CGS International Securities (Thailand) (CGSI) has reiterated its ‘Add’ recommendation for Hana Microelectronics Public Company Limited (SET: HANA), lifting its target price to THB 25 per share on optimism for the company’s underlying performance and improved outlook for the second half of 2025.
Despite reporting a THB 35 million net loss for the second quarter—primarily due to THB 116 million in foreign exchange losses—Hana’s core earnings surpassed expectations. Stripping out one-off items, core net profit reached THB 153 million, 13% above CGSI’s and Bloomberg consensus forecasts.
This was driven by stronger-than-anticipated sales and margins in the key integrated circuit (IC) packaging business, which saw revenues rise 13% quarter-on-quarter even as U.S. tariff disruptions weighed on performance.
The IC packaging segment’s better capacity utilization pushed segment margins up to 1%, defying projections for a drop into negative territory. Meanwhile, sales in the printed circuit board assembly (PCBA) segment met expectations, totaling THB 3.28 billion.
Hana’s South Korean subsidiary, Powermaster, continued to weigh on overall results, with estimated losses deepening to THB 228 million in the second quarter as sales slumped 43% quarter-on-quarter. However, CGSI expects these losses to narrow as Hana completes its facility transition in the second half of the year.
Recent earnings calls from leading electronics manufacturers point to a gradual recovery in sector demand for the third quarter. Companies like Texas Instruments, Onsemi, and Infineon have forecast sequential sales growth in the second half of 2025, citing steady automotive and industrial demand and healthier inventories.
CGSI notes that while it may be early to call a full cyclical rebound, these signals suggest an improving outlook for backend semiconductor firms like Hana. The company’s sales are expected to climb roughly 10% in 2H25 compared to the first, fueling an estimated 61% rebound in core EPS.
While the analyst has trimmed its 2025-2027 core earnings forecasts by 8–13% to reflect ongoing cost pressures and persistent losses at Powermaster, Hana’s robust net cash position—approximately THB 10 billion as of end-June, or about 50% of market capitalization—is seen as a strong valuation downside buffer.
Notably, the brokerage firm sees narrowing Powermaster losses as a near-term re-rating catalyst, while downside risks remain from global trade uncertainties and the potential for deeper subsidiary losses.
