Suess Microtec AG rose the most in four months after Berenberg Bank said the microelectronics industry supplier’s lithography unit will be the company’s main profit-growth driver and recommended clients to buy the stock.
Suess gained as much as 7.7 percent, the biggest intraday increase since March 28, and was trading up 1.6 percent to 7.85 euros at 5:02 p.m. in Frankfurt, valuing the Garching, Germany-based company at 150 million euros ($199 million). Trading volume was 2 1/2 times the three-month daily average.
Lithography, used in packaging of semiconductors, accounted for 69 percent of 2012 sales of 164 million euros at Suess, Berenberg said, and the entire pretax income last year. The remainder of sales came from substrate bonder and photomask equipment, which are also used in the microelectronics manufacturing.
“Lithography, the bread and butter business, will continue to generate revenues, while bonder and photomasks have the potential to become the future darlings,” Tammy Qiu, a London-based analyst at Berenberg, said by telephone.
Qiu said she observed a recovery in the front end of the semiconductor industry in the first quarter and initiated Suess with a buy recommendation and a price estimate of 9.40 euros as the manufacturer is at the “back end” of the semiconductor fabrication process, and order recovery will normally be delayed by three to six months.
“The profitability of the lithography division is likely to improve in the coming quarters as the top line recovers from the 2012 trough,” she said in a note to investors.