Bank of America Securities: Upgrades ASM Pacific Technology (00522) to "Buy" with target price raised to HK$150

Bank of America Securities released a research report stating that they expect ASMPT (00522) to experience a more significant recovery from the second half of 2026 to the next two years. They are forecasting a P/E ratio of 34 times for 2027, raising the target price from 95 Hong Kong dollars to 150 Hong Kong dollars, and upgrading the rating from "neutral" to "buy." The bank believes that the group's thermal compression bonding (TCB) equipment technology is likely to be adopted by more different types of memory/logic chip manufacturers. The expansion of backend production capacity and technological specification upgrades by semiconductor manufacturers may drive the group to sell more TCB equipment. It is expected that the group's EPS will record strong growth in the next three years (with a compound annual growth rate of over 30%), reaching a mid-to-high point in revenue, with a gross profit margin exceeding 40%, and the revenue being sustainable. Bank of America Securities stated that although they did not assume that the group will occupy over 50% of the market share in the TCB field, they believe that its 20% to 30% market share is sufficient to support the group's strong sales and EPS growth in the second half of this year to the next two years. However, due to capital expenditures of chip manufacturers focusing on frontend capital expenditures, it is expected that the group's sales in the first and second quarters of this year may remain at low levels (around 3.6 billion and 3.8 billion Hong Kong dollars respectively, only at or below the mid-point level of the cycle). But sales are expected to gradually recover from the second half of this year (around 4 billion Hong Kong dollars per quarter) to 2027 (40 to 50 billion Hong Kong dollars).