SMT 业务新增订单QoQ-5%至1.68 亿美元，系消费电子缓慢复苏、汽车和工业仍疲弱，需求不足使得SMT 业务持续消耗积压订单，但我们预计SMT 业务新增订单水平基本触底；下游疲弱叠加产品组合不利，SMT 毛利率持续下滑3.4pct 至32.3%；3）公司指引24Q4 营收区间3.8~4.6 亿美元，对应中值QoQ-2%，中值低于4.5 亿美元的市场预期。公司预计Q4 新增订单环比持平，系AI 相关先进封装(TCB)订单增长，但主流订单或因季节性环比下滑。我们持续关注逻辑和HBM 等下游需求对于24Q4 及2025 年TCB 业务的业绩带动。Event: The company released 24Q3 results on October 30, 2024. Q3 Revenue exceeded expectations. Revenue of US$0.429 billion corresponds to HK$3.34 billion, YoY -3.7%, QoQ +0.1%, exceeding market expectations by 4%, and is close to the upper limit of the previous guidance range of US$3.7 to 0.43 billion. Among them, the semiconductor solutions business had revenue of $0.229 billion, YoY +14%, and QoQ +8%, which is due to strong demand for advanced packaging, compounding the growth of mainstream semiconductor business and optoelectronics business; SMT business revenue of $0.199 billion, YoY -18%, and QoQ -8%, which is a slow recovery in the traditional semiconductor cycle. Q3 Gross margin exceeded expectations, and net profit fell far short of expectations due to exchange losses.
Q3 gross margin increased 0.94 pct to 41% month-on-month, which is an increase of 4 pct to 48.6% month-on-month in the semiconductor solutions business, offsetting the 3.4 pct month-on-month decline in the gross margin of the SMT business. Net profit for 24Q3 was HK$0.0238 billion, YoY +87%, and QoQ -83%, corresponding to a net interest rate of 0.7%, mainly due to HK$0.108 billion exchange loss in Q3. Excluding exchange rate fluctuations, net profit is expected to remain flat month-on-month.
AI demand boosted the level of new orders and gross margin in the advanced packaging business, and the slow recovery of the traditional semiconductor cycle caused the SMT business to continue to be dragged down: 24Q3 added an overall order of 0.406 billion US dollars, QoQ +1.5%, which was driven by the semiconductor business, partly offset by the weak performance of the SMT business. 1) The semiconductor business assumed growth momentum, boosted new orders, and raised gross margin levels. The semiconductor business added QoQ +7% to $0.238 billion, with a BB ratio of 1.04, which remained above 1 for 3 consecutive quarters. This means that AI-related advanced packaging orders continued to be strong, compounded by a month-on-month correction of mainstream orders; gross margin increased by 4 pct to 48.6% month-on-month, which is driven by active TCB shipments and increased capacity utilization; 2) The SMT business is still sluggish.
The SMT business added QoQ -5% to $0.168 billion, which is the slow recovery of consumer electronics, the automobile and industry are still weak, and the SMT business continues to consume backlog orders due to insufficient demand, but we expect the SMT business to basically bottom out; the weak downstream compounding the negative product portfolio, SMT gross margin continues to decline by 3.4 pct to 32.3%; 3) The company's guidance 24Q4 revenue range is 3.8 to 0.46 billion US dollars, corresponding to a median QoQ of -2%, and a median value of less than 0.45 The billion-dollar market forecast. The company expects new orders to remain flat month-on-month in Q4, which is an increase in AI-related advanced packaging (TCB) orders, but mainstream orders may decline month-on-month due to seasonality. We continue to focus on the performance of the 24Q4 and 2025 TCB business driven by downstream demand such as logic and HBM.
TCB equipment has received large orders from HBM customers, and shipments are expected to be accelerated in 24Q4 and 2025: the sharp increase in AI capital expenses will drive related customers to expand production of HBM, CoOS, and advanced packaging businesses such as TCB equipment.
We expect delivery of TCB equipment to accelerate in 24Q4 and beyond. The execution of HBM customer orders will increase the certainty of TCB business growth in 2025 and increase the long-term gross margin level. 1) In terms of logic chips, orders continued to grow. 24Q3 continues to win chip-to-wafer (C2W) orders from leading IDM customers; next-generation TCB equipment co-developed with leading foundry customers is still progressing; and continues to receive chip-to-substrate (C2S) orders from leading foundry customers and their OSAT partners. 2) HBM has made breakthroughs on the customer side. In October, we won a batch order for TCB equipment from the world's leading HBM manufacturer, which will be used in the production of the HBM3E-12H, which is expected to be delivered sequentially in 24Q4 and 25Q1.
Profit forecast, valuation and rating: The pace of recovery in the traditional semiconductor cycle fell short of expectations. The SMT business continued to be pressured, compounding exchange losses in 2024, and lowered the company's 24-26 net profit forecast to HK$0.492/1.073/1.632 billion (-13%/-20%/-19% compared to the previous forecast), corresponding to a year-on-year growth rate of -31.2%/+118.2%/+52.1%. However, considering that R&D of TCB equipment is progressing smoothly in terms of HBM and logic, batch shipments to HBM manufacturers will definitely increase TCB equipment's performance growth in 2025. I am optimistic that the company's advanced packaging business will maintain rapid growth over a long period of time; maintaining the “gain” rating.
Risk warning: semiconductor demand recovery falls short of expectations; AI computing power demand falls short of expectations; TCB equipment penetration falls short of expectations; customer expansion falls short of expectations; and the risk of fierce competition in the market.
