Hold Rating for ASM Pacific Technology Amid Mixed Performance and Market Challenges

DBS analyst Jim Hin Kwong Au has maintained their neutral stance on ASMVF stock, giving a Hold rating on April 30.

Jim Hin Kwong Au has given his Hold rating due to a combination of factors affecting ASM Pacific Technology’s performance. The company’s recent earnings report showed a 7% year-over-year increase in adjusted earnings for the fourth quarter of 2024, yet it fell short of market expectations due to lower gross margins. Additionally, the revenue guidance for the first quarter of 2025 was below expectations, reflecting cautious demand trends in non-smartphone consumer electronics in the short term.
Despite the company’s strong position in the AI-driven thermo-compression bonding (TCB) market, which is expected to grow significantly, this strength is counterbalanced by ongoing weaknesses in the non-smartphone consumer electronics sector. The company’s sluggish cash flow trajectory and earnings outlook have led to a target price of HKD 70.0, with a target price-to-book ratio set at 1.8 times, which is below its historical average. These factors combined justify the Hold rating, as the potential growth in advanced packaging is tempered by broader market challenges.

In another report released on April 30, J.P. Morgan also downgraded the stock to a Hold with a HK$58.00 price target.