(New: latest reaction from UBS, price updated.)

FRANKFURT (dpa-AFX) - Semiconductor supplier Suss Microtec countered recent market concerns about a possible slowdown in business with surprisingly strong key figures for 2024. The share price jumped by almost 36 percent at the start of trading on Friday morning. In the afternoon, the shares were still leading the small-cap index SDax, up a good 18 percent at 48.40 euros.

The share price had reached a record high of just over €71 in October. After that, things went downhill. An attempt at stabilization at the beginning of the year was thwarted by a study by the major Swiss bank UBS, which put fresh pressure on the share price. As a result, the share price fell below the 39-euro mark by mid-January, reaching its lowest level since April 2024.

Despite its focus on rapidly growing industry segments in 2025, Suss is vulnerable to headwinds, argued UBS analyst Madeleine Jenkins, who rated the shares a "sell" with a price target of €40.30. The strong growth of the Advanced Backend Solutions division in 2024 is expected to normalize in 2025. And in the second division, Photomask Solutions, demand is also expected to slow after a strong 2024.

After the surprisingly released key data on Thursday, Jenkins admitted that Suss had a strong year in 2024, but warned against simply extrapolating the order trend into the future. The high in the current cycle may have been reached. In China, the high demand is already slowly declining, although the extent is still difficult to predict for the coming months.

All in all, the expert raised her earnings expectations for 2025 slightly, but lowered them for the coming year. This is likely to be affected by a slower development than previously thought. Against this backdrop, she reduced her price target to EUR 39.10, while leaving her "sell" rating unchanged.

Nevertheless, investors on the stock market initially became more optimistic on Thursday; Suss was able to somewhat dampen demand concerns. According to a statement on Thursday evening, the company significantly exceeded its own targets in 2024. Revenues are expected to be 445 million euros, compared to a target of 380 to 410 million euros. The margin based on earnings before interest and taxes (EBIT) was around 17.5 percent, according to the key figures.

The focus is also on demand. Incoming orders in the fourth quarter in both segments increased significantly compared to the previous quarters, the company said. Based on the preliminary figures, it amounted to 147 million euros, of which 102 million was attributable to Advanced Backend Solutions and 45 million to Photomask Solutions. Overall, customers placed orders worth 423 million euros in 2024.

The margin and order intake for the fourth quarter formally crushed the targets, wrote analyst Tim Wunderlich of Hauck Aufhäuser Investment Banking in an initial assessment. In view of the strong business performance, investors are likely to wonder whether Suss can remain on a growth trajectory in 2025. He expressed confidence, although growth is likely to slow given the high prior-year figures.

The high order backlog at the end of 2024 and the orders expected for the first half of 2025, which should largely be converted into sales in the current year, according to Wunderlich, speak for optimism. In addition, tech companies continue to invest heavily in their AI capabilities, which benefits Suss. He also expects the shares to continue to rise and sets a target of 72.10 euros.

Veysel Taze from Bankhaus Metzler is also optimistic. Artificial intelligence (AI) and advanced packaging remain growth drivers. In addition, there are promising "technology bets" such as hybrid bonding, which are not yet contributing to sales. In the medium term, Taze is even more confident than Wunderlich, with a price target of 89 euros.

According to Suss, hybrid bonding is a key technology for stacking several microchips – a process known as 3D integration. This not only increases the functionality of each individual chip, but also significantly boosts performance.

If the analysts at Hauck Aufhäuser and Metzler are right, Suss could build on the strong performance of the past two years. In 2023, it was the third-best SDax performer with a price gain of 83 percent; in 2024, an increase of almost 76 percent was enough for second place./mis/men/jha/zb