ASMPT Benefits from OSAT and PCB Twin Capex Cycles, Target Price Raised to HK$248

Overview

This is a 2Q26 update for ASMPT Ltd (0522.HK). The core conclusion is that robust 2026 capital expenditure plans at OSAT and PCB companies will jointly drive growth in ASMPT’s semiconductor solutions and SMT businesses. The report maintains an Overweight rating and raises the 52-week target price from HK$188 to HK$248.

Core views

The report argues that ASMPT’s near- and mid-term growth comes from two main drivers: first, OSAT capex rising with high utilization and pricing strength supports demand for advanced packaging equipment; second, AI-driven PCB-company expansion is positively correlated with ASMPT’s SMT revenue growth. On TCB, demand from logic chips and CoWoS-L remains strong, while HBM-related equipment order momentum has weakened. Over the long term, CoWoS, HBM, silicon photonics, CPO and hybrid bonding remain potential growth drivers.

Analysis framework

The report combines bottom-up OSAT and PCB capex analysis, order and utilization-cycle indicators, segment revenue forecasting, peer valuation comparisons, and a residual income model to assess ASMPT’s earnings outlook, valuation, and risk-return profile.

Methodology notes

• Financial ForecastMorgan Stanley ModelWare

  ModelWare Estimation Framework

  The report states that, unless otherwise noted, financial metrics are based on the Morgan Stanley ModelWare framework.

• Valuation methodsResidual income model

  Residual Income Model

  The HK$248 target price is derived from a residual income model, with key assumptions including a 9.2% cost of equity, a 14.5% medium-term growth rate, and a 3.5% terminal growth rate.

• Industry CycleBottom-up capex analysis

  Bottom-up capital expenditure analysis

  The report assesses demand sensitivity for ASMPT’s semiconductor solutions and SMT business using OSAT and PCB capex plans.

• Risk/RewardBull/Base/Bear case

  Scenario analysis

  The report presents bull/base/bear cases using different assumptions for revenue growth, technology breakthroughs, and valuation multiples to depict the risk-return range.

Asset mapping & comparison

Structured mapping from thesis to named assets (strengths, weaknesses, peers, risks).

• ASMPT有限公司 (0522.HK)

  Core coverage name

  Strengths

  Benefits from rising OSAT and PCB capex, AI demand, CoWoS-L TCB supply positioning, correlation between SMT business and PCB expansion, and potential opportunities in silicon photonics and CPO.

  Weaknesses

  Momentum in HBM-related TCB orders is slower, and demand from traditional automotive and industrial customers still needs to be monitored; parts of the business may be affected by semiconductor cycle volatility.

  Comparison

  The report believes ASMPT’s 2027e P/E of around 30x is below Besi at around 35x and Hanmi at around 43x, indicating relatively attractive valuation.

  Risks

  Semiconductor cycle below expectations, slowdown in OSAT expansion, no progress in hybrid bonding, and weakening backend equipment demand.

• OSAT value chain

  Demand driver

  Strengths

  2026 capex is expected to grow by 45%, with high utilization and pricing trends supporting equipment demand.

  Weaknesses

  Demand is highly dependent on assembly and test capacity expansion and the persistence of advanced packaging orders.

  Comparison

  The report says OSAT capex expectations are above the 34% level in the prior 1Q26 preview.

  Risks

  Demand weakness at China OSAT peers and a halt to expansion.

• PCB value chain

  SMT business driver

  Strengths

  2026 capex is expected to grow by about 69%, supported by AI server-related demand.

  Weaknesses

  SMT equipment demand may weaken if AI-related expansion slows.

  Comparison

  Historically, ASMPT’s SMT revenue growth has been highly correlated with PCB company capex.

  Risks

  PCB expansion pace below expectations, or continued weakness in automotive and industrial end-demand.

Key data

• Target priceHK$248.00Raised by 32% from the prior HK$188.
• Current share priceHK$204.80Close on 3 July 2026.
• Implied upside21%Based on target price versus current share price.
• RatingOverweightMorgan Stanley maintains its rating.
• 2026 OSAT capex growth45%Up from the 34% expectation in the 1Q26 preview.
• 2026 PCB capex growtharound 69%Mainly driven by stronger AI demand.
• 2026/2027/2028 EPS revisions7%/10%/10%Reflects stronger growth in semiconductor solutions and SMT business.
• 2026 revenue forecastHK$18,293mnMorgan Stanley estimate.
• 2027 revenue forecastHK$21,822mnMorgan Stanley estimate.
• 2028 revenue forecastHK$25,482mnMorgan Stanley estimate.
• 2027e P/E30.3xThe report views this as below Besi at around 35x and Hanmi at around 43x, making valuation relatively attractive.

Impact & implications

If OSAT and PCB expansion proceed as expected, ASMPT orders, revenue, and margins may continue to improve, and the market may reassess its exposure to AI-related advanced packaging and SMT equipment. However, if global semiconductor growth slows, if China OSAT expansion weakens, or if hybrid bonding progress falls short, valuation re-rating and earnings upward revisions may be limited.

Risks

• Global economy and semiconductor growth are slower than expected.
• China OSAT peers weaken demand and stop expanding capacity.
• Hybrid bonding tools do not achieve technology breakthroughs.
• Weakening backend equipment demand puts pressure on semiconductor and SMT businesses.
• HBM-related TCB order momentum is slower than logic-chip-related orders.
• Morgan Stanley has investment banking coverage of ASMPT; investors should be aware of potential conflict-of-interest disclosure.

What to watch

• Whether 2Q26 results and 3Q26 revenue guidance validate the revenue growth momentum.
• Whether the order fulfillment ratio and order value continue to improve.
• How TCB order wins in HBM and logic-chip areas evolve, especially C2W-related orders.
• Visibility of tool orders related to photonics and CPO.
• Progress on the new CEO appointment, SMT business strategic options, and potential business divestiture.
• Progress of hybrid bonding technology.
• Demand trend for SMT equipment from automotive and industrial customers.