Bank of China International: maintains a "buy" rating on ASMPT (00522) and lowers target price to HK$98.

Bank of China International released a research report stating that it maintains a "buy" rating on ASMPT (00522), with the target price lowered from 107 Hong Kong dollars to 98 Hong Kong dollars. The company's profit forecast for this year and next year have been revised down by 28% and 16% respectively, but it believes that the short-term performance will not hinder the positive progress of the advanced packaging business. Bank of China International pointed out that ASMPT's fourth quarter revenue in 2024 reached the upper end of the guidance range, benefiting from strong growth in AI applications. However, the profit margins of SEMI and SMT businesses were weak, resulting in a net profit of only 4 million Hong Kong dollars, and an adjusted net profit of only 76 million Hong Kong dollars, both below expectations. The bank stated that it remains optimistic about the structural demand for thermal compression bonding (TCB) and other advanced packaging equipment. In addition, ASMPT has made steady progress in product certification and order acquisition in the fourth quarter of last year and the first quarter of this year. The bank also pointed out that general semiconductor equipment and non-AI related applications are currently dragging down performance, but it is expected that starting from 2025, ASMPT's revenue from advanced packaging business will account for over 30%, with net profit contribution exceeding 50%. Therefore, it believes that the current stock price is undervalued.