Asmpt Limited Unsp/Adr

Good morning, ladies and gentlemen. I'm Ben Po, Head of Investor Relations, and today I will be moderating the call. On behalf of ASMPT Limited, welcome to our fourth quarter and full year 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 and a session priority will be given to the covering analysts before we start let me go through our disclaimer please note that they may be forward-looking statements about the company's business and finances during this call such forward-looking statements could be could involve known and unknown uncertainties risks and 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 on our recent result 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 fourth quarter and full year 2025 and provide outlook and guidance for the following quarter. KT will provide details on the financial performance for the year and quarter. Now, I will hand the time over to our Group Chief Executive Officer, Robin.

Thank you, Ben. Good morning, good afternoon and good evening, everyone. Thank you for joining us today for our fourth quarter and full year 2025 earnings conference call. Before we begin, and as I'm sure you know by now, I recently announced my decision to step down from my role as Group Chief Executive Officer for personal reasons and to devote more time to my family. I will remain in my role until the successor is appointed to ensure a smooth and orderly transition. I'm proud of what we have achieved as a business during my time as CEO, and I'm grateful for your trust in me over the years. I'm confident that ASMPT has the right foundations and the people in place for its next phase of growth. Thank you once again for your continued support. Moving on, the group has decided to divest ASMPT next, which has been classified as a discontinued operation. Therefore, please note that unless otherwise specified on today's call, we will refer to the group's continuing operations only. Now for the key highlights for 2025. We experienced strong performance in both our SEMI and SMT businesses, supported by AI-driven structural growth. There was an increase in customer activity translating into meaningful bookings and revenue for the group, evident in both advanced packaging and our mainstream portfolio. Group bookings grew 21.7% year-on-year, driven by both SMT and Semi businesses, and our full-year revenue increased 10% year-on-year, mainly from our flagship TCB solutions. Now, let's look at TCB. TCB momentum strengthened further in 2025 with significant new orders across logic and memory solidifying our TCB technology leadership. We established deeper engagement with both logic and memory customers and saw encouraging traction in areas such as HBM and C2W ultra-fine-pitch applications. This continues to reinforce our position as a leading provider of advanced packaging solution as customers move to more complex chiplet-based and high-density architectures. Turning to our SMT segment, bookings were better than expected, supported by AI servers, China's EV ecosystem, and increased requirements for data transmission for base stations. Last but not least, we also advanced several transformation initiatives from late 2025 to date. These are to enhance focus on our backend packaging business, improve agility, and optimize our portfolio as part of a longer-term strategy. These actions will place us in a stronger position to scale capabilities in the areas where customer demand is more structurally aligned with our technology strengths. Overall, 2025 was a year where we executed well, deepened customer engagements, and continued building the foundation for sustained growth. I will elaborate further as we move through today's presentation. Let me now provide an update on the TCB total addressable market. This time last year, when we presented this slide, we expected the TEM to reach around $1 billion by 2027. Since then, the landscape has evolved meaningfully. The acceleration of AI-driven investment, especially in advanced logic and high bandwidth memory, has expanded the market significantly, more than our earlier assumptions. Based on our latest projections, we now estimate the TCP temp to grow from roughly US$759 million in 2025 to US$1.6 billion by 2028, representing a chaser of 30%. This reflects sustained adoption of 2.5D architectures. higher HBM stacks and the industries move towards final pitch interconnects. All areas where TCP is increasingly the preferred solution. Our target market share remains at 35 to 40%. This is supported by the breadth of our deep engagements across leading logic and memory customers and by the performance of our HBM C2S, and C2W TCB platforms, including strong uptake of our plasma-enabled ultrafine pitch capabilities. We are well positioned to benefit from this expanded TCB 10, and we are committed to continue investing in this exciting technology. Moving on to advanced pathogens. This remains a strong growth engine for us in 2025, supported by rising complexity in both logic and memory packaging. As customers shift further towards triplets, higher state HPM, and final pitch interconnects, we continue to see solid demand across our TCP platforms in particular. Of note, with our breakthrough into comparative HPM market, we also grew TCB market share significantly, achieving record TCB revenue growth about 146% year-on-year. In 2025, our AP revenue growth of 30.2% year-on-year was driven by TCB. As a result, AP's contribution to group revenue also increased from 26% in 2024 to 30% in 2025. Now, let's look at TCB more closely. In logic, our C2S solution maintains its dominant position as a process of record with a steady flow of orders from key OSEP customers in 2025. Extending into early 2026, we are pleased to share that we have secured additional orders for nine more TCB tools from the same customer. we are well positioned for further order wins as the market shift towards larger compound lines. At the same time, our C2W ultra-fine pitch platform enhanced with plasma AOR technology secured orders for two tools in February, 2026 from a leading customer for C2W applications. Since the announcement, we have secured two more such tools, TCP tools, from the same customer. As the industry transitions from mass reflow technology to TCP, the group stands to benefit significantly as the preferred C2W solution provider, offering plasma-enabled capabilities. This engagement underscore the confidence customers place in our ability to support tighter technical specifications and next-generation packaging roadmaps. In memory, we deepen our engagement with several customers and continue to expand our share with shipments in Q4 2025. Our tools have demonstrated superior performance with industry-leading production years and interconnect quality. We were also the first to secure HBM4-12H orders from multiple players, and we are now leading HBM4-16H development with our flux-based TCB2 deployed for sampling and our fluxless AOR-TCB process under qualification. These are important milestones for our technology leadership as HBM architectures scale further. Beyond TCB, we also made progress in hybrid bonding, where we receive customer files and ship modules. Our second generation hybrid bonding solution is highly competitive, offering high alignment precision, bonding accuracy, footprint efficiency, and units per hour. In photonics, revenue grew year on year, and we sustained our leading position in the 800G optical transceiver market. while continuing development work with industry partners on 1.60 transceiver solutions. Our CBO collaboration also continues to move forward with key global players. And in SMT SIP applications, demand remains robust, especially in AI-related RF and system-impaired application. Our next-generation chip assembly tool also gained traction among advanced logic smartphone applications. Overall, advanced packaging delivered another year of meaningful progress with broader adoption across logic, memory, photonics, and SIP, and it continues to be a central pillar of our long-term growth. And finally, our mainstream business. This accounted for about 70% of our fiscal year 25 group revenue. In 2025, AI-related demand was also a strong momentum driver for our mainstream business. Rising requirements for AI data center power management applications kept utilization rates elevated at leading global IDMs, benefiting semi-mainstreams. Meanwhile, SMT mainstream secured more orders to support increased data transmission requirements for base stations and AI server boards. In China, our mainstream business saw around 18% year-on-year revenue growth across both SEMI and SMT. SEMI's growth was driven by strong demand for YM and die-border applications underpinned by robust OSATs utilization. SMT benefited from increased deployment of AI server bots and strong demand for EEBs in 2025. With these highlights, let me now hand over the time to Katie, who will walk you through our group and segment financial performance.

Thank you, Robin. Good morning, good evening, everyone. Let me take you through the group financial performance. Before I start, I would like to reiterate that unless otherwise specified, The numbers I'll be referring to today are for the group's continuing operations only, with adjustments made under non-HKFRS measures. This slide covers our financial results for 2025. For the full year, the group delivered a revenue of $1.76 billion, representing an increase of 10.0% year-on-year, driven largely by TCB. Group bookings reached $1.86 billion, representing 21.7% year-on-year growth. Both SMT and SME registered high bookings during the year. The group continues to build a healthy backlog. We spoke to a bill of 1.05, which is our highest since 2021. In 2025, group adjusted gross margin was 38.3%. This was 172 basis points lower year-on-year, reflecting lower gross margin in both SMT, and SEMI. Group operating expenditures was 4.56 billion Hong Kong dollars, up 3.2% year-on-year, mainly driven by strategic R&D and IT infrastructure investments of 237 million Hong Kong dollars, as we communicated at the beginning of last year. These investments were partially offset by disciplined execution of cost control and efficiency measures. Now looking ahead for 2026 for Alpax, as Robin mentioned, we're committed to continuing the investment in our core technologies, and we expect Alpax to rise by about 200 million Hong Kong dollars in 2026. In 2025, both adjusted operating profit and net profit improved year on year due to high revenue and operating leverage. In the fourth quarter, We delivered a revenue for continuing operations and discontinued operations of $557.1 million that surpassed the upper end of all guidance. Coupon revenue for continuing operations was $508.9 million, representing an increase of 12.2% Q&Q and a 30.9% year-on-year, driven by a strong growth across both SEMI and SMT. Group Q4 bookings were $499.7 million. The Q on Q increase was due to stronger TCV bookings, while the year-on-year growth was largely driven by SMT's mainstream business. Group Q4 adjusted gross margin was 35.8%, down 175 basis points Q on Q and 101 basis points year-on-year. This sequential decline came from both Semi and SMT, with year-on-year decline due to lower Semi margins partially offset by higher SMT margins. Group Q4 adjusted operating profit was 161.0 million Hong Kong dollars, up 4.3% year on year, up 4.3% Q on Q due to higher revenue and operating leverage. Group Q4 adjusted net profit was 119.9 million Hong Kong dollars, up 42.2% Q on Q and 390.7% year on year, The QMQ increase was largely due to fees of 39 million Hong Kong dollars from order cancellations, while the year-on-year increase was due to stronger operating profit. Adjusted earnings per share were 30 cents Hong Kong dollar. Moving on to the semiconductor solution segment for the fourth quarter of 2025. Semi delivered a Q4 revenue of 245.6 million US dollars, an increase of 9.4% QMQ, and 19.5% year-on-year. Q-on-Q and year-on-year growth were driven by AI-related applications, mainly from photonics. Semi-Q4 bookings were $253.3 million, up 15.4% Q-on-Q and 2.3% year-on-year. The increases were due to TCV orders from advanced and larger customers and a market share gain in high and high-bounders. Semi-book-to-bill ratio in Q4 2025 was 1.03%, Q4 adjusted margin for semi came in at 40.3%, down 102 basis points Q on Q and 292 basis points year on year. The Q on Q decline was largely due to product mix and inventory provision as a result of an isolated order cancellation. Year on year decline was due to product mix, inventory provision mentioned above, and a higher factory utilization in Q4 2024 during the TCB rent. Q4 adjusted segment profit was 98.0 million Hong Kong dollars, up 62.5% Q on Q, and up significantly year on year. Both Q on Q and year on year improvements were mainly driven by higher volume and fees related to the order cancellations. Next, let me move to the SMT solution segment performance for the fourth quarter of 2025. SMT delivered strong Q4 revenue of 263.3 million U.S. dollars, up 15.0% Q on Q and 43.8% Y on Y, driven by AI servers, EVs in China, and the billing of a bulk order for smartphone applications. However, contributions from automotive and market outside of China and industrial remained soft. SMT recorded Q4 bookings of $246.4 million, down 3.9% Q on Q, but up 73%. up 73.3% year-on-year. The Q-on-Q decline was due to seasonality, while the year-on-year increase came from the demand for AI servers and EVs in China. Q4 SMT gross margin was 31.6%, down 225 basis points Q-on-Q, but up 199 basis points year-on-year. The Q-on-Q decline reflected continued weakness in automotive and industrial end markets, and the building of bulk order mentioned above which had a lower margin. The year-on-year increase was mainly due to higher volume. Q4 segment profit was 193.1 million Hong Kong dollars, up 18.5% Q on Q, and a significantly year-on-year due to higher volume. This slide highlights ASMPT's revenue breakdown by end markets. Computer end market was significantly up. becoming the largest contributor to group revenue, accounting for 22%. The growth in computing was largely driven by our TCB solutions. Consumer end market was the second largest contributor at 17%. Young year revenue growth came largely from the group's mainstream solutions, consistent with higher revenue from China. The communication end market contributed 16% to group revenue, driven by photonics and high-end smartphone-related applications. The automotive end market contributed almost 16% to group revenue, supported by EV demand in China, where the group remains the leading player. Lastly, the industrial end market contributed 10% to group revenue, reflecting soft market conditions. As you can see from this slide, we're a truly global business, partnering with customers across all major regions. China remained the largest market, contributing 41% of group revenues. However, Europe and America's decline year-on-year, mainly due to soft market conditions in S&T, with Europe's share of revenue down to 13% and America's down to 11%. Looking at Asia outside China, their proportion increased collectively from 24% to 34%, largely driven by TCB revenues. the group continued to maintain low customer concentration risk, with the top five customers representing approximately 16% of total revenue in 2025. We have an existing dividend policy of distributing about 50% of the annual profits as dividends, and we firmly believe in returning excess cash to our shareholders. For the second half of 2025, With adjusted EPS at 68 cents in Hong Kong dollars for continuing and discontinued operations, the board has recommended a final dividend of 34 cents per share. In addition, the board has recommended a special cash dividend of 79 cents per share after taking into consideration the net cash inflow from recent strategic projects. Together with the interim dividend of 26 cents per share paid in August 2025, the total dividend payment for 2025 will be HK$1.39 per share. With that, let me now pass the time back to Robin for an update on our transformation initiatives and the next quarter's revenue guidance.