CLSA lifted its target price for ASM Pacific Technology (00522) to HK$87 from HK$84 and upgraded its rating from "sell" to "underperform" following its underperforming HSI by 12% year-to-date.
As a late-cycle play, ASM's booking is expected to continue to recover in 4Q 2020-1Q 2021 with improving OSAT loading and auto/industrial/smartphone recovery, but the potential share outperformance windows can be short-lived, the research house said.
In addition, given the high base in 1H and CLSA's view for a cyclical peak in 2Q 2021, ASM's backlog may face deceleration, which could weigh on share performance based on the historical pattern.