Damo: Lowering ASMPT (00522) Target Price to HK$215 to Maintain “Overweight” Rating

The Zhitong Finance App learned that Morgan Stanley released a research report stating that the ASMPT (00522) target price was lowered from HK$248 to HK$215, maintaining the “gain” rating. The bank remains optimistic about the company's long-term growth prospects. It believes that emerging opportunities such as EMIT-T, CoPOS, and photonics will provide growth impetus, but the industry headwinds may limit short-term upward space. The bank sees the company's current price valuation as attractive.

The bank pointed out that management expects orders for the fourth quarter of 2026 to remain high, supported by continued investment in artificial intelligence infrastructure, but orders will fall below the record level in the third quarter due to one-time factors in the SMT business and early delivery. The bank maintains a positive outlook for ASMPT revenue growth from 2027 to 2028. It is expected to grow 20% in 2027 and 12% in 2028, mainly driven by strong demand for artificial intelligence and high utilization of OSAT production capacity.

Despite the reduction in HBM specifications, the bank believes that EMIT-T, CoPOS, and photonics are still emerging growth drivers. Photonics applications include pluggable optics, NPO and CPO, and demand momentum is still strong; eMIT-T and CoPOS are expected to unlock incremental opportunities in advanced packaging. The bank also pointed out that semiconductor industry growth is expected to slow from 132% in 2026 to 35% in 2027. As a leading indicator, equipment stocks will also take the lead in putting pressure on when the industry cycle slows down.

Based on the 2026 third quarter results and fourth quarter guidelines, Damo raised the 2026-2027 earnings per share forecast by 2% and 5%, respectively, due to stronger performance of semiconductor solutions and SMT orders. The target price reduction mainly reflects a reduction in the medium-term growth rate forecast to take into account the delay in HBM's production capacity investment. The current price of ASMPT is equivalent to the 2027 forecast earnings per share of about 16 times, far lower than the average of the past 10 years, and the bank believes that the valuation is attractive.