Morgan Stanley: ASMPT (00522) first quarter orders hit four-year high, second quarter outlook optimistic, rating "hold"

Morgan Stanley released a research report, stating that ASM Pacific Technology (00522) announced its first quarter performance with orders reaching $727 million, a quarterly increase of 46% and a year-on-year increase of 72%, reaching a four-year high and surpassing the bank's expectations. The book-to-bill ratio for the first quarter was 1.43, benefiting from strong demand for AI servers, optical transceivers, and Chinese electric vehicles, with the SMT division achieving record orders. The orders growth of the SEMI division was driven by Chinese outsourced semiconductor assembly and testing (OSAT), high-end smartphone applications, AI-related power management applications, and optical transceiver demand. The rating was maintained as "hold" with a target price of HK$148. The bank stated that ASMPT's first quarter revenue was HK$4.1 billion, a 30% year-on-year increase, exceeding the bank's expectations by 4%; net profit was HK$254 million, a significant increase of 207% year-on-year, exceeding the bank's expectations by 10%. The company expects second-quarter revenue to be between $540 million and $600 million, with a median quarterly growth of 12.2%, a year-on-year increase of 37%, exceeding the bank's and market expectations by 5% and 7%, respectively, driven mainly by the SEMI division. Morgan Stanley pointed out that ASMPT continues to maintain its leadership in the thermal compression bonding (TCB) field, with significant shipments and repeat orders of chips to substrate (C2S) recorded in the first quarter, as well as four orders for chip to wafer (C2W) tools. In terms of memory, a major customer has already certified its HBM 16H product through AOR fluxless process. The bank expects OSAT capital expenditures to increase by 34% by 2026, with both the SEMI and SMT divisions expected to achieve strong performances.