UBS: ASMPT (00522) third-quarter orders far beat expectations, reaffirming the “buy” target price of HK$200

The Zhitong Finance App learned that UBS released a research report saying that ASMPT (00522) had strong order performance in the third quarter, reaching US$1.1 billion, up 25% quarterly and 138% year-on-year, higher than the previous guidance of high quarterly unit growth. The SEMI and SMT businesses both recorded record orders; the bank reaffirmed its “buy” rating and maintained a target price of HK$200.

According to the bank, the record high number of orders benefited from strong artificial intelligence demand for thermocompression bonding machines (TCB), surface mount technology (SMT) and photonic equipment, as well as one-time SMT orders. The order-to-sales ratio in the third quarter reached 1.69, the strongest level since the first quarter of 2021. The gross profit margin for the third quarter was 42.1%, better than market concerns, and benefited from improvements in scale and the SMT and SEMI product portfolio. The company indicated that sales for the fourth quarter increased by 4.6% on a quarterly median basis, in line with the bank's expectations, driven by SMT double-digit growth, while SEMI remained flat due to the long delivery period for advanced packaging products; orders for the fourth quarter were expected to be slightly lower than in the third quarter due to early confirmation of some orders.

The bank expects logic chips to become a more important driver for TCB to reach the market from 2027 to 2028, and sales growth in the photonics business is expected to accelerate further in the second half of the year and continue until 2027. The bank raised its 2027 earnings forecast per share by 4% to HK$7.71.