Goldman Sachs: Rated ASMPT (00522) as "buy" with a target price of 100 Hong Kong dollars.

date
26/02/2025
avatar
GMT Eight
Goldman Sachs released a research report stating that ASMPT (00522) has been given a "buy" rating with a target price of 100 Hong Kong dollars. ASMPT's fourth-quarter revenue in 2024 increased by 2% compared to the previous quarter, which is in line with the bank's forecast. However, the gross margin was 37.2%, lower than the bank's and market's expectations of 41.3% and 40.8% respectively. The report mentioned that the company's revenue guidance for the first quarter of 2025 is a quarterly decline of 15% to 1%, weaker than the bank's and market's forecasts of a 4% decline and 2% growth. Management attributed the weak outlook for the first quarter of 2025 to sluggish demand in mainstream semiconductors and SMT tools, especially from the automotive and industrial markets. However, they expect the advanced packaging business to continue growing. The order to ship ratio for the fourth quarter was 0.96, slightly higher than the third quarter's 0.95, primarily due to a decrease in orders in the SMT sector. ASMPT's revenue guidance for the first quarter of 2025 is between 370 million and 430 million US dollars (approximately 2.9 billion to 3.4 billion Hong Kong dollars), implying a year-on-year change of between an 8% decline and a 7% increase. The midpoint of 400 million US dollars (approximately 3.1 billion Hong Kong dollars) is lower than the bank's and market's forecast of 3.4 billion Hong Kong dollars. Management stated that there is strong demand for advanced packaging, including thermal compression bonding (TCB), but the slow recovery in demand from automotive and industrial terminals is limiting sales of ASMPT's mainstream tools. The company continues to see long-term opportunities in the automotive, industrial, green infrastructure, and advanced packaging markets, all of which are being driven by demands for generative AI, high-performance computing (HPC), and high-bandwidth memory (HBM).

Contact: contact@gmteight.com