On July 24th, ASMPT (00522.HK), a leading company in the semiconductor packaging sector of the Hong Kong stock market, experienced a significant drop with a gap, and as of the time of writing, the decline has widened to 23.41%, trading at 87.7 Hong Kong dollars, with a latest market capitalization of 36.352 billion Hong Kong dollars.

This represents a loss of approximately 11.16 billion Hong Kong dollars compared to the previous trading day's market capitalization of 47.52 billion Hong Kong dollars.

In terms of news, ASMPT announced its interim results for 2024, which were less than satisfactory.

According to the financial report, in the first half of 2024, ASMPT's sales revenue was 6.48 billion Hong Kong dollars, a decrease of 17.1% year-on-year; the net profit attributable to the parent company was 314 million Hong Kong dollars, a decrease of 49.6% year-on-year, almost halved.

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Moreover, a significant reduction in dividends further intensified the disappointment among investors.

The announcement shows that ASMPT plans to pay an interim dividend of 35 Hong Kong cents per share, a reduction of 42.6% compared to the 61 Hong Kong cents in the same period last year.

In the second quarter, ASMPT's sales revenue was 3.34 billion Hong Kong dollars, a year-on-year decrease of 14.3%; the net profit attributable to the parent company was 137 million Hong Kong dollars, a year-on-year decline of 55.6%; the gross margin was 40%, a decrease of 0.1 percentage points compared to the same period last year.

Overall, there was no sign of a halt in the decline and rebound in the second quarter's performance.

Morgan Stanley issued a report pointing out that ASMPT's second-quarter performance was below expectations, with revenue of 3.342 billion yuan, 4% higher than the bank and market expectations.

The net profit was 135 million yuan, 25% and 34% lower than the bank and market expectations, respectively.

Data shows that ASMPT is a leading global supplier of semiconductor and electronic product manufacturing hardware and software solutions, with products covering semiconductor assembly and packaging (chip integration, welding, packaging) and SMT (Surface Mount Technology), from wafer deposition to various solutions that help organize, assemble, and package fine electronic components for customers to use in various end-user devices, such as electronic products, mobile communication equipment, computing devices, automobiles, industry, and LED (display panels).

Looking at the business segments, ASMPT mainly operates through two divisions: semiconductor solutions and surface mounting technology solutions.

In recent years, the semiconductor industry has been deeply affected by cyclical fluctuations and is currently experiencing a "bottoming out" phase.

At the same time, the recovery of demand in the consumer electronics market has not met expectations, putting continuous performance pressure on semiconductor companies, including ASMPT.

In the first half of this year, ASMPT's semiconductor solutions division and surface mounting technology solutions division's sales revenue decreased by 17.1% and 5.8% year-on-year and half-on-half, respectively.

Faced with industry-wide challenges, some industry insiders have said that the semiconductor industry is a cyclical industry with strong cycles, currently in a phase of slowly recovering from the trough, and it will take some time to climb to the peak, and the overall environment is indeed difficult.

ASMPT also frankly stated in its interim performance announcement that due to moderate consumer willingness to spend, the company's semiconductor solutions business will take longer than expected to recover.

In addition, the surface mounting technology solutions division will continue to face a slowdown in the market in the short term.

Looking ahead to the third quarter, ASMPT's performance remains pessimistic.

The company expects sales revenue in the third quarter to be between 370 million and 430 million US dollars, with a middle figure of a year-on-year and quarter-on-quarter decline of 9.9% and 6.4%, respectively.

This is mainly due to the decline in sales revenue of the surface mounting technology solutions division.

However, in the midst of challenges, new opportunities are also emerging, especially with the rapid development of technologies such as artificial intelligence, big data, and cloud computing, the demand for high-performance computing and high-density integration is increasing, providing a broad space for the development of advanced packaging technology.

ASMPT's management believes that since the semiconductor solutions division and the surface mounting technology solutions division have different business cycles, their growth and slowdown can complement each other.

In addition, the management also stated that advanced packaging and mainstream solutions involve different levels of the industry, which also helps the company to navigate different industry cycles.

Investment bank Morgan Stanley believes that, on a median basis, ASMPT's expected third-quarter revenue will fall by 6.4% quarter-on-quarter, which is 17% and 20% lower than the bank and market expectations, respectively.

The company remains optimistic about the prospects of advanced packaging in the short term but believes that the mainstream semiconductor business will take a longer time to recover.