Investment Rating - The report does not explicitly state an investment rating for the company Core Insights - The company reported a revenue of NT$140.238 billion for Q2 2024, representing a year-over-year increase of 3% and a quarter-over-quarter increase of 6% [3][4] - Gross margin for Q2 2024 was 16.4%, up 0.4 percentage points year-over-year and 0.7 percentage points quarter-over-quarter [3][4] - Operating profit margin was 6.4%, showing a decrease of 0.5 percentage points year-over-year but an increase of 0.7 percentage points quarter-over-quarter [3][4] - The company expects revenue growth in its ATM business for Q3 2024 to be in the high single-digit percentage range compared to Q2 2024 [12][13] - The advanced packaging market is experiencing robust growth, and the company is increasing capacity to meet rising demand, although the overall market recovery is slower than anticipated [12][14] Summary by Sections Overall Performance - Q2 2024 revenue reached NT$1402.38 billion, with a gross margin of 16.4% and an operating profit margin of 6.4% [3][4] - The continuous improvement in gross margin is attributed to the depreciation of the New Taiwan Dollar and changes in product mix within ATM and EMS businesses [3][4] Revenue Breakdown - ATM Business: Revenue of NT$778 billion in Q2 2024, with a gross margin of 22.1% and an operating profit margin of 9.3% [7][10] - EMS Business: Revenue of NT$629 billion in Q2 2024, with a gross margin of 9.6% and an operating profit margin of 3.1% [10][11] Capital Expenditure - Total capital expenditure for Q2 2024 was US$406 million, with allocations of US$215 million for packaging, US$154 million for testing, US$31 million for EMS, and US$6 million for interconnect materials and other businesses [6][10] Company Guidance - The company anticipates that the ATM business will see revenue growth of 15% to 20% in Q3 2024 compared to Q2 2024, with operating profit margins slightly above 3.5% [12][13] Demand Outlook - The advanced packaging market is thriving, and the company is working to expand capacity to meet increasing demand, particularly in the smartphone sector, which is expected to see a positive trend in Q3 and Q4 2024 [12][25]

Financial Data and Key Metrics Changes - For Q2 2024, the company reported fully diluted EPS of NTD 1.75 and basic EPS of NTD 1.80, with consolidated net revenues increasing by 6% sequentially and 3% year-over-year [6][9] - Gross profit was NTD 23.1 billion, with a gross margin of 16.4%, improving by 0.7 percentage points sequentially and 0.4 percentage points year-over-year [6][9] - Operating profit was NTD 9 billion, up NTD 1.5 billion sequentially but down NTD 0.4 billion year-over-year, with an operating margin of 7.3% [8][10] Business Line Data and Key Metrics Changes - The ATM business reported revenues of NTD 77.8 billion, up 5% sequentially and 2% year-over-year, with a gross profit margin of 22.1% [11][12] - EMS revenues were NTD 62.9 billion, improving by 6% sequentially and 4% year-over-year, with a gross margin of 9.6% [15][16] Market Data and Key Metrics Changes - The communications application segment saw a 3 percentage point drop, while computing and consumer segments increased, indicating mixed demand across different markets [14] - The automotive products within the EMS business experienced decent growth on an annual basis, although overall sentiment in the automotive market remained soft [17][69] Company Strategy and Development Direction - The company is focusing on increasing investments in leading-edge products, particularly in labor and equipment, to meet rising demand [5][18] - There is an ongoing expansion in Malaysia, with Phase 1 completed and volume production expected to start in Q1 2025, alongside acquisitions in the Philippines and Korea [22][23] Management Comments on Operating Environment and Future Outlook - Management noted a bifurcated market with strong demand for leading-edge products, particularly in AI and high-performance computing, while traditional products are seeing cautious customer behavior [4][19] - The company anticipates a moderate growth outlook for the full year, with expectations for improved margins in the second half of the year [26][27] Other Important Information - The company plans to double its full-year 2024 consolidated machinery CapEx from last year's USD 914 million levels to meet booming demand for leading-edge ATM capacity [22] - The effective tax rate for the quarter was 19%, with net income for the quarter at NTD 7.8 billion, flat year-over-year [9][10] Q&A Session Summary Question: Guidance on ATM growth and gross margin expectations - Management indicated that the full-year growth for ATM is now expected to be more moderate due to a slower recovery in the general market, with third-quarter gross margin projected to be slightly lower than previously expected [26][27] Question: CapEx breakdown for advanced packaging - The CapEx breakdown is approximately 53% for assembly, 38% for testing, and the remainder for materials and EMS [27] Question: Competitive strategies in advanced packaging - The company is enhancing its leading-edge testing capacity and leveraging turnkey services to meet demand, with expectations for good progress starting next year [35] Question: Expansion plans in the US - The company is considering how to apply for R&D and manufacturing funding under the CHIPS Act, with no tangible plans for high-volume manufacturing in the US yet [49] Question: Advanced packaging revenue contribution - The company expects leading-edge revenue to double this year, contributing over NTD 250 million, with a target of around 5% of ATM business revenue [66][67] Question: Automotive market outlook - The automotive segment is expected to represent roughly 11% of overall sales, with continued growth anticipated despite a soft overall market sentiment [69]

Core Viewpoint - ASE Technology Holding Co., Ltd. reported a 2Q24 net revenue of NT$140,238 million, reflecting a year-over-year increase of 2.9% and a sequential increase of 5.6, with net income attributable to shareholders reaching NT$7,783 million, up from NT$5,682 million in 1Q24 [1][2]. Financial Performance - Net revenues from packaging operations, testing operations, EMS operations, and others accounted for approximately 45%, 9%, 45%, and 1% of total net revenues in 2Q24, respectively [2]. - Cost of revenues for the quarter was NT$117,172 million, with raw material costs at NT$70,387 million (50% of total revenues) and labor costs at NT$15,673 million (11% of total revenues) [2]. - Gross margin improved to 16.4% in 2Q24 from 15.7% in 1Q24, while operating margin increased to 6.4% from 5.7% in the previous quarter [2]. - Basic earnings per share for 2Q24 were NT$1.80 (US$0.112 per ADS), consistent with 2Q23 and up from NT$1.32 in 1Q24 [1][2]. ATM Operations - ATM net revenues were NT$77,813 million for the quarter, up 2.2% year-over-year and 5.3% sequentially [3]. - Gross margin for ATM operations increased to 22.1% in 2Q24 from 21.0% in 1Q24, with an operating margin of 9.3% compared to 8.2% in the previous quarter [3]. EMS Operations - EMS net revenues reached NT$62,907 million, reflecting a 4.1% year-over-year increase and a 6.0% sequential increase [4]. - Cost of revenues for EMS was NT$56,870 million, with raw material costs at NT$49,075 million (78% of total revenues) and labor costs at NT$3,121 million (5% of total revenues) [5]. Liquidity and Capital Resources - Capital expenditures in 2Q24 totaled US$406 million, with significant allocations to packaging (US$215 million) and testing operations (US$154 million) [6]. - The current ratio was 1.17 and the net debt to equity ratio was 0.34 as of June 30, 2024 [6]. Customer Concentration - The five largest customers accounted for approximately 45% of total net revenues in 2Q24, with the top 10 customers contributing 60% [7]. - In EMS, the five largest customers represented about 67% of total net revenues, with the top 10 contributing 74% [8].

Core Viewpoint - ASE Technology Holding Co. Ltd. is a leading semiconductor manufacturing company that has not yet seen significant benefits from the AI boom, as the industry normalizes after a pandemic-induced inventory glut [1][2]. Financial Performance - ASE Technology reported Q1 2024 EPS of 4 cents, matching consensus estimates, with revenues of $4.28 billion, a 9.5% year-over-year decline but above the $4.25 billion consensus [4]. - Gross margin was 51.5%, while net income stood at $178 million, and operating margin decreased to 5.1% from 7.4% in Q4 2023 [4]. - The ATM segment saw revenues rise 0.8% year-over-year to $7.39 billion but fell 9.9% sequentially, with raw material costs at 27% of total net revenues [5]. - The EMS segment's revenues increased 2.8% year-over-year to $5.94 billion but dropped 25% sequentially, with raw material costs representing 79% of total net revenues [6]. Guidance and Outlook - ASE Technology issued downside revenue guidance for Q2 2024, estimating revenues between $7.44 billion and $8.11 billion, below the $8.41 billion consensus [7]. - The company reaffirmed its full-year 2024 revenue guidance at $30 billion, slightly above the $29.97 billion consensus [7]. - The head of investor relations indicated that demand for EMS services is slightly ahead of expectations, driven by improving customer inventory levels [8]. Market Position and Customer Base - ASE Technology is the world's largest chip assembler, employing 91,000 people and serving major clients like Apple, NVIDIA, and Qualcomm [1][2]. - The top 10 customers contributed 61% of total net revenues in the ATM segment, up from 58% in Q4 2023, indicating a concentration of revenue among key clients [5]. - In the EMS segment, the top 10 customers accounted for 75% of total net revenues, down from 79% in the previous quarter [6].

Company Expansion - USI officially opened its new Tonala Site in Mexico on July 16, 2024, with a significant investment of nearly 82 million USD, creating 3,000 new jobs in the region [1] - The Tonala Site is part of USI's strategic expansion in North America, enhancing service capabilities to meet client needs in a dynamic market [1] - The facility aims to foster innovation, quality, and community engagement, aligning with USI's commitment to economic development in the region [1] Sustainability Initiatives - USI prioritizes Sustainable Development Goals through four core strategies: Low Carbon, Circular, Collaborative, and Inclusive, with a focus on responsible business practices [1] - The Guadalajara factory achieved a 100% Green Electricity Ratio in 2023, and this sustainability program will extend to the Tonala factory [1] Regional Impact - The opening of the Tonala Site is seen as a long-term investment in Jalisco, contributing to the state's vision of innovation and high technology [1] - Local officials emphasize the importance of this investment for the municipality of Tonala, which is experiencing significant growth and development [1]

Core Viewpoint - The article emphasizes the importance of value investing, highlighting ASE Technology (ASX) as a strong candidate for value investors due to its favorable valuation metrics and earnings outlook [1][2][3] Group 1: Value Investing Strategy - Value investing focuses on identifying companies that are undervalued by the market, utilizing fundamental analysis and traditional valuation metrics [1] - The Zacks Rank system and Style Scores are tools that help investors find stocks with specific traits, particularly in the "Value" category [2] Group 2: ASE Technology (ASX) Metrics - ASE Technology has a Zacks Rank of 2 (Buy) and an A grade for Value, indicating strong potential for value investors [2] - The stock's P/E ratio is 16.16, significantly lower than the industry's average of 36.84, suggesting it may be undervalued [2] - The Forward P/E for ASX has ranged from 10.10 to 21.39 over the last 12 months, with a median of 13.22, further supporting its undervaluation [2] - The P/S ratio for ASX is 1.39, compared to the industry's average P/S of 3.88, reinforcing the notion that ASX is likely undervalued [2][3] Group 3: Earnings Outlook - The strength of ASE Technology's earnings outlook contributes to its appeal as a value stock, indicating potential for future growth [3]

Here at Zacks, we focus on our proven ranking system, which places an emphasis on earnings estimates and estimate revisions, to find winning stocks. But we also understand that investors develop their own strategies, so we are constantly looking at the latest trends in value, growth, and momentum to find strong companies for our readers.Looking at the history of these trends, perhaps none is more beloved than value investing. This strategy simply looks to identify companies that are being undervalued by the ...

TAIPEI, June 11, 2024 /PRNewswire/ -- ASE Technology Holding Co., Ltd. (NYSE: ASX, TAIEX: 3711, "ASEH" or the "Company"), announces its unaudited consolidated net revenues for May 2024.CONSOLIDATED NET REVENUES (UNAUDITED) May Apr May Sequential YoY (NT$ Million) 2024 2024 2023 Change Change Net Revenues 47,493 45,820 46,239 +3.7 % +2.7 % <td colspan="1" nowrap rowspan= ...

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ASE Technology Holding Co., Ltd. (NYSE:ASX) Q1 2024 Earnings Conference Call April 25, 2024 3:00 AM ET Company Participants Ken Hsiang - Head, Investor Relations Joseph Tung - Chief Financial Officer Conference Call Participants Gokul Hariharan - JPMorgan Charlie Chan - Morgan Stanley Brad Lin - Bank of America Randy Abrams - UBS Rick Hsu - Daiwa Securities Bruce Lu - Goldman Sachs Laura Chen - Citigroup Jason Chen - CLSA Ken Hsiang Hello. I am Ken Hsiang, the Head of Investor Relations for ASE Technology H ...