Core Insights - ASE Technology Holding Co., Ltd. reported unaudited net revenues of NT$150,750 million for 2Q25, representing a year-over-year increase of 7.5% and a sequential increase of 1.8% [1] - Net income attributable to shareholders for the quarter was NT$7,521 million, down from NT$7,778 million in 2Q24 and NT$7,554 million in 1Q25 [1] - Basic earnings per share for 2Q25 were NT$1.74 (US$0.111 per ADS), compared to NT$1.80 for 2Q24 and NT$1.75 for 1Q25 [1] Financial Performance - Net revenues from packaging operations, testing operations, EMS operations, and others accounted for approximately 49%, 11%, 39%, and 1% of total net revenues, respectively [6] - Cost of revenues for the quarter was NT$125,063 million, an increase from NT$123,260 million in 1Q25 [6] - Gross margin increased by 0.2 percentage points to 17.0% in 2Q25 from 16.8% in 1Q25 [6] - Operating margin was 6.8% in 2Q25, compared to 6.5% in 1Q25 [6] Non-Operating Items - Net foreign exchange gain was NT$11,885 million, primarily due to the depreciation of the U.S. dollar against the New Taiwan dollar [3] - Total non-operating expenses for the quarter were NT$938 million [6] - Income before tax was NT$9,255 million in 2Q25, compared to NT$9,810 million in 1Q25 [6] Customer Concentration - The five largest customers accounted for approximately 43% of total net revenues in 2Q25, down from 44% in 1Q25 [11] - One customer represented more than 10% of total net revenues in 2Q25 [11] - Top 10 customers contributed 60% of total net revenues in 2Q25, compared to 61% in 1Q25 [11] Capital Expenditures - Equipment capital expenditures in 2Q25 totaled US$992 million, with US$690 million allocated to packaging operations [11] - Total unused credit lines amounted to NT$355,299 million as of June 30, 2025 [11] - Current ratio was 1.02 and net debt to equity ratio was 0.52 as of June 30, 2025 [11]

Market Overview - Wall Street's winning streak continues, driven by positive trade news and strong economic data, with the S&P 500 reaching a record high following a significant trade deal between the United States and Japan, which lowers tariffs and opens up $550 billion in new investments [1] - Retail sales exceeded expectations in June, and jobless claims decreased, indicating a robust labor market and steady consumer spending despite ongoing tariff concerns [1][9] Trade Negotiations and Economic Environment - Progress in trade negotiations with the U.K., Indonesia, and the Philippines, along with positive signals from China and the EU, creates an encouraging backdrop for equities [2] - The current earnings season is contributing to market momentum, suggesting that focusing on relative price strength can help investors identify leading stocks [2] Stock Recommendations - Recommended stocks based on relative price strength include Western Digital Corporation (WDC), Flowserve Corporation (FLS), OPENLANE, Inc. (KAR), AngloGold Ashanti plc (AU), and Jabil Inc. (JBL) [3][9] - These stocks are outperforming their peers, supported by strong relative price strength metrics [9] Relative Price Strength Strategy - Earnings growth and valuation multiples are crucial for assessing a stock's potential returns and its performance relative to peers [4] - Investors are advised to avoid underperforming stocks and focus on those that are outperforming their respective industries or benchmarks [5] Screening Parameters - Stocks are screened based on relative price changes over 12 weeks, 4 weeks, and 1 week, as well as positive current-quarter estimate revisions [8] - Stocks that have shown better performance than the S&P 500 over the last 1 to 3 months and have solid fundamentals are considered for investment [6] Company Profiles - **Western Digital Corporation (WDC)**: Market cap of $23.4 billion, expected EPS growth of 2,465% year-over-year for fiscal 2025, with a trailing four-quarter earnings surprise of approximately 7.3% [11][12] - **Flowserve Corporation (FLS)**: Market cap not specified, expected EPS growth rate of 14.2% over three to five years, with a 22.1% year-over-year growth estimate for 2025 [13][14] - **OPENLANE, Inc. (KAR)**: Market cap of $2.7 billion, expected EPS growth of 17.7% year-over-year for 2025, shares up 44% in a year [14][15] - **AngloGold Ashanti plc (AU)**: Market cap of $21.8 billion, expected EPS growth of 125.8% year-over-year for 2025, shares up 89% in a year [16] - **Jabil Inc. (JBL)**: Market cap not specified, expected EPS growth rate of 16.6% over three to five years, with a 10.6% year-over-year growth estimate for 2025 [17][18]

Core Viewpoint - ASE Technology Holding Co., Ltd. reported a net revenue of NT$148,153 million for Q1 2025, reflecting an 11.6% increase year-over-year but an 8.7% decrease sequentially. The net income attributable to shareholders was NT$7,554 million, up from NT$5,660 million in Q1 2024 but down from NT$9,312 million in Q4 2024 [1][3][16]. Financial Performance - **Net Revenues**: NT$148,153 million in Q1 2025, up 11.6% YoY, down 8.7% QoQ [1][16]. - **Net Income**: NT$7,554 million in Q1 2025, up from NT$5,660 million in Q1 2024, down from NT$9,312 million in Q4 2024 [1][16]. - **Earnings Per Share**: Basic EPS of NT$1.75 (US$0.106) and diluted EPS of NT$1.64 (US$0.100) for Q1 2025 [1][16]. Revenue Breakdown - **ATM Operations**: Net revenues of NT$86,668 million, up 17.3% YoY, down 1.9% QoQ [5][15]. - **EMS Operations**: Net revenues of NT$62,295 million, up 4.9% YoY, down 16.8% QoQ [5][18]. Cost Structure - **Cost of Revenues**: NT$123,260 million for Q1 2025, down from NT$135,633 million in Q4 2024 [6][16]. - **Raw Material Costs**: NT$72,343 million, representing 49% of total net revenues [6]. - **Labor Costs**: NT$16,997 million, representing 11% of total net revenues [6]. Margins - **Gross Margin**: Increased to 16.8% in Q1 2025 from 16.4% in Q4 2024 [6]. - **Operating Margin**: Decreased to 6.5% in Q1 2025 from 6.9% in Q4 2024 [6]. Non-Operating Items - **Net Interest Expense**: NT$1,256 million [6]. - **Net Foreign Exchange Loss**: NT$1,675 million, primarily due to the appreciation of the U.S. dollar against the New Taiwan dollar [6]. - **Net Gain on Valuation of Financial Assets**: NT$2,873 million [6]. Customer Concentration - The top five customers accounted for approximately 44% of total net revenues in Q1 2025, with two customers each contributing over 10% [12]. - The top ten customers contributed 61% of total net revenues in Q1 2025, compared to 60% in Q4 2024 [12]. Capital Expenditures - Equipment capital expenditures in Q1 2025 totaled US$892 million, with significant allocations to packaging and testing operations [12]. Liquidity and Capital Resources - Current ratio was 1.04 and net debt to equity ratio was 0.41 as of March 31, 2025 [12]. - Total unused credit lines amounted to NT$358,413 million [12]. Company Overview - ASE Technology Holding Co., Ltd. is a leading provider of semiconductor manufacturing services, offering comprehensive solutions in assembly and testing, with a global presence across multiple countries [9].