＜Research＞HSBC Global Research Cuts ASMPT (00522.HK) TP to $99; Recovery Level of Mainstream Semiconductors Still Not Clear

　　HSBC Global Research wrote in a report that ASMPT (00522.HK) -5.650 (-6.420%) Short selling $218.03M; Ratio 18.607% 's 2Q24 sales were in line with market and broker forecasts, but gross margins were 40% below market and broker expectations, and EPS was also below forecasts. According to the broker, the weaker gross margin in 2Q and the market's forecast of limited upside for advanced packaging led to a sharp crash of about 20% in the stock yesterday (24 July).

　　Taking into account the weak SMT (surface mount technology) orders, HSBC chopped its 2024/25 EPS forecasts on ASMPT by 56% and 6% respectively, but raised its 2026 EPS forecast by 3%. The broker believed that SMT orders were close to bottoming out, but the extent of recovery remained uncertain given the limited room for short-term upturn in the thermal compression bonding (TCB) business.

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　　HSBC trimmed its target price from $106 to $99 and maintained its Hold rating.

　　According to the broker, the extent of the recovery in mainstream semiconductors is still unknown. Orders for SMT solutions are close to the bottom but still awaiting a more pronounced demand catalyst. There is an upside risk to the adoption of TCB in edge AI applications given the high volume of PC and smartphone sales, but given the uncertainty of the magnitude of consumer demand recovery, it is believed that the upside is still too early to quantify in 2025.

　　(HK stocks quote is delayed for at least 15 mins.Short Selling Data as at 2024-07-24 16:25.)

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