Citi: Maintains ASMPT (00522) "Buy" Rating and HK$190 Target Price; Retaining SMT Business Expected to Improve Profit Outlook

Citi issued a research report maintaining a "Buy" rating on ASMPT (00522) with a target price of HK$190. The company announced its decision to retain the SMT business, primarily because AI-driven demand has significantly improved the division's financial condition. Citi expects short-term share price pressure, as some investors had anticipated a valuation re-rating as a pure semiconductor equipment stock following a spin-off of the SMT business, but better-than-expected SMT business forecasts are expected to improve the company's overall earnings outlook. Management expects the global SMT total addressable market to grow at a compound annual growth rate of over 20% from 2024 to 2027. The company's SMT order market share has risen from 24% in 2025 to 31% currently, with related order value increasing from US$700 million to US$1.4 billion. AI applications and AP currently account for 50% and 25% of SMT orders, respectively. Management expects SMT business revenue to reach approximately US$1.6 billion by 2027, with a gross margin of 40% and a segment margin of 20%. Citi estimates this implies SMT business net profit of approximately US$230 million (HK$1.8 billion). Based on the updated SMT earnings, the transaction valuation previously reported by Reuters implies a 2027 P/E of only 4 to 5 times, which Citi believes undervalues the SMT business. The bank noted that management is confident in the improved business outlook, mainly due to backlog support that may persist beyond the cyclical recovery phase.