ASMPT (0522.HK) Conference Call Summary Company Overview - ASMPT is the world's largest assembly and packaging equipment supplier for the semiconductor and LED industries, serving chip manufacturers and consumer electronics manufacturers [19][20]. Key Industry Insights - The semiconductor industry is experiencing a recovery, particularly driven by increasing investments in AI technology [1][4]. - The Total Addressable Market (TAM) for TCB (Through Silicon Via) is expected to exceed US$1 billion by 2027, fueled by robust global AI infrastructure investments [3]. Financial Performance - **3Q25 Results**: - Adjusted Gross Profit Margin (GPM) decreased by 2 percentage points quarter-over-quarter to 37.7% due to a shift in product mix towards more wire bonders [2]. - Adjusted profit was HK$102 million, significantly below market expectations of HK$201 million [2]. - **4Q25 Guidance**: - Revenue guidance is set between US$470-530 million (HK$3.7-4.1 billion), which is above consensus estimates [2]. - Bookings are expected to remain flat quarter-over-quarter, with mid-teens percentage growth in SEMI bookings [2]. Growth Opportunities - **TCB and HB Potential**: - Significant orders for C2S TCB are anticipated to contribute to revenue in early 2026 [3]. - C2W TCB revenue is expected to commence at a leading foundry, indicating strong demand [3]. - The company is collaborating with logic and memory makers on Gen 2 HB, which presents future growth potential [3]. - **Traditional Business Recovery**: - The traditional side of the business is showing signs of recovery, particularly in mainstream SEMI and SMT, driven by AI-related applications and demand recovery in China [4]. Valuation and Investment Strategy - The target price has been raised to HK$100 from HK$85, reflecting an industry re-rating based on expanding AI opportunities [5][21]. - The expected share price return is 19.3%, with a total expected return of 21.8% including dividends [7]. Earnings Summary - **Projected Earnings**: - 2025E: Net Profit of HK$155 million, EPS of HK$0.37, with a significant decline from previous years [6]. - 2026E: Expected recovery with net profit projected at HK$1,475 million and EPS of HK$3.53, indicating an 847.2% growth [6]. - 2027E: Further growth anticipated with net profit of HK$1,995 million and EPS of HK$4.78 [6]. Risks - Potential risks include a slowdown in AI infrastructure investment, loss of TCB market share, reduced demand due to alternative technologies, and intensifying industry competition [22]. Conclusion - ASMPT is positioned to benefit from the recovery in the semiconductor industry, particularly through AI-driven advanced packaging solutions. The company’s strategic focus on TCB and HB technologies, along with a recovering traditional business, supports a positive outlook for future earnings growth and share price appreciation [20][21].