Everbright Securities has issued a research report upgrading ASMPT to a "Buy" rating. The report highlights strong AI-driven demand, recovery in mainstream and SMT businesses, and an acceleration in TCB equipment shipments expected by 2026. The firm projects the global TCB equipment market to reach $1.6 billion by 2028, enhancing the long-term outlook for ASMPT's TCB operations.
Due to business restructuring, the sale of the NEXX business, now classified as discontinued operations, will impact future profit forecasts. The sale is anticipated to generate a one-time gain in 2026. Consequently, Everbright Securities has raised its net profit forecasts for 2026 and 2027 to HK$1.676 billion and HK$2.061 billion, respectively, representing increases of 24% and 7% from previous estimates. This corresponds to year-on-year growth of 54.5% and 23.0%.
With smooth progress in TCB and HB equipment, the company is positioned for bulk shipments to leading foundry customers. Future shipments for HBM4 and 16-layer/20-layer HBM are expected to further strengthen TCB demand prospects. The advanced packaging business is viewed as a long-term driver for both performance and valuation.
The company reported its Q4 and full-year 2025 results on March 4, 2026. Q4 revenue, on a continuing operations basis excluding NEXX, reached $509 million (approximately HK$3.959 billion), up 30.9% year-on-year and 12.2% quarter-on-quarter, near the upper end of the guided range of $470-$530 million and exceeding market expectations of $497 million. This growth was primarily driven by stronger sales in the SEMI and SMT segments, with TCB equipment showing particularly robust performance.
Revenue from the Semiconductor Solutions segment was $246 million, increasing 19.5% year-on-year and 9.4% sequentially, fueled by demand from AI-related applications and photonic packaging. The SMT segment revenue was $263 million, surging 43.8% year-on-year and 15% quarter-on-quarter, supported by demand from AI server motherboards, China's new energy vehicle sector, and bulk smartphone orders.
The Q4 adjusted gross margin was 35.8%, down 101 basis points year-on-year and 175 basis points quarter-on-quarter, falling short of the market expectation of 38.9%. The sequential decline was attributed to lower margins in both SEMI and SMT businesses, while the annual drop was mainly due to SEMI margin contraction, partially offset by improved SMT profitability.
Reported net profit for Q4 was HK$1.110 billion, significantly influenced by the completion of the AAMI sale, which generated a gain of HK$1.11 billion. Adjusted net profit was HK$120 million, soaring 390.7% year-on-year and 42.2% quarter-on-quarter, driven by revenue growth and improved operating leverage.
Everbright Securities outlined the following key points: The company is continuously optimizing its business structure to focus on back-end packaging. The sale of the 49%-owned AAMI business, which was not consolidated in recent years, has been completed, yielding approximately HK$1.11 billion in cash. The NEXX business, classified as held for sale with 2025 revenue around $100 million, is more focused on mid-process technologies; its divestiture will allow resources to be concentrated on back-end packaging development. The company has initiated a strategic review for the SMT Solutions division, exploring options such as sale, joint venture, spin-off, or listing to support its long-term development while enabling greater focus on the Semiconductor Solutions business.
AI demand is driving order growth, with TCB equipment performing strongly. Total new orders in Q4 2025 were approximately $500 million, up 28.2% year-on-year and 5.0% sequentially; the order backlog stood at $793 million. For full-year 2025, new orders reached $1.857 billion, a 21.7% annual increase, with a book-to-bill ratio of 1.05, the highest since 2021.
Within Semiconductor Solutions, new orders were $253 million, up 2.3% year-on-year and 15.4% quarter-on-quarter, driven by TCB equipment orders from advanced logic customers and increased market share for high-end die bonders. The segment's adjusted gross margin was 40.3%, declining 292 basis points year-on-year and 102 basis points sequentially, mainly due to product mix changes and inventory provisions. The SMT segment saw new orders of $246 million, surging 73.3% year-on-year but dipping 3.9% quarter-on-quarter, with annual growth fueled by AI servers and Chinese NEV demand. Its gross margin was 31.6%, up 199 basis points year-on-year but down 225 basis points quarterly, affected by weaker automotive and industrial demand and the recognition of lower-margin orders.
For Q1 2026, the company guided revenue between $470 million and $530 million, implying a slight sequential dip of 1.8% but a strong 29.5% year-on-year increase. The midpoint exceeds market consensus. SEMI revenue is expected to grow sequentially, driven by TCB and high-end die bonder shipments, while SMT revenue may see a seasonal decline. The SEMI gross margin is projected to recover to the mid-40% range, with SMT margins remaining stable despite short-term softness in automotive and industrial demand. Order momentum is anticipated to strengthen significantly in Q1 2026, with guidance suggesting a 20% sequential increase, potentially reaching the highest quarterly order level in four years, supported by AI data center investments boosting demand for advanced packaging and mainstream semiconductor equipment.
Driven by TCB, advanced packaging revenue grew 30.2% year-on-year in 2025, accounting for 30% of total revenue, a 4 percentage point increase. TCB revenue surged approximately 146% annually, achieving record growth. The company targets a 35%-40% market share in the projected $1.6 billion global TCB equipment market by 2028.
In the logic segment, ASMPT's TCB solutions maintain a preferred status in advanced logic packaging, with strong order growth in 2025 continuing into early 2026. For chip-to-wafer applications, its ultra-fine-pitch TCB solution with proprietary plasma-activated oxide removal technology secured multi-tool orders from a leading advanced logic customer in Q1 2026. In the memory segment, the company is deepening collaborations, delivering TCB equipment in Q4 2025 to gain further market share. For HBM4 progress, it has received orders from multiple customers for HBM4-12Hi applications and is developing HBM4-16Hi. Flux-based TCB equipment is undergoing sample validation, while the flux-free AOR TCB process is in customer certification.
For HB equipment, 2025 saw formal customer acceptance and increased tool deliveries, with the second-generation platform offering higher alignment accuracy and throughput. The company is also expanding into areas such as optical module packaging, CPO, and system-in-package.
Risk factors include potential tightening of US export controls, weaker downstream demand, intensified industry competition, and delays in technological advancements.
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