Asmpt Limited Unsp/Adr

All right, since time is 8.31, good morning and good evening, ladies and gentlemen. This is Romil here from the Investor Relations team, and I will be the moderator for today's call. On behalf of ASMPT Limited, let me welcome all of you to the group's investor conference call for the first quarter of 2024. And we would like to thank you for your interest and your continued support in the company. Please note that all participants will be on listen-only mode when the management is presenting. We will start the Q&A only after the management has gone through the entire presentation. During the Q&A session, priority will be given to the covering analysts. As part of our standard disclaimer, please do note that during this conference call, there may be forward-looking statements with respect to the company's business and financial conditions. 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. For your reference, the investor relations presentation for our recent results is available on our website. On today's call, we have the Group Chief Executive Officer, Robin, and the Group Chief Financial Officer, Katie. Robin will cover the group's key highlights, outlook, and the guidance for second quarter, while Katie will provide details on the financial performance. And then we will open the floor for Q&A. So with that, let me hand the time over to Robin now.

Thank you, Ram. Good morning and good evening to everyone today. It is a pleasure to have you all on our earnings conference call for the first quarter of 2024. Before we begin, let me take this opportunity to share some thoughts on the overall macro environment and some key highlights of our business. The macroeconomic environment continues to present challenges. While the slow recovery of the Chinese economy continues, there have been dynamic and often rapidly evolving geopolitical conflicts that have roared markets. Coupled with stubborn inflationary pressure and the more recent fear of interest rate hikes, overall consumer sentiment remained weak, trickling down and causing tepid electronic demand. Against this backdrop, our unique and broad-based portfolio shielded us to a certain extent as our two segments followed different cycles. For the first quarter, ASMPT delivered revenue at the midpoint of guidance with a higher revenue proportion from our SMT business. Our block-based portfolio serves diverse end markets, and this continued to be an advantage for us because weakness in some end markets can at times be compensated by strength in others. For this quarter, the group's automotive applications continued to form the highest proportion of our overall group revenue. Revenue from SMT's automotive application also grew compared with the previous quarter, despite softness in the overall automotive market. As for SEMI, its automotive solution benefited owing to exposure to certain specialized technology areas of the supply chain, such as power and silicon carbide modules and smart headlamps for high-end vehicles. An important development for the group in the first quarter was the book-to-bill ratio that moved above one after seven quarters. Bookings for the group grew in the first quarter as both business segments had higher bookings when compared to the previous quarter. Semi's booking growth was also due to a low base effect. SMT bookings grew quarter and quarter and began stabilizing after softening in the second half of 2023, mainly due to automotive and industrial air markets. The group bookings growth in the first quarter was mostly propelled by strong demand for its advanced packaging or AP solutions, with both SEMI and SMT contributing strongly to group AP's bookings. the group's interconnect solutions, including thermal compression bonding, hybrid bonding, and flip-chip high-precision dye bonding were mainly driven by AI. Together with SMT's system-in-package or SIP tools, this contributed strongly to the group's AP bookings in the first quarter. Let me share more about the progress of our AP solutions, which have the highest growth potential. under our portfolio. Undoubtedly, advanced packaging continues to be a bright spot for the group. We strongly believe that the group has industry's most comprehensive suite of AP solutions that serve a diverse range of applications. Moreover, we are deeply embedded in the supply chain of major generative AI and high performance computing customers, and hence, are in a commanding position to capitalize on the growing demand from an increasing range of such applications. Let me shift focus to our most popular AP solution, thermal compression bonding, or TCP. For logic applications, we continue to win TCP orders in the first quarter from IDM and OSAP customers. For a leading Foundry customer, we have started to deliver TCB tools in the first quarter for chip-to-substrate application as part of the meaningful orders that we won from this customer in the second half of last year. To support this customer's growing AP demand propelled by generative AI, we expect more TCB orders for chip-to-substrate application from this leading foundry and the supply chain partners in the second quarter and beyond. In addition, we also recently delivered our next-generation ultra-fine-pitch TCB tool for chip-to-wafer application to this founding customer for joint development. And we are confident of winning chip-to-wafer TCB orders in the coming quarters. Next, let me talk about high-bandwidth memory or HBM potential. The group's TCB tools already in production at a leading HBM player for 12 high stacking. We have shipped out a demo tool to another HBM customer and have more tools in the pipeline. I'm sure most of you are aware of the news circulating recently since last month on the relaxation of the package thickness on the next generation of HBM. We have experienced heightened engagement with multiple HBM players as TCB is emerging as a preferred solution for stacking requirements of 12 high, 16 high and above. This is due to TCB's continued advantage in terms of cost over performance or total cost of ownership criteria. We remain confident of the strength of a TCB solution in terms of accuracy, thin or large time handling capabilities, and our deep process knowledge gathered over more than a decade. With a competitive advantage and based on the above-mentioned customer engagement, ASMPT is in a strong position to benefit as TCP adoption accelerates for both logic and HPM application. Let me talk a little bit about hybrid bonding. Last quarter, we indicated that we expected more orders. I'm pleased to highlight that in the first quarter, we won orders for two more hybrid bonding tools for logic applications. And we remain confident of winning more hybrid bonding orders in the coming quarters. In addition to our semi AP tools, booking for SMT AP tools also grew quarter and quarter, mainly due to SIP tools demand mostly coming from RF modules for high-end smartphones and wearables, from leading global players, and also from PC and server-related applications. With those highlights, let me now pass the time over to Katie, who will talk about 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 first quarter of 2024. The group delivered revenue at midpoint of guidance. Revenue for Q1 was down quarter on quarter, mainly due to the prolonged semiconductor down cycle that impacted our semi-business. Though SMT revenue also declined, it was a much smaller rate, and SMT contributed a high proportion of group revenue. This highlights the advantage of our broad-based portfolio as semi and SMT segments for the different business cycles and provide some stability at the group level. Group bookings had growth quarter on quarter in Q1 as both segments grew, and the growth was mostly powered by advanced packaging solutions. Our backlog remained stable at about $849 million at the end of Q1. Group gross margin remained at a relatively high level in the first quarter, and it was down slightly quarter on quarter. For Q1, group's adjusted net profit was 177.5 million Hong Kong dollars, an increase of 132.1% quarter on quarter. And adjusted earnings per share was 0.43 Hong Kong dollar, an increase of 138.9% quarter on quarter. The group continued to have a robust balance sheet with cash and bank deposits at 5.25 billion Hong Kong dollars, and net cash at 2.75 billion Hong Kong dollars at the end of Q1. In the first quarter, group revenue was 401.4 million US dollars. Revenue was down 7.8% quarter on quarter due to both SEMI and SMT. But SEMI's revenue decline was steeper due to the prolonged semiconductor down cycle. Group bookings in the first quarter grew 17% quarter-on-quarter to $409.3 million as both segments registered bookings growth. As Robin highlighted earlier, this booking growth was supported by robust demand for advanced packaging solutions on both SEMI and SMT. Group gross margin declined slightly by 40 basis points quarter-on-quarter to 41.9%. This is still at a higher level compared with previous quarters. The slight decline was mainly due to SMT's lower gross margin, but partially offset by semi. Group operating margin improved quarter-on-quarter by 218 basis points to 7.6% in the first quarter. This was mainly due to lower operating expenses from ongoing cost measures and seasonality effects. Last quarter, we announced that we'll invest in R&D and infrastructure with an additional HK$250 million for 2024. The projects are on track and will intensify in the remainder of the year. Semi-delivered revenue of $175.8 million in the first quarter, a decline of 13.7% quarter-on-quarter. The IC discrete business unit had a quote-unquote decline in revenue, mainly due to industry weakness for the group's deposition tools. However, there was some sporadic demand for consumer-related mainstream tools in the quarter. Optoelectronics business unit's revenue declined quarter-on-quarter. The business unit's revenue was mainly driven by high-end automotive headlamps and photonics-related applications. Revenue for CIS business unit grew quarter-on-quarter, a low base. Growth was mainly due to a high-end smartphone market. Semi's bookings grew 25.1% quarter-on-quarter, from a low base to $199 million U.S. dollars. mainly due to consumer and the computers and market applications. Semi's advanced packaging solutions also registered quarter-on-quarter growth. It is worth noting that Semi's booking turned to growth on a year-on-year basis in Q4 last year, and it continued this trend in Q1 2024. Despite lower volume, segment gross margin improved by 86 basis points quarter-on-quarter to 44.6%. mainly due to a one-off benefit from the sale of previously provisioned inventory. For Q1 2024, our SMT segment continued to deliver higher revenue than Semi for a seventh consecutive quarter, and it contributed about 56% of group revenue. SMT registered revenue of $225.5 million, a marginal decline of 2.6% quarter-on-quarter. SMT revenue performance continued to be dominant by automotive and industrial end-market applications, and mostly in Europe. Secondment bookings grew 10.1% quarter-on-quarter to $210.3 million in the first quarter, mainly driven by growth from advanced packaging and automotive applications. SMT gross margin was at a healthy level of 39.7% in the first quarter. there was a decline of 123 basis points quarter on quarter due to product mix. Let me now pass the time back to Robin for next quarter's revenue guidance.