Asmpt Limited Unsp/Adr

Good morning, ladies and gentlemen. I'm Ben Poh, Head of Investor Relations. And today I will be moderating the call. On behalf of ASNTT Limited, welcome to our second quarter and first half of 2026 investor conference call. Thank you all for your interest and continued support. Please know 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 our disclaimer. Please note that there may be forward-looking statements about the company, business, and finances during this call. Such forward-looking statements could involve known and unknown uncertainties and risks that could cause actual results, performance, to defer materially from those expressed or implied during this conference call. For your reference, the InvestorLations 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 second quarter and the first half of 2026 and provide outlook and guidance for the following quarter, while Katie will provide details on the financial performance. Now, I will hand the time over to our Group Chief Executive Officer, Robin.

Robin, please. Thank you, Ben. Good morning, everyone. Thank you for joining us today for our second quarter and the first half of 2026 Earnings Conference Call. Before we begin, I'm sure you are aware of the news that I'll be stepping down as Group CEO on 11th August 2026. So this will be my last quarterly earnings call with all of you. I took over as Group CEO at the very height of the COVID pandemic in May 2020, arming the first investor conference call, which was Q2 2020, and it has been quite a journey. I'm proud of what we have achieved as a business. I look forward to the company progressing on its transformation journey as it sharpens its focus on the backend packaging business. A business that has experienced rapid growth over the last few years. I'm grateful for your trust in me over the years as we've connected this journey together. Looking to the future, I'm confident that the new CEO, Mr. Gasol Herak, will continue on this transformation journey and bring ASMPT to even greater heights, given our technology leadership, strong foundations, and great people. Thank you for your continued support. Now, let me proceed with the earnings score with some key business highlights for the first half of 2026. For the first half, I'm pleased to share that ASMPT achieved strong revenue and bookings driven by AI and the recovery in our traditional mainstream business. As AI capabilities advance, semiconductor architecture requirements continue to expand beyond compute to continuous planning, workload orchestration, memory access, and Realtime Data Movement. These developments have placed increasing demands on semiconductor manufacturing to support workloads from data centers to edge devices. Next, SMP achieved record bookings largely driven by strong demand from AI servers. AI servers continue to be a significant source of demand with accelerated adoption of SMPs iFlex i4 solutions SMT bookings were also driven by demand for optical transceivers and China's EV segment Semi AP bookings doubled year on year due to photonics and TCB This highlights ASMPT multiple AP solutions which are key enablers for present and future AI infrastructure At the group level, our first half revenue increased 18.9% half on half and 42.5% year on year, mainly driven by mainstream and photonics. In photonics, we saw customers ramping up production of high speed optical transceivers for 800G and beyond. In mainstream, the group business experienced some recovery from traditional application. such as consumer, industrial and automotive EVs. Looking at our gross margin, its growth was driven mainly by S&T in Q2. And finally, we are pleased to report that our revenue and adjusted EVs beat concessors in Q2. Now let's look at the group business highlights. First, let's start with advanced packaging. This remained a strong growth engine for us in the first half, with AAP revenue growing 17% year-on-year and contributing 30% of group revenue. TCBs, S&T High Precision, and Photonics Solutions were the largest contributors within the AAP portfolio. In TCV, we expect TAM to expand beyond US$1.6 billion by 2028 due to growing AI investments and increasing packaging intensity, driving greater demand for TCV solutions. In logic, although momentum for Group's C2S solutions remains strong, This was supported by repeat orders for larger compound DAI TCP tools from OSAP partners of the leading advanced logic customers. In July, 2026, the group received new bulk orders for more than 15 C2F TCP tools from OSAP customers. In CDW, we secured a bulk order in Q2, 2026 from a leading global IDM. for advanced CPUs to support client computing and AI inferencing. We also delivered ultra-fine-pitched TCP tools to the leading advanced logic customers. In memory, the group continues to secure repeat orders from HVM manufacturers. However, the timing of some customers' new-to-purchase The group also entered into an exclusive joint evaluation program with a key memory player to establish its technology as a preferred production standard. Next, panel-level packaging is emerging as a potential growth driver for ASMPT as the industry seeks to improve throughput Scalability and cost efficiency. Beyond TCV, we saw strong performance from our photonics solutions. Customers are ramping up production on high-speed optical transceivers for 800G and beyond, as demand accelerates for bandwidth-intensive, low-latency AI workloads. As a result, semi-trackable optical transceiver solutions revenue almost tripled year-on-year to approximately US 75 million in first half 2026. The group is confident of further growth for the rest of 2026. In co-opted package for CPO, the group continues to deepen its engagement with multiple leading global CPO players, positioning well to gain market share as CPO adoption accelerates. The group offers the most comprehensive range of CPO solutions spanning ultra-high precision photoex, TCV, and hybrid bonding. I will also elaborate more on this in the next slide. Our semi-mainstream business experience significant growth supported by high utilization at leading IDMs due to improving demand for power management requirements for AI JR centers and industrial applications. In China, revenue and bookings were particularly strong with wire bonding and time bonding too demands supported by ongoing AI infrastructure expansion and high offset utilization. Our S&T bookings hit record highs for Q2 and first half of 2026. AI servers continue to be a significant source of demand with accelerated adoption of S&P high-flex high-force solution for large format board assembly. And finally, beyond AI applications, I'm pleased to share that the group's mainstream business also experienced some recovery from traditional end applications such as Consumer Devices, Industrial Systems, and Automotive Indies in China. Let me now turn to photonics as shown on this slide. We have built a strong position across the entire photonics value chain, extending from pluggable optical transceivers to CPO. Our comprehensive portfolio spans SMT, advanced packaging, and ultra-high precision photonics assembly tools. In the current optical transceiver market as shown on the left-hand side of the slide, SMTT supports multiple critical assembly steps. Our SMT placement solutions are used for digital signal processor and passive components attached. Our high-end photonics and micro solutions enabled precise placement of transmitters, receivers, chips on sub-mount, and optical accessories. Our solutions can deliver placement accuracy down to sub-micron level, a key technological differentiator. Looking ahead, the industry is transitioning towards CPO solutions to address increasing bandwidth and Power Efficiency and Latency requirements of AI infrastructure. ASMPT is well positioned in several key assembly sets. As you can see from the right-hand side of the slide, these include EIT on PIC integration through hybrid bonding and TCP solutions, optical assembly assembly using fixed-shape mass-report solutions, and fiber-attached unit and micro-lens assembly enabled We are affected about the potential in photonics, which represents another important growth factor for ASM2T. With these highlights, let me now hand the time over to Piri, who will walk you through our group's segment and financial performance.

Thank you, Robin. Good morning, good evening, everyone. Let me take you through the group's financial performance. 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 the first half of 2026. The group delivered revenue of $1.14 billion in the first half of 2026. representing an increase of 18.9% half-on-half and 42.5% year-on-year, driven by CEMI and SMT. Group bookings reached 1.63 billion US dollars, representing growth of 68.1% half-on-half and 85.1% year-on-year. Both SMT and CEMI registered significantly higher bookings during the period. Book to bill was 1.43, the highest since the first half of 2021. In the first half of 2026, group adjusted gross margin was 41.2%. This was 441 basis points higher half on half and 86 basis points higher year on year, driven by a better gross margin from both CEMI and S&P. Group adjusted operating expenditures was 2.42 billion Hong Kong dollars Up 2.4% half-on-half due to higher volume. It was also up 15.4% year-on-year due to higher volume, unfavorable effect impact, and strategic infrastructure and R&D investments as we announced at the beginning of the year. Both adjusted operating profit and net profit improved half-on-half and year-on-year due to higher revenue and operating leverage. In the second quarter, we delivered revenue of 630.0 million U.S. dollars, which exceeded the upper end of our guidance. It is grouped by 24.4% Q&Q and 52.1% year-on-year, driven by both CENI and SMT. Group Q2 bookings were 903.6 million U.S. dollars, up 24.8% Q&Q and 97.6% year-on-year. significantly better than anticipated for both SEMI and SMT. In particular, SMT's bookings came in much stronger despite a high base effect in Q1. Group Q2 adjusted gross margin was 42.5%, up 302 basis points Q on Q and 284 basis points year on year. Group Q2 adjusted operating profit was HK$847.0 million, up 114.1% QonQ and 268.8% YoY due to higher gross margin and operating leverage. Groups adjusted net profit was HK$637.5 million, up 90.2% QonQ and 253.9% YoY due to higher operating profit. Adjusted earnings per share was $100.53. Moving on to the semiconductor solution segment for the second quarter. CEMI delivered a revenue of $369.1 million, an increase of 34.9% QMQ and 56.1% Yanyi. QMQ and Yanyi growth were driven by photonics for AI-related applications and wire and die binders for both AI and consumer-related applications. Semi Q2 bookings were 428.1 million U.S. dollars, the highest since Q1 2022. Bookings grew by 39.0% Q on Q due to write and die bounders and photonics, and up 125.9% year on year due to write and die bounders, photonics, and TCB. Semi's book to bill ratio in Q2 was 1.16, which has continued to expand for the past four quarters. Q2 adjusted margin for semi came in at 46.5%, up 10 basis points Q on Q and 150 basis points Y on Y. Q on Q increase was due to higher volume offset by product mix, while Y on Y increase was largely due to higher volume. Adjusted segment profit was HK$603.2 million in Q2, up 94.9% Q on Q and 170.1% Y on Y. due to higher adjusted wealth profit and operating leverage. Next, let me move to the S&P solution segment performance for the second quarter of 2036. S&P delivered a strong Q2 revenue of $260.9 million, up 12.1% Q&Q and 46.9% year-on-year. It achieved record bookings of $475.4 million up 14.3% Q&Q and 77.6% year-on-year. Both revenue and bookings growth were largely driven by strong demand from AI servers. Q2 SMT adjusted gross margin was 36.8%, up 561 basis points Q&Q and 429 basis points year-on-year, the highest since Q1 2024. Q&Q increase was due to favorable product mix and a higher volume. while year-on-year increase was larger due to higher volume. Adjusted segment profit was HK$284.8 million in Q2 2026, up 100.8% QMQ and 386.1% year-on-year due to higher gross profit and operating leverage. Now, this slide highlights ASMPT's revenue breakdown by end markets. The computer end market was the largest contributor to group revenue at approximately 33%, up significantly from around 10% in 2024, driven mainly by SMP solutions, PCB, and photonics applications. Please note that photonics applications were reclassified from communications end market to the computer end market for both first half of 2026 and first half of 2025, reflecting the increasing alignment with AI-related applications. The consumer end market was the second largest contributor to group revenue at approximately 18%, mainly from groups' traditional mainstream business. The automotive end market contributed almost 12% to groups' revenue. Revenue growth was driven by EVs in China, while automotive for the rest of the world remained soft. The communication end market contributed around 10% to group revenue, mainly coming from high-end smartphone-related applications. Lastly, the industrial and market revenue contribution was up marginally from 8% to 9% due to gradual recovery in industrial activity. Now, as you can see from this slide, we are truly global business, partnering with customers across all major regions. China remained the largest market, contributing 42% of group revenue in first half 2026, driven by Y and Y bounders, while share of revenue from Asia outside China declined from 37.9% to 36.2%. Share of revenue from both Europe and America declined in the young year from 23.7% in first half 2025 to 21.3% in first half 2026. The group continued to maintain a low customer concentration risk. with the top five customers representing approximately 19% of total revenue in first half 2026. We have an existing dividend policy of distributing about 50% of the profits as dividend. For the first half of 2026 with adjusted EPS at HK$1.94 for continuing and discontinued operations. The board has recommended an interim dividend of $0.97 per share. With that, let me now pass the time back to Robin for next quarter's revenue guidance.