Financial Data and Key Metrics Changes - Group revenue for the first half of 2024 was HK$828.7 million, down 17.1% year-on-year and 5.8% half-on-half due to declines in both SEMI and SMT segments [68][66] - Adjusted net profit was HK$314.6 million, down 49.5% year-on-year but increased 158.1% half-on-half [39] - Group gross margin improved to 40.9%, up 67 basis points year-on-year and 276 basis points half-on-half, mainly driven by SEMI's favorable product mix [40][66] Business Line Data and Key Metrics Changes - SEMI segment revenue increased to HK$212.5 million in Q2 2024, a 20.9% quarter-on-quarter increase, driven by TCB [70] - SMT segment revenue was HK$214.8 million in Q2 2024, a decline of 4.7% quarter-on-quarter due to softness in automotive and industrial markets [71] - Advanced Packaging (AP) solutions contributed approximately 25% of group revenue in the first half of 2024, up from 22% the previous year [58] Market Data and Key Metrics Changes - China's contribution to group revenue increased from 30% to 36% year-on-year, while revenue from Europe and the Americas declined [74] - Automotive applications contributed about 24% of group revenue in the first half of 2024, approximately HK$200 million [65] - The communication market accounted for about 17% of group revenue, with growth driven by high-end smartphones [44] Company Strategy and Development Direction - The company remains optimistic about the prospects of its AP business, with a focus on capitalizing on the demand for generative AI and high-performance computing [29][76] - The strategy includes navigating through different industry cycles by leveraging a broad-based portfolio that includes SEMI and SMT solutions [57] - The company is committed to enhancing shareholder value through a dividend policy of 50% of earnings and is considering share buybacks [46][17] Management's Comments on Operating Environment and Future Outlook - Management noted that the recovery of the SEMI-mainstream business is taking longer than anticipated due to tepid consumer spending [47] - There is a positive outlook for the AP business, with expectations of increased demand driven by AI architecture [62] - The company anticipates revenue for Q3 2024 to be between $370 million to $430 million, reflecting a decline due to lower SMT revenue [91] Other Important Information - The group ended the first half with a backlog of about $820 million, and the book-to-bill ratio was marginally below 1 at 0.98 [67] - The company has won orders for two next-generation fluxless TCB solutions, indicating strong recognition of its technology [31][60] - The automotive market continues to be a significant contributor, despite recent softness [65] Q&A Session All Questions and Answers Question: Impact of geopolitical tensions on sales to China - Management acknowledged that geopolitical tensions could impact sales, particularly with potential restrictions on chip-making equipment to China, which accounted for 36% of total revenue [3] Question: Expectations for TCB shipments and market share - Management expressed confidence in maintaining market share for fluxless TCB tools, with shipments expected to begin in the second half of 2024 [80][81] Question: Recovery pace for SEMI and SMT in Q3 - Management indicated that SEMI bookings are expected to be flattish with an upside bias, while SMT continues to face headwinds due to market softness [104][106] Question: Trends in TCB shipments and customer engagement - Management noted that TCB shipments are expected to increase significantly in 2025, driven by demand for AI architecture [128]
ASMPT(ASMVY) - 2024 Q2 - Earnings Call Transcript