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原始內容
原始內容
ASE Technology Holding (3711 TT)
Target price: TWD710.00 (from TWD550.00)
Shareprice(29Oct):TWD683.00 | Up/downside:+4.0%
Entering an even stronger earnings cycle (III)
- 3Q26 results and 4Q26 guidance all beat expectations
- Strong AI scaling is getting even stronger to benefit LEAP
- Reaffirm Outperform (2) call with a higher 12M TP of TWD710
What's new: ASE disclosed a strong set of quarterly results and guidance on 29 October, both beating market expectations, thanks to the strong AI scaling which is just getting stronger to benefit ASE's leading-edge advanced packaging (LEAP) business. We raise our forecasts and 12M TP and reaffirm our Outperform (2) call on the stock; accumulate into any technical pullback.
What's the impact: Results and guidance all beat. ASE reported 3Q26 net profit of c.TWD27bn, beating our/consensus estimates by 25%/18% thanks to higher semiconductor assembly & test (SAT, or IC ATM by company definition) revenue which came in at TWD151bn (USD4.7bn), 7% above our estimate, for higher gross margin (GM) of 30.5%, 1.9pp above ours and topping ASE's structural target of 24-30%. The strength was amplified further by lower non-operating losses, resulting in the strong bottom-line beat (table on p.2). Guidance was another beat thanks to the strong SAT business where ASE expects revenue to grow 11-13% QoQ for GM to top its record of 30.5% during the COVID upturn. We raise our 202628E EPS by 14-24% assuming its SAT GM to reach 33% through 2027.
Strong AI gets stronger. Discussions centred on ASE's LEAP business, where management further hiked revenue target this year beyond USD4bn (USD1.6bn in 2025), after 3 hikes YTD, thanks to strong demand for its onsubstrate (oS) packaging and initial ramp of its full-process solutions. With addition of new co-packaged optics (CPO) solutions, ASE expects the LEAP revenue to double YoY in 2027. As LEAP is margin-accretive, ASE expects the SAT GM to continue improving beyond 4Q26, making the ceiling of its structural GM target now as the floor to kick off 2027 for a strong start. Given management's emphasis on 'friendly pricing', we expect likely continued cost passthrough across the supply chain to add to GM upside. Working hard to narrow the supply/demand gap, ASE further raised this year's capex to USD11.5bn (from USD10.5bn), reinforcing our view that AI is scaling strongly to accelerate the chip industry growth.
What we recommend: Given our forecast revisions, we raise our 12M TP for ASE to TWD710 (previous: TWD550), based on our revised ROEadjusted PBR target of 5.8x (previous: 5.2x) 2027E BVPS due to a higher ROE trajectory. Our revised TP translates into 24x 4-quarter forward PER, which we see as justifying the rich PBR target given its 2026-28E EPS CAGR of 25%. We reiterate our Outperform (2) call with key downside risks of any 'silicon inflation' and geopolitical overhang leading to AI capex cut.
How we differ: Our 2026-27E EPS are 5-10% above the consensus as we believe the street has yet to factor in its stronger LEAP business.
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Rick Hsu (886) 2 8758 6261
rick.hsu@daiwacm-cathay.com.tw
Sam Weng (886) 2 8758 6255 sam.weng@daiwacm-cathay.com.tw
Forecast revisions (%)
| Year to 31 Dec | 26E | 27E | 28E |
|---|---|---|---|
| Revenue change | 4.1 | 9.8 | 11.5 |
| Net profit change | 15.1 | 24.2 | 23.6 |
| Core EPS (FD) change | 14.4 | 23.5 | 22.9 |
Source: Daiwa forecasts
Share price performance
| 12-month range | 209.00-762.00 |
|---|---|
| Market cap (USDbn) | 94.54 |
| 3m avg daily turnover (USDm) | 351.17 |
| Shares outstanding (m) | 4,488 |
| Major shareholder | ASE Enterprises Ltd. (15.6%) |
Financial summary (TWD)
| Year to 31 Dec | 26E | 27E | 28E |
|---|---|---|---|
| Revenue (m) | 871,828 | 1,105,165 | 1,213,097 |
| Operating profit (m) | 111,458 | 176,633 | 191,567 |
| Net profit (m) | 92,256 | 134,410 | 144,891 |
| Core EPS (fully-diluted) | 20.556 | 29.949 | 32.284 |
| EPS change (%) | 124.9 | 45.7 | 7.8 |
| Daiwa vs Cons. EPS (%) | 9.7 | 5.3 | (12.3) |
| PER (x) | 33.2 | 22.8 | 21.2 |
| Dividend yield (%) | 1.0 | 1.2 | 1.8 |
| DPS | 6.6 | 8.0 | 12.0 |
| PBR (x) | 7.5 | 6.0 | 5.1 |
| EV/EBITDA (x) | 17.2 | 12.6 | 11.3 |
| ROE (%) | 24.4 | 29.2 | 26.1 |
Source: FactSet, Daiwa forecasts
ASE: quarterly P&L estimates and forecasts
| TWDm | 1Q26 | 2Q26 | 3Q26 | 4Q26E | 1Q27E | 2Q27E | 3Q27E | 4Q27E | 2025 | 2026E | 2027E | 2028E |
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| SAT revenue* | 112,301 | 125,653 | 151,164 | 169,944 | 165,852 | 177,034 | 187,820 | 194,537 | 388,194 | 559,062 | 725,243 | 786,368 |
| EMS revenue | 61,361 | 65,411 | 92,997 | 92,997 | 79,047 | 83,000 | 103,750 | 114,125 | 257,194 | 312,766 | 379,922 | 426,730 |
| Total revenue | 173,662 | 191,064 | 244,161 | 262,941 | 244,899 | 260,034 | 291,570 | 308,662 | 645,388 | 871,828 | 1,105,165 | 1,213,097 |
| SAT COGS | (83,346) | (91,376) | (104,990) | (115,054) | (112,515) | (119,931) | (126,584) | (130,937) | (297,695) | (394,766) | (489,967) | (533,893) |
| EMS COGS | (55,467) | (59,538) | (85,204) | (85,092) | (72,091) | (75,696) | (94,620) | (104,082) | (233,499) | (285,301) | (346,489) | (389,177) |
| Total COGS | (138,813) | (150,914) | (190,194) | (200,146) | (184,606) | (195,627) | (221,204) | (235,019) | (531,194) | (680,068) | (836,456) | (923,071) |
| SAT GP | 28,956 | 34,277 | 46,174 | 54,890 | 53,336 | 57,103 | 61,236 | 63,600 | 90,499 | 164,296 | 235,276 | 252,475 |
| EMS GP | 5,894 | 5,873 | 7,793 | 7,905 | 6,956 | 7,304 | 9,130 | 10,043 | 23,695 | 27,465 | 33,433 | 37,552 |
| Total gross profit (GP) | 34,850 | 40,150 | 53,967 | 62,794 | 60,293 | 64,407 | 70,366 | 73,643 | 114,194 | 191,761 | 268,709 | 290,027 |
| SG&A | (7,844) | (8,815) | (10,061) | (11,044) | (10,776) | (11,181) | (11,663) | (11,883) | (29,822) | (37,762) | (45,503) | (48,912) |
| R&D | (9,210) | (9,941) | (10,500) | (11,832) | (11,265) | (11,441) | (11,080) | (11,729) | (32,851) | (41,483) | (45,516) | (48,490) |
| PPA amortisation** | (264) | (264) | (264) | (264) | (264) | (264) | (264) | (264) | (765) | (1,057) | (1,057) | (1,057) |
| Operating profit | 17,532 | 21,130 | 33,142 | 39,654 | 37,987 | 41,520 | 47,359 | 49,767 | 50,756 | 111,458 | 176,633 | 191,567 |
| Net interest income (expense) | (600) | (1,100) | (2,200) | (2,700) | (2,750) | (2,750) | (2,750) | (2,750) | (1,660) | (6,600) | (11,000) | (12,800) |
| Other non-op gains (losses) | 1,268 | 5,666 | 1,768 | 700 | 700 | 700 | 700 | 700 | 2,206 | 9,402 | 2,800 | 2,800 |
| Pretax profit | 18,200 | 25,696 | 32,710 | 37,654 | 35,937 | 39,470 | 45,309 | 47,717 | 51,302 | 114,260 | 168,433 | 181,567 |
| Income tax | (3,635) | (4,172) | (4,831) | (6,778) | (6,469) | (7,105) | (8,156) | (8,589) | (9,461) | (19,416) | (30,318) | (32,682) |
| Minority interest & others | (417) | (460) | (883) | (828) | (791) | (868) | (997) | (1,050) | (1,182) | (2,588) | (3,706) | (3,994) |
| Net profit | 14,148 | 21,064 | 26,996 | 30,048 | 28,678 | 31,497 | 36,157 | 38,078 | 40,659 | 92,256 | 134,410 | 144,891 |
| FD EPS | 3.19 | 4.72 | 6.04 | 6.70 | 6.39 | 7.02 | 8.06 | 8.48 | 9.14 | 20.56 | 29.95 | 32.28 |
| O/S (m) | 4,436 | 4,461 | 4,471 | 4,488 | 4,488 | 4,488 | 4,488 | 4,488 | 4,448 | 4,488 | 4,488 | 4,488 |
| EBITDA | 36,992 | 41,190 | 56,352 | 64,545 | 62,897 | 67,980 | 74,819 | 78,175 | 118,196 | 199,079 | 283,871 | 311,124 |
| Margin | ||||||||||||
| SAT GM | 26% | 27% | 31% | 32% | 32% | 32% | 33% | 33% | 23% | 29% | 32% | 32% |
| EMS GM | 10% | 9% | 8% | 9% | 9% | 9% | 9% | 9% | 9% | 9% | 9% | 9% |
| Total gross margin (GM) | 20% | 21% | 22% | 24% | 25% | 25% | 24% | 24% | 18% | 22% | 24% | 24% |
| Operating | 10% | 11% | 14% | 15% | 16% | 16% | 16% | 16% | 8% | 13% | 16% | 16% |
| Net | 8% | 11% | 11% | 11% | 12% | 12% | 12% | 12% | 6% | 11% | 12% | 12% |
| Growth (QoQ) | ||||||||||||
| SAT revenue | 3% | 12% | 20% | 12% | -2% | 7% | 6% | 4% | ||||
| EMS revenue | -10% | 7% | 42% | 0% | -15% | 5% | 25% | 10% | ||||
| Total revenue | -2% | 10% | 28% | 8% | -7% | 6% | 12% | 6% | ||||
| Gross profit | 0% | 15% | 34% | 16% | -4% | 7% | 9% | 5% | ||||
| Operating profit | -1% | 21% | 57% | 20% | -4% | 9% | 14% | 5% | ||||
| Net profit | -4% | 49% | 28% | 11% | -5% | 10% | 15% | 5% | ||||
| FD EPS | -4% | 48% | 28% | 11% | -5% | 10% | 15% | 5% | ||||
| Growth (YoY) | ||||||||||||
| SAT revenue | 30% | 36% | 51% | 55% | 48% | 41% | 24% | 14% | 20% | 44% | 30% | 8% |
| EMS revenue | -1% | 12% | 36% | 36% | 29% | 27% | 12% | 23% | -5% | 22% | 21% | 12% |
| Total revenue | 17% | 27% | 45% | 48% | 41% | 36% | 19% | 17% | 8% | 35% | 27% | 10% |
| Gross profit | 40% | 56% | 87% | 81% | 73% | 60% | 30% | 17% | 18% | 68% | 40% | 8% |
| Operating profit | 81% | 107% | 151% | 124% | 117% | 96% | 43% | 26% | 29% | 120% | 58% | 8% |
| Net profit | 87% | 180% | 148% | 104% | 103% | 50% | 34% | 27% | 25% | 127% | 46% | 8% |
| FD EPS | 87% | 177% | 146% | 102% | 100% | 49% | 33% | 27% | 24% | 125% | 46% | 8% |
Source: Company, Daiwa estimates and forecasts
Note: * Semiconductor assembly & testing, or IC ATM as defined by ASE, including IC assembly, testing, materials such as substrates, and others; ** Associated with SPIL acquisition in 2017
ASE: 3Q26 results and 4Q26 guidance check
| TWDm | 3Q26 - Actual | 3Q26 - Daiwa | 3Q26 - Variance | 3Q26 - QoQ | Growth - YoY | Growth - Guidance | 4Q26E - Daiwa (previous) |
|---|---|---|---|---|---|---|---|
| Revenue | 244,161 | 232,251 | 5% | 28% | 45% | ||
| SAT* | 151,164 | 140,676 | 7% | 20% | 51% IC | ATM revenue in TWD to grow 11-13% QoQ | up 6% QoQ |
| EMS | 92,997 | 91,575 | 2% | 42% | 36% | EMS revenue in TWD to be flat QoQ | flat QoQ |
| Gross profit | 53,967 | 48,721 | 11% | 34% | 87% | ||
| SAT | 46,174 | 40,296 | 15% | 35% | 105% | IC ATM GM to rise 100-200bps QoQ | 30% |
| EMS | 7,793 | 8,425 | -8% | 33% | 22% | EMS OPM to be c.2% | 9.5% (GM) |
| Operating profit | 33,142 | 28,018 | 18% | 57% | 151% | ||
| Pretax profit | 32,710 | 27,018 | 21% | 27% | 134% | ||
| Net profit | 26,996 | 21,561 | 25% | 28% | 148% | ||
| Adjusted EPS (TWD) | 6.04 | 4.82 | 25% | 28% | 146% | ||
| Margin | |||||||
| Gross | 22.1% | 21.0% | 1.1% | ||||
| SAT | 30.5% | 28.6% | 1.9% | ||||
| EMS | 8.4% | 9.2% | -0.8% | ||||
| Operating | 13.6% | 12.1% | 1.5% | ||||
| Net | 11.1% | 9.3% | 1.8% | ||||
| Operation | |||||||
| Wirebonder utilisation | c.full | 85% | |||||
| Tester utilisation | c.full | 85% | |||||
| Bumping utilisation | c.full | 85% |
Source: Company, Daiwa estimates and forecasts
Note: * Semiconductor assembly & testing, or IC ATM as defined by the company, includes IC assembly, testing, materials such as substrates, and other revenues
Financial summary
Key assumptions
| Year to 31 Dec | 2021 | 2022 | 2023 | 2024 | 2025 | 2026E | 2027E | 2028E |
|---|---|---|---|---|---|---|---|---|
| Packaging utilisation (%) | 85.5 | 81.9 | 64.3 | 64.2 | 73.6 | 85.3 | 84.3 | 81.9 |
| Testing utilisation (%) | 81.2 | 83.7 | 64.4 | 63.9 | 74.1 | 82.1 | 84.8 | 83.0 |
| FC & bumping utilisation (%) | 87.1 | 88.0 | 64.0 | 64.5 | 75.4 | 84.6 | 85.0 | 81.7 |
Profit and loss (TWDm)
| Year to 31 Dec | 2021 | 2022 | 2023 | 2024 | 2025 | 2026E | 2027E | 2028E |
|---|---|---|---|---|---|---|---|---|
| SAT sales | 330,509 | 368,906 | 313,696 | 324,117 | 388,194 | 559,062 | 725,243 | 786,368 |
| EMS sales | 239,488 | 301,967 | 268,218 | 271,293 | 257,194 | 312,766 | 379,922 | 426,730 |
| Other Revenue | 0 | 0 | 0 | 0 | 0 | 0 | 0 | (0) |
| Total Revenue | 569,997 | 670,873 | 581,914 | 595,410 | 645,388 | 871,828 | 1,105,165 | 1,213,097 |
| Other income | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| COGS | (459,487) | (535,942) | (490,157) | (498,412) | (531,194) | (680,068) | (836,456) | (923,071) |
| SG&A | (26,398) | (29,608) | (25,454) | (28,458) | (29,822) | (37,762) | (45,503) | (48,912) |
| Other op.expenses | (21,832) | (25,147) | (25,975) | (29,311) | (33,616) | (42,540) | (46,572) | (49,547) |
| Operating profit | 62,280 | 80,176 | 40,328 | 39,229 | 50,756 | 111,458 | 176,633 | 191,567 |
| Net-interest inc./(exp.) | (2,580) | (2,300) | (2,280) | (1,800) | (1,660) | (6,600) | (11,000) | (12,800) |
| Assoc/forex/extraord./others | 20,791 | 3,750 | 4,553 | 4,315 | 2,206 | 9,402 | 2,800 | 2,800 |
| Pre-tax profit | 80,491 | 81,626 | 42,601 | 41,744 | 51,302 | 114,260 | 168,433 | 181,567 |
| Tax | (14,360) | (16,399) | (9,042) | (7,770) | (9,461) | (19,416) | (30,318) | (32,682) |
| Min. int./pref. div./others | (2,137) | (3,137) | (1,833) | (1,463) | (1,182) | (2,588) | (3,706) | (3,994) |
| Net profit (reported) | 63,994 | 62,090 | 31,726 | 32,511 | 40,659 | 92,256 | 134,410 | 144,891 |
| Net profit (adjusted) | 63,994 | 62,090 | 31,726 | 32,511 | 40,659 | 92,256 | 134,410 | 144,891 |
| EPS (reported)(TWD) | 14.518 | 14.228 | 7.197 | 7.364 | 9.141 | 20.556 | 29.949 | 32.284 |
| EPS (adjusted)(TWD) | 14.518 | 14.228 | 7.197 | 7.364 | 9.141 | 20.556 | 29.949 | 32.284 |
| EPS (adjusted fully-diluted)(TWD) | 14.518 | 14.228 | 7.197 | 7.364 | 9.141 | 20.556 | 29.949 | 32.284 |
| DPS (TWD) | 4.200 | 7.000 | 8.800 | 5.200 | 5.300 | 6.600 | 8.000 | 12.000 |
| EBIT | 62,280 | 80,176 | 40,328 | 39,229 | 50,756 | 111,458 | 176,633 | 191,567 |
| EBITDA | 116,804 | 135,627 | 98,429 | 99,044 | 118,196 | 199,079 | 283,871 | 311,124 |
Cash flow (TWDm)
| Year to 31 Dec | 2021 | 2022 | 2023 | 2024 | 2025 | 2026E | 2027E | 2028E |
|---|---|---|---|---|---|---|---|---|
| Profit before tax | 80,491 | 81,626 | 42,601 | 41,744 | 51,302 | 114,260 | 168,433 | 181,567 |
| Depreciation and amortisation | 54,524 | 55,452 | 58,101 | 59,815 | 67,440 | 87,621 | 107,238 | 119,557 |
| Tax paid | (14,360) | (16,399) | (9,042) | (7,770) | (9,461) | (19,416) | (30,318) | (32,682) |
| Change in working capital | (37,629) | (26,372) | 32,233 | (4,856) | (9,916) | 3,100 | (43,000) | 15,500 |
| Other operational CF items | (1,293) | 16,695 | (9,471) | 1,854 | 42,885 | 17,412 | 6,294 | 6,006 |
| Cash flow from operations | 81,734 | 111,001 | 114,422 | 90,788 | 142,249 | 202,977 | 208,648 | 289,948 |
| Capex | (70,906) | (72,640) | (54,158) | (79,522) | (164,643) | (358,038) | (341,867) | (182,252) |
| Net (acquisitions)/disposals | 23,724 | (75) | 327 | 156 | (446) | 246 | 0 | 0 |
| Other investing CF items | (1,909) | (1,238) | (1,292) | (4,543) | (556) | 0 | 0 | 0 |
| Cash flow from investing | (49,092) | (73,952) | (55,122) | (83,909) | (165,644) | (357,792) | (341,867) | (182,252) |
| Change in debt | 22,343 | (31,190) | (10,817) | 16,487 | 67,043 | 143,312 | 168,902 | (36,086) |
| Net share issues/(repurchases) | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Dividends paid | (18,083) | (29,991) | (37,841) | (22,459) | (23,034) | (29,621) | (35,904) | (53,856) |
| Other financing CF items | (10,132) | (1,278) | (443) | (1,299) | 1,260 | 0 | 0 | 0 |
| Cash flow from financing | (5,871) | (62,459) | (49,101) | (7,271) | 45,269 | 113,691 | 132,998 | (89,942) |
| Forex effect/others | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Change in cash | 26,771 | (25,410) | 10,199 | (392) | 21,874 | (41,123) | (221) | 17,754 |
| Free cash flow | 10,827 | 38,361 | 60,264 | 11,266 | (22,394) | (155,061) | (133,219) | 107,696 |
Source: FactSet, Daiwa forecasts
Financial summary continued …
Balance sheet (TWDm)
| Year to 31 Dec | 2021 | 2022 | 2023 | 2024 | 2025 | 2026E | 2027E | 2028E |
|---|---|---|---|---|---|---|---|---|
| Cash & short-term investment | 79,007 | 64,866 | 71,369 | 84,883 | 100,223 | 59,345 | 59,124 | 76,878 |
| Inventory | 73,245 | 92,826 | 63,275 | 61,181 | 69,383 | 69,283 | 89,283 | 88,783 |
| Accounts receivable | 115,462 | 114,647 | 99,529 | 113,420 | 125,042 | 92,042 | 180,042 | 125,042 |
| Other current assets | 24,644 | 28,028 | 27,174 | 15,801 | 19,147 | 20,000 | 18,000 | 15,000 |
| Total current assets | 292,358 | 300,367 | 261,348 | 275,285 | 313,795 | 240,670 | 346,449 | 305,703 |
| Fixed assets | 239,868 | 268,235 | 264,872 | 312,531 | 421,115 | 687,655 | 926,803 | 995,696 |
| Goodwill & intangibles | 75,980 | 72,835 | 69,569 | 67,562 | 64,807 | 61,000 | 58,000 | 55,000 |
| Other non-current assets | 64,729 | 65,631 | 70,788 | 85,319 | 89,617 | 76,569 | 76,569 | 74,569 |
| Total assets | 672,934 | 707,068 | 666,575 | 740,698 | 889,333 | 1,065,894 | 1,407,821 | 1,430,968 |
| Short-term debt | 34,319 | 34,527 | 40,525 | 34,989 | 31,825 | 31,825 | 31,825 | 31,825 |
| Accounts payable | 84,470 | 78,997 | 70,329 | 78,221 | 88,754 | 58,754 | 123,754 | 83,754 |
| Other current liabilities | 92,139 | 108,737 | 111,495 | 117,730 | 123,769 | 130,098 | 158,086 | 178,478 |
| Total current liabilities | 210,928 | 222,261 | 222,348 | 230,940 | 244,349 | 220,678 | 313,666 | 294,057 |
| Long-term debt | 159,530 | 144,528 | 109,014 | 146,554 | 221,959 | 360,861 | 504,775 | 454,298 |
| Other non-current liabilities | 27,844 | 20,355 | 17,104 | 17,418 | 49,658 | 45,000 | 45,000 | 46,000 |
| Total liabilities | 398,302 | 387,143 | 348,466 | 394,911 | 515,966 | 626,539 | 863,441 | 794,355 |
| Share capital | 44,034 | 43,642 | 43,802 | 44,153 | 44,480 | 44,086 | 44,086 | 44,086 |
| Reserves/R.E./others | 216,043 | 257,643 | 254,024 | 279,371 | 302,420 | 366,213 | 467,533 | 555,770 |
| Shareholders' equity | 260,077 | 301,285 | 297,825 | 323,523 | 346,900 | 410,299 | 511,619 | 599,856 |
| Minority interests | 14,556 | 18,640 | 20,284 | 22,264 | 26,468 | 29,056 | 32,762 | 36,756 |
| Total equity & liabilities | 672,934 | 707,068 | 666,575 | 740,698 | 889,333 | 1,065,894 | 1,407,821 | 1,430,968 |
| EV | 3,194,702 | 3,198,133 | 3,163,757 | 3,184,227 | 3,245,333 | 3,427,701 | 3,575,542 | 3,511,305 |
| Net debt/(cash) | 114,842 | 114,189 | 78,169 | 96,659 | 153,562 | 333,341 | 477,476 | 409,245 |
| BVPS (TWD) | 59.001 | 69.039 | 67.565 | 73.278 | 77.990 | 91.421 | 113.997 | 133.658 |
Key ratios (%)
| Year to 31 Dec | 2021 | 2022 | 2023 | 2024 | 2025 | 2026E | 2027E | 2028E |
|---|---|---|---|---|---|---|---|---|
| Sales (YoY) | 19.5 | 17.7 | (13.3) | 2.3 | 8.4 | 35.1 | 26.8 | 9.8 |
| EBITDA (YoY) | 35.6 | 16.1 | (27.4) | 0.6 | 19.3 | 68.4 | 42.6 | 9.6 |
| Operating profit (YoY) | 78.6 | 28.7 | (49.7) | (2.7) | 29.4 | 119.6 | 58.5 | 8.5 |
| Net profit (YoY) | 131.9 | (3.0) | (48.9) | 2.5 | 25.1 | 126.9 | 45.7 | 7.8 |
| Core EPS (fully-diluted) (YoY) | 128.3 | (2.0) | (49.4) | 2.3 | 24.1 | 124.9 | 45.7 | 7.8 |
| Gross-profit margin | 19.4 | 20.1 | 15.8 | 16.3 | 17.7 | 22.0 | 24.3 | 23.9 |
| EBITDA margin | 20.5 | 20.2 | 16.9 | 16.6 | 18.3 | 22.8 | 25.7 | 25.6 |
| Operating-profit margin | 10.9 | 12.0 | 6.9 | 6.6 | 7.9 | 12.8 | 16.0 | 15.8 |
| Net profit margin | 11.2 | 9.3 | 5.5 | 5.5 | 6.3 | 10.6 | 12.2 | 11.9 |
| ROAE | 26.7 | 22.1 | 10.6 | 10.5 | 12.1 | 24.4 | 29.2 | 26.1 |
| ROAA | 10.2 | 9.0 | 4.6 | 4.6 | 5.0 | 9.4 | 10.9 | 10.2 |
| ROCE | 14.1 | 16.6 | 8.3 | 7.9 | 8.8 | 15.3 | 18.5 | 17.4 |
| ROIC | 13.6 | 15.6 | 7.7 | 7.6 | 8.5 | 14.2 | 16.1 | 15.2 |
| Net debt to equity | 44.2 | 37.9 | 26.2 | 29.9 | 44.3 | 81.2 | 93.3 | 68.2 |
| Effective tax rate | 17.8 | 20.1 | 21.2 | 18.6 | 18.4 | 17.0 | 18.0 | 18.0 |
| Accounts receivable (days) | 66.4 | 62.6 | 67.2 | 65.3 | 67.4 | 45.4 | 44.9 | 45.9 |
| Current ratio (x) | 1.4 | 1.4 | 1.2 | 1.2 | 1.3 | 1.1 | 1.1 | 1.0 |
| Net interest cover (x) | 24.1 | 34.9 | 17.7 | 21.8 | 30.6 | 16.9 | 16.1 | 15.0 |
| Net dividend payout | 67.1 | 47.7 | 62.5 | 72.4 | 72.5 | 72.9 | 38.9 | 40.1 |
| Free cash flow yield | 0.4 | 1.3 | 2.0 | 0.4 | n.a. | n.a. | n.a. | 3.5 |
Source: FactSet, Daiwa forecasts
Company profile
Established in April 2018, ASE Industrial Holding Co (HoldCo) is a holding company which privatized ASE and SPIL fully on 30 April 2018 through equity and cash swap, respectively, and listed on the same day with senior management assigned mainly by ASE. HoldCo has become the strong No.1 OSAT maker in the world, offering a comprehensive product portfolio to its customers from wirebonding, flipchip & bumping, system-in-package (SiP) to broad-based electronics manufacturing services (EMS).
ESG analysis
ESG risks
| Risks | Management | Analystcomments | |
|---|---|---|---|
| G | Executive/board quality | 2 | ASE's Board of Directors consists of nine members with diverse professional backgrounds. Three of the directors are independent, representing 33 percent of the board. The Chairman also serves as the Chief Executive Officer, resulting in unified leadership and centralized decision- making. To maintain effective governance and oversight under this structure, ASE relies on its independent directors and established board processes. The board currently includes one female director, and the company continues to pursue long-term goals related to board diversity and balanced representation. ASE has an Audit Committee, Compensation Committee, Risk Management Committee, and Chief Government Officer to conduct effective supervision. |
| Capital management | 3 | In the past 5 years, ASE paid over 50% or nearly 50% of its earnings in dividends. However, the dividend trend was volatile in dollar and payout ratio terms. We forecast its dividend payout ratio to average over 50% in the next 2 years. | |
| Related party & transaction | 2 | ASE undertakes related-party transactions with its subsidiaries on sales and purchases. The total related-party transaction sales/purchase amounts were less than 10% of its total sales/purchases, and the transaction terms with related parties were normal compared with those with other customers/suppliers. Thus, we do not think related-party transactions have a meaningful impact on overall operations. | |
| S | Supplychain management | 2 | The supply of raw materials has the most direct impact on ASE's operations and manufacturing. To lower overall supply-chain risks, ASE has expanded the scope of sustainability risk management to non-tier-1 suppliers. ASE currently has over 600 non-tier-1 suppliers. ASE requires its suppliers to comply with its Supplier Code of Conduct, which aims to ensure that suppliers conduct business in a manner that meets labour, health & safety, environment, business ethics & management, and various corporate compliance standards. |
| E management | Water&wastewater | 2 | ASE has adopted 3 water-use strategies of reduce, reuse and recycle. Through its water management measures, it reduced water consumption density (water consumption/revenue) by 43% in 2024 vs. that of 2015. ASE is committed to increasing water reuse at its facilities in order to improve water efficiency. |
| E | Waste & hazardous materials management | 1 | ASE is committed to improving waste recycling and reuse through the 5 key elements of a circular economy of: direct recycling, reuse, off-site regeneration, renewable materials, and supply and rental. The recycling rate of general waste was 90% in 2024 and its hazardous waste density declined by 53% in 2024 vs. that of 2015. |
| E | GHGemissions | 1 | ASE is committed to achieving net zero emissions by advancing low carbon energy adoption, developing smart grid technologies, and strengthening high tech energy management systems. As of 2024, 19% of total manufacturing energy consumption comes from renewable sources, 88% of ASE facilities use renewable energy, and 10 sites have achieved RE100 certification. |
Note: Management score represents a company's ability to manage/benefit from certain ESG topics. The scores range from 1 to 3, with 1 being the strongest.
Update Date: 5 Feb 2026
Source: Daiwa, Company