UBS has released a research report stating that due to improved growth visibility in its thermal compression bonding (TCB) business, it has raised its profit forecasts for ASMPT (00522) by 3% and 4% for this year and next, respectively. The bank has also extended its valuation base to 2027, and based on a forecast price-to-earnings ratio of 24 times, it has increased the target price from HK$95 to HK$135, maintaining a "Buy" rating. ASMPT announced it is evaluating strategic options for its Surface Mount Technology (SMT) business, which could potentially involve a sale, joint venture, spin-off, or public listing. UBS views this move positively, as it would allow the company to focus on semiconductors and advanced packaging, thereby streamlining operations and resource allocation. The SMT business traditionally has lower profit margins and technical barriers and operates on a different industry cycle than the semiconductor sector. If ASMPT opts for a spin-off or divestment, its profit margins and earnings are expected to see a structural improvement due to opportunities in the advanced packaging business, potentially leading to a re-rating of its valuation. The stock is currently trading at a forecast 2027 price-to-earnings ratio of 18 times, which is below its international peers.