First-half surge in demand boosts ASM Pacific

PUBLISHED : Friday, 09 March, 2007, 12:00am
UPDATED : Friday, 09 March, 2007, 12:00am

ASM Pacific Technology, the world's largest supplier for semiconductor assembly equipment, said last year's net profit grew 35 per cent, boosted by strong first-half demand from mainland manufacturers of electronics such as flat-panel displays, MP3 players and digital cameras.

But the company said its earnings were flat in the second half of the year.

For the year through December, net income climbed to HK$1.15 billion from HK$850.5 million a year earlier, on sales that gained 29 percent to HK$4.56 billion, the company said in a statement to the Hong Kong stock exchange yesterday.

But in the second half, net profit fell 0.5 per cent to HK$524 million from the same period a year earlier, caused by a weak global demand for semiconductors but still beating the market expectations.

Lee Wai-kwong, ASM Pacific's chief executive, expects overall demand this year and next to continue to increase. 'The semiconductor industry is forecast to grow by another 9 per cent to 11 per cent in 2007. Similar growth is projected for 2008,' Mr Lee said.

Warren Lau, an analyst at Macquarie Research who rated ASM Pacific a 'buy', previously expected the company's sales would drop 5 per cent in 2007 but may upgrade this forecast due to the latest results. 'SM Pacific's second-half net profit was 1.4 per cent higher than our previous forecast,' Mr Lau said. 'And the sales were also better than expected despite the semiconductor industry not doing so good.'

Last year's revenue from equipment rose 25 per cent to HK$3.58 billion while revenue from leadframe, a common type of chip package, grew 45 per cent to HK$974 million.

The company, in which the Netherlands' ASM International owns 53 per cent, proposed a final dividend of HK$1 per share and a special dividend of 20 HK cents per share, taking its full-year payout to HK$2.65 compared with HK$2 per share in 2005. The dividend payout ratio was about 89 per cent of the company's profit for 2006.

The company still had HK$915 million cash on hand at the end of 2006. The stock fell 1.24 per cent to close at HK$47.90 yesterday.