ASMPT (0522.HK): TCB and Photonics to ride on generative AI trend; Neutral

We are positive on ASMPT's advanced packaging applications, supported by technology migration toward smaller pitch and increasing applications in GPUs, ASICs and HBM. We expect revenues to grow by 5% / 3% QoQ to HK$5,172mn / HK$5,325mn in 3Q26E / 4Q26E, driven by TCB and photonics tools as well as continued AI-server demand for SMT equipment. We expect TCB demand to benefit from advanced logic and HBM applications, while pluggable optical transceivers remain the main near-term growth driver for photonics; Hybrid Bonding and CPO represent longer-term opportunities. Management expects the TCB TAM to exceed US$1.6bn by 2028. Maintain Neutral on fair valuation with a 12-month target price of HK$183.