ASMPT Ltd - 2Q26 guidance ahead as AI demand broadens across SEMI, photonics/CPO and SMT
- 1Q26 revenue +32.0% y/y, c.2% above consensus; bookings surged 71.6% y/y, with book-to-bill at 1.43×
- Adj. net profit rose 193% y/y, 28% ahead of consensus, as high margin SEMI business contribution increased
- 2Q26 revenue guidance implied +37.0% y/y, +6.5% vs. consensus; We raise FY26/27F earnings by 5%/8% to reflect stronger SEMI margin recovery and photonics momentum
- Maintain BUY; TP raised to HKD185 (45× FY26F P/E, pegged to global peer’s avg.) SMT strategic options and continued CPO progress remain as key re-rating catalysts
1Q26 results highlights
For 1Q26, ASMPT reported revenue of HKD3.97bn (USD508m), up 32.0% y/y and broadly flat q/q, exceeding market consensus by c.2.0%. Bookings were particularly strong at HKD5.67bn (USD727m), up 46.0% q/q and 71.6% y/y, marking the highest level in four years, with a book-to-bill ratio of 1.43×. This was mainly attributable to broad-based AI-driven demand across multiple product lines, including SMT products, wire bonders, die bonders and photonics.
Adjusted gross margin (excluding the impact of share-based payments and restructuring costs) improved to 39.5%, up 3.57ppts q/q, mainly due to the higher gross margin and higher revenue contribution from SEMI. Adjusted net profit increased 193.5% y/y to HKD335.2m (27.6% ahead of consensus), equivalent to adjusted EPS of HKD0.81, up 189.3% y/y. The earnings beat was mainly driven by higher SEMI mix, SEMI margin recovery, and operating leverage, rather than just top-line upside.
SEMI revenue reached HKD2.14bn (USD274m), up 12.2% q/q and 14.6% y/y, accounting for c. 54% of group revenue (vs. 50% in FY25). Sequential growth was driven by high-end die bonders and TCB, while y/y growth was supported by multiple AI-related applications. SEMI bookings rose 22.6% q/q and 43.2% y/y to HKD2.41bn (USD310m), driven by China OSAT demand, high-end smartphone-related applications, AI-related power management applications and optical transceivers. SEMI book-to-bill reached 1.13×, marking three consecutive quarters of improvement. SEMI adjusted GM reached 46.4%, up 5.94ppts q/q, meeting management’s prior guidance for a mid-40s margin recovery, while segment profit rose 165.9% q/q to HKD309m.
SMT revenue was HKD1.82bn (USD233m), down 11.0% q/q on seasonality but up 60.7% y/y, driven by strong demand from AI servers and China EVs. More importantly, SMT bookings reached a record high of HKD3.26bn (USD417m), up 70.0% q/q and 101.1% y/y, supported by AI servers, optical transceivers and China EV demand. SMT adjusted GM was broadly stable at 31.3%, down 0.32ppts q/q, while segment profit declined 28.3% q/q due to lower seasonal volume but turned profitable from a loss of HKD5.3m in 1Q25.
For 2Q26, management guided revenue at USD540m–600m, implying +12.2% q/q and +37.0% y/y at the midpoint of USD570m, 6.5% above market consensus. Growth is expected to be mainly driven by SEMI. Management also expects bookings to remain elevated across both segments, although SMT bookings may decline q/q due to the unusually high 1Q base.
Our view
The 1Q26 results reinforce our view that ASMPT is no longer only a narrow TCB/HBM story, but a broader AI back-end manufacturing beneficiary. Management described AI demand as increasingly broad-based across TCB, advanced packaging, photonics, CPO, mainstream wire/die bonding, and SMT pick-and-place solutions. We expect this to reduce reliance on any single customer roadmap and support more durable earnings visibility than the historically lumpy advanced packaging cycle.
On SEMI/TCB, the key positive was the combination of margin recovery and technology traction. In memory, news reports indicate that SK hynix is using ASMPT’s flux-based TCB2 tool for HBM-related assembly and is qualifying the fluxless AOR process for HBM4 16-high. Management reiterated that its USD1.6bn TCB TAM by 2028 remains intact and that it continues to target 35–40% market share.
Photonics and CPO are becoming more important optionality. Photonics revenue surged 5× y/y, driven by demand for 800G and above optical transceivers, as well as bulk orders for 1.6T transceiver solutions from leading optics suppliers. CPO also provides ample bonding opportunities for ASMPT, including fiber-array unit attach on PIC, EIC/PIC stacking, microlens attach on PIC, and optical-engine attach on substrate. While CPO equipment demand is likely to become more meaningful from 2028 onward, ASMPT is well prepared, with solutions already designed in with several key players, supporting the longer-term AI optical interconnect story.
SMT is increasingly benefiting from AI infrastructure. The record SMT bookings in 1Q were driven by AI server assembly, optical transceivers and China EVs. Its high-flex/high-force SMT solutions for large-format boards have emerged as a leading choice for AI server assembly.
The SMT strategic review remains an important re-rating catalyst. Management confirmed that the review is still under evaluation and that there has been interest in the SMT business. We believe clearer progress on a partial spin-off, divestiture, JV or listing of the more conventional SMT business would help investors value ASMPT more directly on its semiconductor equipment and advanced packaging franchise, further narrowing the valuation gap with global SEMI peers that trade at over 40× forward P/E.
We raise FY26F/FY27F earnings forecasts by 5.4%/7.5%, reflecting: (i) stronger-than-expected SEMI gross margin recovery; (ii) stronger revenue visibility from 2Q26 guidance; (iii) faster-than-expected photonics/optical transceiver momentum; and (iv) a higher SMT baseline driven by AI servers and China EVs.
Valuation
We maintain BUY and raise TP to HKD185 (from HKD130), based on a higher multiple of 45× FY26F P/E (previously 35×) and our higher FY26F EPS.
We lift the target multiple to peg with global peers (avg 45x forward PE), as 1Q26 demonstrates that ASMPT’s AI exposure is broadening from TCB into photonics/CPO and mainstream SEMI solutions, while SEMI margins are now showing meaningful operating leverage. We believe further progress on SMT strategic options, sustained semiconductor bookings and continued photonics/CPO progress would be the key catalysts for a further re-rating toward global SEMI equipment peer multiples.
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