Asmpt Ltd

Hi, good morning. Ladies and gentlemen, this is Ben Po, the head of investor relations at ASMPT. And today I'll be moderating the call for the first time. On behalf of ASMPT Limited, welcome to our third quarter 2025 investor conference call. Thank you all for your interest and continued support. Please note that all participants will be in listen-only mode during the presentation by the management. We will start the Q&A session after the presentation. During the Q&A session, priority will be given to the covering analysts. Before we start, let me go through disclaimer. Please note that there may be forward-looking statements about the company's business and finances during this call. Such forward-looking statements could involve known and unknown uncertainties and risks that could cause actual results performance, and events to differ materially from those expressed or implied during this conference call. On the call, unless stated otherwise, all references to gross profit or margin, operating profit, segment profit, and net profit are on adjusted basis as described in our MD&A. For your reference, the investor relations presentation on our recent results is available on our website. On today's call, we have the Group Chief Executive Officer, Mr Robin Ng, and the Group Chief Financial Officer, Ms Katie Hsu. Robin will cover the Group's key highlights for the third quarter, guidance and outlook for the next quarter. Katie will provide details on the financial performance for the third quarter. Now, I will hand it over to our Group Chief Executive Officer, Robin. Thank you, Benjamin.

Good morning and good evening to everyone today. It is a pleasure to have you all on our earnings conference call for the third quarter of 2025. Now, let's start with the key highlights of the third quarter. This quarter, we continue to experience strong momentum driven by AI. The group's advanced packaging and mainstream businesses continue to benefit from sustained AI adoption. The group's strong advanced packaging momentum has been driven by thermal compression bondings, or TCP. We remain dominant in advanced logic, have made rapid inroads into high bandwidth memory, or HPM, and more recently have first mover advantage in HBM4. At the same time, AI infrastructure comprising data centers, data transmission, and power management contributed to demand in mainstream business. In China, Demand was also driven by EV and high factory utilization across all sets. Now, let me talk about our technology leadership in TCB. We have further solidified our leadership in HBM. The group's HBM-TCB solution have achieved better years versus the competition. And as I said above, we are leading in the transition to HBM4. In addition, our proprietary fluxless active oxide removal technology provides superior scalability for hbm 16 high and above with the lowest cost of transition in logic the loops ultra fine pitch tcb for chip to wafer with plasma aor solution has successfully passed final qualifications for quality and reliability at the leading boundary and it's ready for high volume manufacturing notably Plasma-based technology has been endorsed by this leading foundry, underscoring its technological advantage over other processors. Turning to TCB orders, encouragingly, the group achieved recurring orders from both memory and logic customers in the third quarter, in memory of TCB solutions for HBM-412 hype became the first to secure orders from multiple HBM players. We expect to remain as a primary supplier, demonstrating our technology leadership in the rapid transition to HBM4. In logic, the group continues to win orders as a processor record for chip-to-substrate applications of key customers. As the market transitions to a larger compound dice, we are well positioned to secure sizeable orders in Q4 2025 and beyond from the OSEC partners of a leading foundry. As a business, we remain confident in the outlook for TCV demand. As to the other updates in hybrid bonding, the group continues to ship hybrid bonding tools in Q3 2025. Our second-generation hybrid bonding solutions are competitive in alignment, precision, bonding accuracy, footprint efficiency, and units per hour. In photonics, we continue to dominate the optical transceiver market, reinforcing our leadership as a key supplier of 800G transceivers, while also actively engaging industry players on next generation 1.6T photonics solutions. Moving to SMT, bookings were better than expected in the third quarter. demonstrating signs of recovery in the business. SMT's AP solutions achieved strong bookings year-on-year growth in the third quarter and won sizable system-in-package orders from IDMs and OSACs for RF modules for base station to support AI growth. SMT also continued to win orders for the next-generation SHIB assembly tool in advanced logic smartphone applications from a leading foundry and OSAC players. In our mainstream SMT business, the demand came mainly from EVs, where we remain the leading player in China. Before I conclude this section, I want to highlight that we have delivered a profitable quarter, excluding the strategic restructuring costs from the voluntary liquidation of the Shenzhen AEC Plan as announced in August. The decision was made to optimize the Group's global supply chain to better align it with the evolving market dynamics and customer needs. As said in the announcement, this move is expected to improve the core competitiveness, agility and resilience of the Group's global manufacturing operations for its key products and solutions. With those highlights, let me now pass over the time to Katie, who will talk about our group and segment performance.

Thank you, Robin. Good morning and good evening, everyone. Let me take you through the group financials. This slide covers the group's key financial metrics for the third quarter of 2025. The group delivered revenue of $468.0 million, representing an increase of 7.6% quarter-on-quarter and 9.5% year-on-year. largely driven by growth in SMT. In the third quarter, the group recorded bookings of $462.5 million driven by AI momentum. We recorded recurring TCP orders in memory and logic. And SMT bookings were also better than expected. This marks the sixth consecutive quarter that we have achieved year-on-year growth. The group had an isolated bookings cancellation in the third quarter for its panel deposition tools from a leading high-density substrate manufacturer in response to a slower-than-expected digestion of existing capacity. This is a one-off occurrence. And excluding this cancellation, the group's bookings in the third quarter would have been $486.6 million 1.5% higher quarter-on-quarter and 20.1% higher year-on-year. The group achieved a book-to-bill ratio of 1.04 for the quarter, maintaining a ratio above 1 since Q1 2025. SMT posted a robust ratio of 1.12 while CEMI's ratio was at 0.96. The group closed the quarter with a backlog of $867.7 million U.S. dollars. Adjusted growth margin for third quarter was 37.7%, which is lower than our typical level. It was impacted by a larger contribution from SMT and the lower semi-growth margin, which I will explain in the next slide. I would like to note that the group's year-to-date adjusted growth margin remained healthy at approximately 40%. The group's operating expenses were up 6.2% QMQ and 5.3% year-on-year. As expected, high OPEX was largely due to strategic R&D and infrastructure investments and foreign exchange impact. They were partially offset by prudent spending control and some benefits from restructuring. The group's adjusted operating profit was HK$124.4 million, down 26.6% quarter-on-quarter and 30.3% year-on-year, due to lower gross margin and higher operating expenses. adjusted net profit was 101.9 million Hong Kong dollars, down 24.4% quote-on-quote, but up 245.2% year-on-year. The quote-on-quote adjusted net profit, which included fee collected from the order cancellation mentioned above, was offset by the absence of tax credits recorded in the previous quarter. The year-on-year increase in adjusted net profit was driven by the fee collected from the order cancellation and the lesser negative impact from foreign exchange. The adjusted earnings per share was HK$0.24. Now moving on to the Semi-Conductor Solutions segment for the third quarter of 2025. Semi's revenue was US$240.5 million, down 6.5% quarter-on-quarter, but up 5.0% year-on-year. The year-on-year revenue increase was driven by stronger demand for wide-benders and dive-benders due to the increased needs for power management across multiple applications. Quarter-on-quarter revenue decline was due to the timing of key customers' AI technology roadmaps, which impacted AP demand this quarter. There was also some shipment disruption caused by a typhoon in September in China. Semi's bookings of $207.8 million were down by 1.7% quarter-on-quarter and 12.4% year-on-year. Excluding the booking cancellation explained above, Semi's Q3 2025 bookings would have been $231.9 million, 9.6% higher quote-on-quarter and a slightly lower year-on-year. Semi recorded quote-on-quarter and year-on-year growth in Y-bonders and Y-bonders. TCB orders were up quote-on-quarter but remained at a lower level due to the impact of IEP demand as mentioned above. As I said earlier, Semi's adjusted gross margin was lower than normal at 41.3% for Q3 2025. Q-on-Q decline was due to a higher contribution from Y-bonders, lower TCB revenue, and a relatively lower manufacturing utilization in Q3 2025. Year-on-year decline was due to high base effect from TCB manufacturing ramp in Q3 2024, and a high contribution from Y-bonders this quarter. Encouragingly, year-to-date semi-adjusted gross margin has stayed in the mid-40s, and AP margins have remained stable. Semi-adjusted segment profit was 82.6 million Hong Kong dollars in Q3 2025, down 52.8% quarter-on-quarter and 41.5% year-on-year, mainly due to lower gross margin and higher operating expenses as mentioned in the previous slide. Next, the SMT solution segment of our business. SMT delivered strong revenue of 227.5 million US dollars, up 28%. quote-on-quote, and 14.6% year-on-year. This was due to a robust performance in Asian markets, driven by AI servers, EVs in China, and the delivery of a smartphone bulk order booked in the previous quarter. However, contributions from automotive outside China and industrial remained soft. SMT registered Q3 2025 bookings of $254.7 million, down 5% quote-on-quote, but up 51.8% year-on-year. Marginally lower quote-unquote bookings were due to a high base effect from the Q2 smartphone bulk order, while the year-on-year increase was driven by strong momentum across both AP and China mainstream markets. AP bookings were supported by demand from IDMs and OSETs for telecom-based stations and AI servers. China's mainstream business recorded strong year-on-year growth due to demand from EVs. SMT delivered a gross margin of 33.9% this quarter, up 136 basis points quarter on quarter and 163 basis points year on year. And the segment profit was 163.0 million Hong Kong dollars, up 205% quarter on quarter and 65.6% year on year. Both were driven by higher volume effects. With that, let me now pass the time back to Robin for Q4 revenue guidance.