Biwin Storage plans 4.5 billion yuan investment in third-phase wafer-level advanced packaging and testing project

Yuanta Securities (Thailand) has maintained its Buy rating on Stars Microelectronics (Thailand), or SMT, and raised its end-2570 target price to 8.40 baht per share from 7.60 baht, based on a PER of 25 times, after lifting its 2570 profit forecast on the back of strength in the Optical business. The stock price as of September 30, 2569 stood at 6.05 baht, implying 38.8% upside to the target price. Yuanta's research team expects SMT to post normalized profit of 56 million baht in the third quarter of 2569, up 65% QoQ and a turnaround from a loss of 49 million baht in the third quarter of 2568. If achieved, this would mark a second consecutive quarter of normalized profit following eight straight quarters of losses, and is expected to be the highest profit in three years. Sales revenue in the third quarter of 2569 is expected at 780 million baht, up 10% QoQ and 41% YoY, driven by a recovery in the IC Packaging, PCBA & Box Build, and Optical businesses. Gross margin is expected to rise to 14.6% from 13.0% in the second quarter of 2569 and 1.4% in the third quarter of 2568. SG&A is expected at 69 million baht, flat QoQ and up 11.3% YoY. For the fourth quarter of 2569, the research team expects normalized profit to continue rising both QoQ and YoY on strong orders, particularly in the Optical business, where production for global customers is expected to ramp up gradually. Yuanta maintained its 2569 normalized profit forecast at 150 million baht, a turnaround from a loss of 146 million baht in 2568, and raised its 2570 normalized profit forecast to 282 million baht, up 88% YoY, or an average of about 70 million baht per quarter, from what it said was previously an overly conservative estimate. It expects revenue of 2.67 billion baht in 2569 and 3.204 billion baht in 2570, with EBITDA of 359 million baht and 510 million baht respectively. Core EPS in 2570 is put at 0.34 baht, up 88.1%. Yuanta noted that SMT's valuation remains a laggard, with the stock trading at a 2570 PER of about 18 times, while leading stocks in the sector trade in a range of 27 to 64 times. However, SMT's key risks are its high reliance on a single major customer and volatility tied to the industry cycle.