Why did orders substantially exceed guidance?

  • New orders in the third quarter of 2026 reached 1.128 billion US dollars, up 24.7% quarter on quarter and 137.9% year on year, significantly exceeding the company’s earlier guidance for high-single-digit sequential growth.
  • Semiconductor Solutions (SEMI) orders rose 31.3% quarter on quarter, driven by thermocompression bonding (TCB), photonics and flip-chip solutions; Surface Mount Technology (SMT) orders rose 18.9% quarter on quarter, hitting a record for the third consecutive quarter. Morgan Stanley believes AI infrastructure investment supported demand in both businesses.
  • The book-to-bill ratio rose to 1.69, above 1.43 in the second quarter and the bank’s expectation of approximately 1.4, reaching its highest level since the first quarter of 2021. More than 100 million US dollars of SMT orders came from volume orders and orders placed early, lifting the third-quarter order base.

How do the reported results compare with fourth-quarter guidance?

  • Third-quarter revenue was 5.25 billion Hong Kong dollars, up 5% quarter on quarter and 43% year on year, and 1% above market consensus. Earnings per share were 1.28 Hong Kong dollars, slightly below consensus; adjusted earnings per share were 1.65 Hong Kong dollars, above consensus.
  • The company guided for fourth-quarter revenue of 670 million to 730 million US dollars. The midpoint implies growth of 4.6% quarter on quarter and 37.5% year on year, approximately 8% above Morgan Stanley’s previous expectation.
  • The company expects SMT revenue to grow by double digits quarter on quarter, while SEMI revenue is expected to remain flat sequentially because of longer lead times for advanced packaging products. Fourth-quarter orders are expected to remain significantly above the prior-year level but decline quarter on quarter following the third quarter’s SMT volume orders and early ordering.

What progress and constraints are there in advanced packaging and photonics?

  • In the TCB business, C2S orders hit a record, and the company secured a repeat order for C2W from a leading global integrated device manufacturer for advanced CPUs. Meanwhile, customers are reassessing the timing of HBM4 production, and larger-scale investment aimed at enhancing HBM capabilities has been delayed; capacity expansion and some upgrades remain opportunities.
  • Photonics orders and revenue both reached records. AMICRA made a breakthrough with a volume order for near-package optics (NPO) and received its first optical transceiver orders from a leading communications service provider, while continuing to engage with leading co-packaged optics (CPO) participants.

What is Morgan Stanley’s assessment?

  • Morgan Stanley believes the order beat and strong fourth-quarter guidance will drive a positive share-price reaction. It reiterated its Overweight rating and set a target price of 248 Hong Kong dollars.
  • The bank also disclosed that Morgan Stanley Asia is ASMPT’s exclusive financial adviser in its evaluation of strategic options for the SMT business.