ASM INTERNATIONAL : Lower Estimates and TP Due to COVID-19, BUY reiterated
ASMI clearly continues to benefit from relentless foundry and logic spending on (sub)-10nm processes. Meanwhile, visibility of strong double digit y-o-y growth in 1H20 offers comfort amid the current uncertain backdrop. The strong bookings level should drive further growth in 2H20 as well, in our view. It appears that ASMI’s revenues have reached a sustainably higher level and that puts the company on track for very healthy mid-term earnings. This, combined with a healthy balance sheet and ongoing capital returns should be reflected in the valuation. We have reduced our Target Price to EUR130 from EUR140 due to our lower equipment market and company estimates but continue to argue that the shares should trade at a mid-term EV/EBIT multiple in the mid teens range. ASMI remains our favorite stock among the Dutch semiconductor equipment makers and we reiterate our BUY-rating.ASM International is an equipment supplier mainly to the semiconductor manufacturing industry. Co. designs, manufactures and sells equipment and services to its customers for the production of semiconductor devices, or integrated circuits. Co.'s front-end segment manufactures and sells equipment used in wafer processing, encompassing the fabrication steps in which silicon wafers are layered with semiconductor devices. Co.'s back-end segment manufactures and sells equipment and materials used in assembly and packaging, encompassing the processes in which silicon wafers are separated into individual circuits and subsequently assembled, packaged and tested.
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