UBS: ASMPT (00522) Q3 orders far exceed expectations; reiterates "Buy" with target price of HK$200

UBS issued a research report stating that ASMPT (00522) delivered strong third-quarter orders of US$1.1 billion, up 25% quarter-on-quarter and 138% year-on-year, exceeding prior guidance of high-single-digit quarter-on-quarter growth, with both SEMI and SMT businesses recording record orders; the bank reiterates its "Buy" rating and maintains a target price of HK$200. The bank noted that the record-high orders were driven by strong AI demand for thermal compression bonding (TCB), surface mount technology (SMT), and photonics equipment, plus a one-off bulk SMT order. The third-quarter book-to-bill ratio reached 1.69, the strongest level since the first quarter of 2021. Third-quarter gross margin was 42.1%, better than market concerns, benefiting from improved scale and a better SMT and SEMI product mix. The company guides fourth-quarter sales to grow 4.6% quarter-on-quarter at the midpoint, in line with the bank's expectations, driven by double-digit SMT growth, while SEMI is expected to be flat due to longer delivery lead times for advanced packaging products; fourth-quarter orders are expected to be slightly lower than the third quarter as some orders were recognized early. The bank expects logic chips to become a more important driver of the TCB addressable market in 2027-2028, and photonics sales growth is expected to accelerate further in the second half and continue into 2027. The bank raised its 2027 earnings per share forecast by 4% to HK$7.71.