Key Takeaways:
Key Takeaways:
Citi reiterated its Buy rating on ASMPT Ltd. (00522.HK) with a HKD250 price target, saying the semiconductor equipment maker's second-quarter results and third-quarter guidance both far exceeded expectations.
"The results validate our positive thesis on ASMPT's AI-driven advanced packaging opportunity," Citi Research said in a note published Thursday. The broker highlighted that the company's book-to-bill ratio remained at a five-year high of 1.43, while orders for the third quarter increased further.
ASMPT reported second-quarter revenue of $630 million, above the top end of its guidance range and up 52.1% from a year earlier. Adjusted net profit surged 253.9% year-on-year to HKD637.5 million, with adjusted earnings per share of HKD1.53. The company guided for third-quarter revenue of $630 million to $690 million, above market consensus, implying 46.3% year-on-year growth at the midpoint.
The stock has fallen about 35% from its 52-week high of HKD244.40 amid a broader selloff in semiconductor names, trading recently at around HKD139.50. Citi's HKD250 target implies roughly 79% upside from current levels. Despite market concerns over the sustainability of artificial intelligence and memory demand, the broker believes multiple AI-driven advanced packaging opportunities remain intact, with thermocompression bonding and photonics technologies set to become key growth drivers.
ASMPT's first-half bookings reached $1.63 billion, up 85.1% year-on-year, driven by demand from AI servers, advanced packaging and photonics. The company's computer end market became the largest revenue contributor at about 33% of group sales, up from roughly 10% in 2024. China remained the largest geographic market at 42% of revenue, supported by wire bonding and die bonding tools as well as AI-related spending.
Citi also flagged that announcements of new memory production capacity expansion and a potential spin-off of the SMT business could serve as positive catalysts for the stock. The SMT segment posted record bookings in the first half, largely driven by demand from AI servers for ASMPT's iFlex and i4 solutions.
The reiteration comes as ASMPT prepares for a leadership transition, with Group Chief Executive Robin Ng stepping down on Aug. 11 and Bassel Haddad taking over. Ng said the company would sharpen its focus on the back-end packaging business, which has experienced rapid growth over the last few years.
For holders, the Citi upgrade reinforces the view that ASMPT's valuation has become attractive after the recent correction. Investors will watch the company's third-quarter earnings in October for further signs of AI-driven demand acceleration and any updates on the potential SMT spin-off.
This article is for informational purposes only and does not constitute investment advice.
