Chip equipment maker ASM sees first-quarter orders exceeding fourth

ASM Pacific Technology, the world's largest maker of semiconductor assembly equipment by sales, said on Wednesday that backlog orders in the first quarter will likely exceed the robust growth seen late last year.
ASM, which on Tuesday posted sharply higher full-year profit, said new orders in the first two months of this year remained healthy, shaking off investor concerns that its surprisingly good fourth quarter sales might not be sustainable.
"So far, we see the first quarter is likely to finish higher (in terms of backlog orders) than the December quarter," Managing Director Patrick Lam told a news briefing on the firm's results.
He did not provide figures on the number of new orders.
ASM, which is 54 percent owned by Dutch semiconductor equipment maker ASM International, said on Tuesday its net profit for the year ended December leapt 88 percent to HK $535.87 million from a year earlier, thanks to strong fourth-quarter orders.
ASM's order backlog grew 240 percent to US $119 million at the end of 2003 from a year earlier and helped it post a full-year profit that beat the consensus forecast by almost HK $90 million.
The surge in profits was ignored by investors, however, as the firm's shares fell 4.53 percent to HK $35.80 on Wednesday. The stock has lost 2.84 percent in the past month but gained almost 30 percent over the past three months.
Analysts at several major brokerages, including UBS and ING Financial Markets, said they would revise their earnings estimates on the firm in view of the strong results.
Citing industry estimates, CLSA said sales of assembly and packaging equipment sales are expected to rise 40 percent and 19 percent in 2004-05, respectively.
"With the increasing industry recognition of its quality equipment, ASM should continue to gain share to outperform the industry growth," CLSA analyst Kenny Lau said in a research note on Wednesday.
Cazenove, which has a 'hold' recommendation on ASM, said the stock could touch HK $38.90 while BOC International initiated coverage on the stock with an 'outperform' rating and a 12-month price target of HK $50.