The computer terminal market contributed the most to total sales, accounting for 30% of revenue, driven by AI applications in memory and logic sectors [1]. - The automotive terminal market was the second-largest source, making up 15% of total sales, benefiting from demand for electric vehicles in China [1]. - The communications terminal market accounted for 13% of total sales, supported by demand for photonics and high-end smartphones [1]. Order and Backlog - Total new orders amounted to HKD 7.11 billion, with a year-on-year growth of 12.4% and a half-on-half increase of 10.5% [2]. - The backlog of unfulfilled orders reached HKD 6.85 billion, with an order-to-ship ratio of 1.09 [2]. Regional Performance - Sales in China grew year-on-year, increasing its share of total sales to 36.7%, while Korea and Taiwan also saw increases [2]. - Sales in Europe and the Americas declined due to weak market conditions in surface mount technology solutions, with Europe’s share dropping to 11.4% and the Americas to 12.3% [2]. Future Outlook - The company expects third-quarter sales revenue to be between USD 445 million and USD 505 million, indicating a year-on-year growth of 10.8% and a quarter-on-quarter increase of 8.9% [3]. - The company remains confident in sustainable growth in advanced packaging sales, driven by the AI wave and its technological leadership [3]. - The total potential market for TCB is projected to reach USD 1 billion by 2027, with a focus on maintaining leadership in memory and logic applications [3].