Citi has released a research report stating that the outlook for advanced packaging demand is robust, and ASMPT's mainstream semiconductor business remains resilient. The firm reiterates a 'Buy' rating on the stock with a target price of HK$250, based on 40 times the forecast 2027 price-to-earnings ratio.
ASMPT reported second-quarter results that significantly exceeded both market expectations and the company's own guidance. This was driven by strong performance in both its semiconductor and SMT (Surface Mount Technology) segments. Revenue for the period rose 52% year-on-year to HK$4.936 billion (approximately US$630 million), surpassing the company's original guidance range of US$540 million to US$600 million. Overall gross margin improved by 2.9 percentage points sequentially to 42.4%, also outperforming both market and Citi's forecasts.
The midpoint of ASMPT's third-quarter revenue guidance is 11% higher than the consensus market estimate. Even at the low end of the guidance range, this would represent a 40% year-on-year increase. The company's book-to-bill ratio remains at a healthy level of 1.43, and the SMT business achieved a record order volume.
Citi points out that AI-driven orders for advanced packaging, including thermal compression bonding for HBM and CoW applications, combined with the ongoing recovery in its mainstream semiconductor and SMT businesses, will support strong revenue and profit growth. A potential sale of the SMT business could further solidify its market position as a leading supplier of advanced packaging solutions, driving a valuation re-rating.
The bank also lists downside risks, including a slowdown in AI infrastructure investment, loss of key customers, reduced demand for thermal compression bonding due to alternative technologies, intensified industry competition, and the expansion of export restrictions to back-end equipment.
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