HTSC·2025-10-30 08:50Investment Rating - The report maintains a "Buy" rating for the company with a target price of HKD 103.6, up from the previous target of HKD 87.1 [4][6]. Core Insights - The company reported a revenue of HKD 36.6 billion for Q3 2025, representing a year-on-year increase of 9.5% and a quarter-on-quarter increase of 7.6%. The adjusted net profit was HKD 1.019 billion, a significant increase of 245.2% year-on-year [1][4]. - The company expects Q4 revenue guidance to be between USD 4.70 billion and USD 5.30 billion, with a median estimate that exceeds Bloomberg consensus expectations, indicating a year-on-year growth of 14.3% and a quarter-on-quarter growth of 6.8% [1][4]. Business Segments - In Q3 2025, the SEMI segment generated revenue of HKD 18.8 billion, a year-on-year increase of 5.0%, driven by strong demand for power management applications. However, it saw a quarter-on-quarter decline of 6.5% due to timing impacts from customer AI technology roadmaps and delivery disruptions caused by a typhoon [2]. - The SMT segment performed strongly, with revenue reaching HKD 17.8 billion, reflecting a year-on-year increase of 14.6% and a quarter-on-quarter increase of 28.0%. The order volume for SMT increased by 51.8% year-on-year to HKD 19.9 billion [2]. Advanced Packaging Developments - The company’s TCB solution has gained competitive advantages in the storage sector, securing multiple HBM4 orders in Q3 2025. The C2W solution is preparing for mass production after successful validation by a leading foundry [3]. - The company continues to lead the 800G transceiver market and is involved in collaborations for 1.6T solutions, indicating strong demand in advanced packaging for 2026 [3]. Financial Forecasts - The report adjusts the 2025 estimated net profit down by 28% to HKD 3.4 billion, while revenue estimates for 2025, 2026, and 2027 are increased by 2%, 3%, and 3% respectively. The net profit estimates for 2026 and 2027 are raised by 5% to HKD 12.3 billion and HKD 18.4 billion respectively [4][12]. - The expected EPS for 2026 and 2027 is projected to be HKD 2.96 and HKD 4.43 respectively, reflecting the company's growth potential in the advanced packaging sector driven by AI [4][12].