ASMPT Limited's (HKG:522) Stock Is Rallying But Financials Look Ambiguous: Will The Momentum Continue?

Simply Wall St.04-06

ASMPT (HKG:522) has had a great run on the share market with its stock up by a significant 45% over the last three months. But the company's key financial indicators appear to be differing across ...

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But the company's key financial indicators appear to be differing across ...</p>\n\n<a href=\"https://simplywall.st/stocks/hk/semiconductors/hkg-522/asmpt-shares/news/asmpt-limiteds-hkg522-stock-is-rallying-but-financials-look\">Source Link</a>\n\n</div>\n","source":"simplywall_highlight","html":"<!DOCTYPE html>\n<html>\n<head>\n<meta http-equiv=\"Content-Type\" content=\"text/html; charset=utf-8\" />\n<meta name=\"viewport\" content=\"width=device-width,initial-scale=1.0,minimum-scale=1.0,maximum-scale=1.0,user-scalable=no\"/>\n<meta name=\"format-detection\" content=\"telephone=no,email=no,address=no\" />\n<title>ASMPT Limited's (HKG:522) Stock Is Rallying But Financials Look Ambiguous: Will The Momentum Continue?</title>\n<style type=\"text/css\">\na,abbr,acronym,address,applet,article,aside,audio,b,big,blockquote,body,canvas,caption,center,cite,code,dd,del,details,dfn,div,dl,dt,\nem,embed,fieldset,figcaption,figure,footer,form,h1,h2,h3,h4,h5,h6,header,hgroup,html,i,iframe,img,ins,kbd,label,legend,li,mark,menu,nav,\nobject,ol,output,p,pre,q,ruby,s,samp,section,small,span,strike,strong,sub,summary,sup,table,tbody,td,tfoot,th,thead,time,tr,tt,u,ul,var,video{ font:inherit;margin:0;padding:0;vertical-align:baseline;border:0 }\nbody{ font-size:16px; line-height:1.5; color:#999; background:transparent; }\n.wrapper{ overflow:hidden;word-break:break-all;padding:10px; }\nh1,h2{ font-weight:normal; line-height:1.35; margin-bottom:.6em; }\nh3,h4,h5,h6{ line-height:1.35; margin-bottom:1em; }\nh1{ font-size:24px; }\nh2{ font-size:20px; }\nh3{ font-size:18px; }\nh4{ font-size:16px; }\nh5{ font-size:14px; }\nh6{ font-size:12px; }\np,ul,ol,blockquote,dl,table{ margin:1.2em 0; }\nul,ol{ margin-left:2em; }\nul{ list-style:disc; }\nol{ list-style:decimal; }\nli,li p{ margin:10px 0;}\nimg{ max-width:100%;display:block;margin:0 auto 1em; }\nblockquote{ color:#B5B2B1; border-left:3px solid #aaa; padding:1em; }\nstrong,b{font-weight:bold;}\nem,i{font-style:italic;}\ntable{ width:100%;border-collapse:collapse;border-spacing:1px;margin:1em 0;font-size:.9em; }\nth,td{ padding:5px;text-align:left;border:1px solid #aaa; }\nth{ font-weight:bold;background:#5d5d5d; }\n.symbol-link{font-weight:bold;}\n/* header{ border-bottom:1px solid #494756; } */\n.title{ margin:0 0 8px;line-height:1.3;color:#ddd; }\n.meta {color:#5e5c6d;font-size:13px;margin:0 0 .5em; }\na{text-decoration:none; color:#2a4b87;}\n.meta .head { display: inline-block; overflow: hidden}\n.head .h-thumb { width: 30px; height: 30px; margin: 0; padding: 0; border-radius: 50%; float: left;}\n.head .h-content { margin: 0; padding: 0 0 0 9px; float: left;}\n.head .h-name {font-size: 13px; color: #eee; margin: 0;}\n.head .h-time {font-size: 11px; color: #7E829C; margin: 0;line-height: 11px;}\n.small {font-size: 12.5px; display: inline-block; transform: scale(0.9); -webkit-transform: scale(0.9); transform-origin: left; -webkit-transform-origin: left;}\n.smaller {font-size: 12.5px; display: inline-block; transform: scale(0.8); -webkit-transform: scale(0.8); transform-origin: left; -webkit-transform-origin: left;}\n.bt-text {font-size: 12px;margin: 1.5em 0 0 0}\n.bt-text p {margin: 0}\n</style>\n</head>\n<body>\n<div class=\"wrapper\">\n<header>\n<h2 class=\"title\">\nASMPT Limited's (HKG:522) Stock Is Rallying But Financials Look Ambiguous: Will The Momentum Continue?\n</h2>\n\n<h4 class=\"meta\">\n\n\n2024-04-06 07:08 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://simplywall.st/stocks/hk/semiconductors/hkg-522/asmpt-shares/news/asmpt-limiteds-hkg522-stock-is-rallying-but-financials-look><strong>Simply Wall St.</strong></a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\n<p>ASMPT (HKG:522) has had a great run on the share market with its stock up by a significant 45% over the last three months.   But the company's key financial indicators appear to be differing across ...</p>\n\n<a href=\"https://simplywall.st/stocks/hk/semiconductors/hkg-522/asmpt-shares/news/asmpt-limiteds-hkg522-stock-is-rallying-but-financials-look\">Source Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","isBrief":false,"type":0,"news_type":1,"symbol":"00522","symbol_name":"ASMPT","start_time":0,"source_url":"https://simplywall.st/stocks/hk/semiconductors/hkg-522/asmpt-shares/news/asmpt-limiteds-hkg522-stock-is-rallying-but-financials-look","article_id":"2425108540","we_media_id":null,"thumbnails":["https://images.simplywall.st/asset/industry/8211000-choice2-main-header/1585186947894"],"rights":null,"url":"https://stock-news.laohu8.com/highlight/detail?id=2425108540","pubTimestamp":1712358527,"sourceInfo":{"source_id":"simplywall_highlight","name":"Simply Wall St."},"weMediaInfo":null,"summary":"ASMPT (HKG:522) has had a great run on the share market with its stock up by a significant 45% over the last three...","collect":0,"end_time":0,"defaultTopTitle":"simplywall.st","property":[],"viewcount":null,"language":"en","relate_stocks":{"00522":"ASMPT","LU0348825331.USD":"ALLIANZ CHINA EQUITY \"A\" (USD) INC","LU0348783233.USD":"安联东方收入型 CI A Dis美元","BK1589":"北水核心资产","LU0417516571.SGD":"Allianz Oriental Income Cl AT Acc SGD","LU0417516902.SGD":"Allianz China Equity Cl AT Acc SGD","LU0348784397.USD":"ALLIANZ ORIENTAL INCOME \"A\" (USD) ACC","BK1169":"半导体设备","LU2039709279.SGD":"MANULIFE GF DRAGON GROWTH \"AA\" (SGDHDG) INC"},"translate_title":"ASMPT有限公司（HKG：522）的股票正在反弹，但财务状况看起来模糊不清：这种势头会持续下去吗？","themeId":null,"isJumpTheme":false,"ttsUrl":null,"symbols_score_info":{"00522":1},"content_text":"ASMPT (HKG:522) has had a great run on the share market with its stock up by a significant 45% over the last three months.   But the company's key financial indicators appear to be differing across the board and that makes us question whether or not the company's current share price momentum can be maintained.      Specifically, we decided to study ASMPT's  ROE in this article.    Return on equity or ROE is an important factor to be considered by a shareholder because it tells them how effectively their capital is being reinvested.  Simply put, it is used to assess the profitability of a company in relation to its equity capital.  Check out our latest analysis for ASMPT  How Is ROE Calculated?  ROE can be calculated by using the formula:  Return on Equity = Net Profit (from continuing operations) ÷ Shareholders' Equity So, based on the above formula, the ROE for ASMPT is:4.5% = HK$712m ÷ HK$16b (Based on the trailing twelve months to December 2023). The 'return' refers to a company's earnings over the last year.  One way to conceptualize this is that for each HK$1 of shareholders' capital it has, the company made HK$0.05 in profit.   Why Is ROE Important For Earnings Growth?  So far, we've learned that ROE is a measure of a company's profitability.  Based on how much of its profits the company chooses to reinvest or \"retain\", we are then able to evaluate a company's future ability to generate profits.  Assuming all else is equal, companies that have both a higher return on equity and higher profit retention are usually the ones that have a higher growth rate when compared to companies that don't have the same features.  ASMPT's Earnings Growth And 4.5% ROE   When you first look at it, ASMPT's ROE doesn't look that attractive.   A quick further study shows that the company's ROE doesn't compare favorably to the industry average of 12% either.   However, the moderate 13% net income growth seen by ASMPT over the past five years is definitely a positive.  So, there might be other aspects that are positively influencing the company's earnings growth.  Such as - high earnings retention or an efficient management in place.     We then compared ASMPT's net income growth with the industry and found that the company's growth figure is lower than the average industry growth rate of 27% in the same 5-year period, which is a bit concerning.   SEHK:522 Past Earnings Growth April 5th 2024 The basis for attaching value to a company is, to a great extent, tied to its earnings growth.  It’s important for an investor to know whether the market has priced in the company's expected earnings growth (or decline).   This then helps them determine if the stock is placed for a bright or bleak future.    One good indicator of expected earnings growth is the P/E ratio which determines the price the market is willing to pay for a stock based on its earnings prospects. So, you may want to check if ASMPT is trading on a high P/E or a low P/E, relative to its industry.    Is ASMPT Efficiently Re-investing Its Profits?   The high three-year median payout ratio of 54% (or a retention ratio of 46%) for ASMPT suggests that the company's growth wasn't really hampered despite it returning most of its income to its shareholders.      Besides, ASMPT has been paying dividends for at least ten years or more. This shows that the company is committed to sharing profits with its shareholders.      Our latest analyst data shows that the future payout ratio of the company over the next three years is expected to be approximately 52%.   However, ASMPT's ROE is predicted to rise to 13% despite there being no anticipated change in its payout ratio.      Summary    On the whole, we feel that the performance shown by ASMPT can be open to many interpretations.      While no doubt its earnings growth is pretty respectable, the low profit retention could mean that the company's earnings growth could have been higher, had it been paying reinvesting a higher portion of its profits. An improvement in its ROE could also help future earnings growth.       That being so, the latest analyst forecasts show that the company will continue to see an expansion in its earnings.     To know more about the company's future earnings growth forecasts take a look at this free report on analyst forecasts for the company to find out more. Valuation is complex, but we're helping make it simple.Find out whether ASMPT is potentially over or undervalued by checking out our comprehensive analysis, which includes fair value estimates, risks and warnings, dividends, insider transactions and financial health.View the Free AnalysisHave feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. 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