BE Semiconductor Stock Declines as HSBC Identifies Downside Risk

Shares of BE Semiconductor Industries (BESI) experienced a decline on Monday after analysts at HSBC expressed concerns about potential downside risks, initiating a “reduce” rating on the stock with a target price of €95. This represents a possible 15.3% decrease from its previous price of €112.15 as of September 18.

At 6:53 a.m. (1053 GMT), BE Semiconductor was trading 3.2% lower at €108.05.

HSBC’s cautious outlook is primarily focused on growth expectations for BESI, especially in relation to demand for its hybrid bonding tools, which are essential for the company’s future growth in semiconductor assembly equipment.

Although BESI holds a strong position in the semiconductor assembly market—particularly in hybrid bonding technology, which is vital for advanced semiconductor packaging—HSBC’s proprietary model indicates that demand for these tools may not meet expectations. Analysts predict that the demand will only reach around 150 tools by 2026 and 480 tools by 2030, significantly lower than the company’s target of 900-2,000 tools by 2030. This difference raises concerns about potential underperformance compared to market expectations.

Furthermore, HSBC highlighted worries regarding BESI’s non-hybrid bonding segments, which serve sectors such as automotive and mobile, making up 59% of the company’s revenue for 2023. With uncertainty surrounding demand recovery in these markets, HSBC anticipates more modest revenue growth from these segments than initially expected.

HSBC’s forecasts for BESI’s financial performance in 2025 are also lower than the prevailing market consensus. While consensus estimates project BESI’s 2025 revenue to be €929 million, HSBC predicts it will be approximately €779 million, indicating a 16% discrepancy. Additionally, the brokerage expects BESI’s net income for the same period to be 23% lower than consensus estimates.

As a result of these factors, HSBC has established a target price of €95 for BESI, signaling a downside risk of 15.3%, based on a valuation of 27 times projected earnings for FY26, which aligns with the stock’s historical average price-to-earnings multiple.