Q3 23: order book now includes GAA pilot orders

ASMI published consensus-beating Q3 figures, with the strong order intake due to partial booking of GAA pilot orders in the Q3 stealing the spotlight. The company guided for €600-640m in revenue in the Q4 and re-iterated the FY23 guidance, but also warned that it still sees weakness in its end-markets, with the power/analog market, which has held up well so far, now also showing signs of a slowdown.

What to expect from the 2023 CMD?

During its 2021 CMD, ASMI guided for €2.8-3.4bn revenues accompanied by 46-50% gross margin and 26-31% operating margin by FY25. We believe that the company might update its top-line target while leaving the target for the margin unchanged, supported by the structural transition to GAA transistor architecture which has higher ALD (>55% market share) and epitaxy (>30% market share) intensity, and integration of the promising LPE business which expanded its SiC epitaxy market exposure.

Q2 23: order intake to increase from here on

ASMI published Q2 figures below our expectations. Revenue was up 21% yoy, but the order intake declined by 48% yoy due to the ongoing softness in the end-market and push-outs in leading-edge logic/foundry. Despite these challenges, the company reaffirmed its H2 guidance and asserted that the Q2 order intake will represent the low point. ASMI’s SiC Epi business is progressing as planned, and the company anticipates the inclusion of the first GAA pilot orders in the order book from Q4 2023.

Q1 23: inflection point reached in share price rally?

ASMI published Q1 figures beating the market consensus. Revenue was up 37% led by foundry sales, with memory as the weakest end market. The gross margin increased by 370bps due to the applications mix within ALD sales, and an increased contribution from China. However, the share price plummeted by 8% since the guidance was lower than had been expected due to continued weakness in the memory market, accompanied by a softening advance logic market due to capex and production cuts by customers.

Q1 results beat market expectations, but weak outlook given

ASM International published stronger than expected results, beating both our and the market’s expectations. However, we expect the market to react negatively since the management has given a weaker than expected guidance for FY23.

FY22: outlook depends on memory demand recovery

ASMI has again delivered strong results, showing its 8th consecutive quarter of sales growth. The gross margin was slightly below our and the market’s expectations due to the product mix but net earnings beat our estimate. The company gave conservative guidance for FY23, particularly for the second half, due to uncertainty regarding the memory demand recovery. Based on this announcement, we will upgrade our FY22 estimates and lower our FY23 estimates, resulting in only a slight improvement to o

Q3-22: surprisingly dependent on China

ASMI has again delivered strong results, showing its 8th consecutive quarterly sales growth. The margins were also very satisfactory and beat the market expectations. However, ASMI has shed more light on the impact of the recent US restrictions. We will have to await the next quarter for ASMI to shed some more light on the impacts of these restrictions, but the first indications from the company are worrying.

Q2 22: unreal order intake

ASMI has restored confidence in the market. The surge in order intake testifies the never-ending lack of deposition machines to satisfy the ramp-up of leading-edge nodes. The supply chain is the largest headwind that ASMI is facing, resulting in lead times for machine deliveries increasing. The rise in opex has also led to slightly disappointing profitability figures. Nevertheless, the feared decrease in demand linked to softer consumer electronics perspectives is now unjustified, and ASMI is we

ASMI acquires Epitaxy on SiC tool specialist

ASM International has announced the acquisition of the Italian SiC (Silicon Carbide) Epitaxy tool specialist LPE for €425m. The Italian specialist provides tools for SiC which is one of the largest growth markets in power semiconductors, as it is encountering increasing traction in the Auto industry.

Q1 22: Record bookings testify to insatiable demand

ASMI has reported a strong set of results with a bright outlook despite supply chain tensions. The growth drivers are still present and the mid-term growth prospects remain intact. The second floor of Singapore is ramping up, allowing for a massive increase in production. We remain confident that the FY25 CMD guidance is conservative and will have to be adjusted upwards.

Q4 21: grumpy market is unimpressed by record quarter

Once again, ASMI produced a record quarter to close the year. Profitability was impacted negatively by the tight supply-chain environment and a high opex, which was a disappointment for the market. However, the highly optimistic outlook should restore confidence on the stock, that has suffered a sharp 35% decline from its peak in November 2021. The fundamentals have never been so solid.

Q3 21: record results and more to come

ASM International has published record sales for its Q3, slightly above the higher end of its guidance. It does not seem to be affected by the supply-chain difficulties that are ubiquitous in the current economic environment. Its Q4 guidance is well above expectations, and the impressive order intake suggests that demand is far from over.

The Dutch growth machine

ASMI presented its new strategy during its Capital Markets Day on 28 September. Its impressive growth is expected to continue until 2025 at a sales CAGR of 16-21% until 2025, largely beating the WFE market growth, mainly driven by its star portfolio of products in both ALD and Epitaxy.

Q2 21: record quarterly sales for ASM International

ASMI published yet again very positive results. The Q2 21 benefits came in roughly in line with consensus, but the guidance for the coming quarters is clearly above the market’s expectations. We believe the recent drawback is only linked to profit taking, as on 1 July ASM International announced a better than anticipated order intake and, since then, the stock price increased by 14% at its peak.

Q1 21: where will it stop?

Impressive Q1 results indicate 2021 may be a strong year. Demand is high, and it has expanded its capacity through a plant in Singapore, allowing for future growth. The margins are also impressive, as they are closing the gap with ASML’s margins.

Renold - Strong end to FY24: EPS up 11%. Robust FY25: EPS up 27.6%

The FY24 year-end update is very upbeat signalling trading being materially ahead of expectations, with a better-than-expected profit out turn and stronger cash generation. It continues to strengthen margins through efficiencies and investment in modern equipment. The order book remains close to record levels providing a robust view of future forecasts. In FY24E we upgrade EPS by 11% and in FY25E a significant upgrade of 27.6%. It looks capable of declaring a dividend in FY25 as well as manageme

Q1 Operating Results

Another Good Year of Diversified Growth with More to Come in 2024 CCapital have released their Q1 operating results. Overall, revenue has come in slightly lower than expected at $80.2m vs TamE of $85.9m but is largely tracking in line with our FY24 annual estimate and we note the company has maintained guidance. Drilling revenue for this quarter was impacted by a fall in utilisaztion rates as well as general remobilisation geographically but we expect a strong recovery throughout the year as k

Billington Holdings - Record result boosts dividend; forecasts upgraded

FY23 results show very strong growth over FY22, driven by strong Structural Steel activity, with results slightly ahead of upgraded profit expectations, while stronger than expected cash flow resulted in an unexpectedly generous dividend of 33p (offering a FY23 yield of 7.0%). The group now has net cash of £22.1m and is debt free and is therefore in a strong position for potential M&A activity. Following the recent £90m of new orders to increase the order book to record levels we conservatively

Morning Note – 16 April 2024

Plant Health Care - China distribution with AMVAC

Plant Health Care announced it has signed a distribution agreement with AMVAC, an American Vanguard Company, to support commercialisation of novel fertiliser products incorporating Plant Health Care's Harpinαβ in China starting in 2024. The novel product combines Harpinαβ technology with an AMVAC fertiliser and is expected to help growers improve crop quality and yield as part of an integrated and environmentally responsible crop production programme. AMVAC continues to evaluate Plant Health Car

Morning Note – 15 April 2024

discoverIE - Back to organic growth

discoverIE’s March year-end update confirms a strong operational performance in challenging markets. Following two years when sales increased by +48%, FY 2024 Group sales were +1% ahead of 2023 at CER (reported -3%) driven by a +2% contribution from acquisitions and organic -1%. As expected, organic growth returned in the later part of the year (Q4 +2%, +11% sequentially) and the order book has reverted to normalised levels of c.4.5 months’ sales, which – combined with a continuing strong pipeli

Severfield - Multiple positives should excite investors

Severfield’s trading update indicates that FY23 results are expected to slightly exceed market expectations and the company ends the year with a record UK and Europe order book. Furthermore, with a positive trading outlook and net debt coming in lower than expected, Severfield has announced a £10m share buyback, highlighting the cash-generative nature of the company and management’s confidence in its position. The stock trades on an FY25 P/E of less than 6x and yields 7%, which we believe appear

Warns on brine supply costs

SP Angel . Morning View . Copper prices hold higher as China processing fees fall below $0/t amid low feedstock availability

PROGRESSIVE: Severfield: Targeted acquisition strategy aids growth path

Acquisitions have been an important element of Severfield management’s growth strategy, with the aim of adding new products, sectors and regions to what we have identified as exciting long-term organic opportunities. In this Spotlight report, we focus on the group’s targeted M&A approach, highlighting three significant deals.

Hardman & Co Insight: 2023 was an annus horribilis for Quoted UK Infrastructure and Renewable Energy

The focus of Hardman & Co Research is on the nine quoted Infrastructure Investment Companies (IICs) and on the 22 Renewable Energy Infrastructure Funds (REIFs): the stocks analysed are all members of the Association of Investment Companies (AIC). We are updating our publication of January 2023, assessing both the lacklustre share price performances during 2023 and the key issues, including interest rates, inflation and power prices. As a 31-strong group, its combined market capitalisation is no

LIBERUM: Severfield: Erratum: Better EPS and cashflow, and buyback

Invinity Energy Systems - Update on Strategic Investment

Invinity’s update on discussions with strategic investors reveals interest from multiple parties. While this has slightly delayed finalising an agreement it increases the potential for a better outcome. Although details are unknown at this stage, we think there is enough in the statement to be comfortable that any agreements will be consistent with the company’s strategy of growing market share in core markets and using a licencing and royalty model in other markets.

Clean and competitive fertiliser