Malaysian Pacific Industries Bhd. · MYX:MPI
Malaysian Pacific Industries Bhd — Q1 FY2024 Earnings Presentation
62 slides from Malaysian Pacific Industries Bhd's earnings presentation, November 2023
Slide 1: Malaysian Pacific Industries Berhad Investor Presentation Q1 FY2024
1 M A L A Y S I A N P A C I F I C I N D U S T R I E S B E R H A D I N V E S T O R P R E S E N T A T I O N Q 1 F Y 2 0 2 4 ( J u l - S e p ‘ 2 3 ) INVESTOR RELATIONS CONTACT Rohit Kumar +605 5262333 extn 8497 rohitkumar@carsem.com Malaysian Pacific Industries Berhad
Slide 2: Disclaimer
2 DISCLAIMER Malaysian Pacific Industries (MPI) provides access to this presentation for general reference only. This presentation is strictly confidential solely intended for communicating financials and may not be reproduced or circulated without MPI’s prior consent. If you are the recipient of th
Slide 3: Table of Content
1 3 TABLE OF INTRODUCTION CONTENT 2 CORPORATE OVERVIEW 3 BUSINESS OVERVIEW 4 SUSTAINABILITY 5 GROWTH DRIVERS 6 FINANCIALS & SUMMARY
Slide 4: Business overview: MPI, a member of the Hong Leong Group
4 Business overview MPI – A MEMBER OF THE HONG LEONG GROUP Hong Leong Group and MPI • The Hong Leong Group was established over 50 years ago and is one of The Hong Leong Group the largest conglomerates in Asia One of the Largest Conglomerates in Malaysia • Carsem and Dynacraft are operating companie
Slide 5: Financial performance snapshot
5 Financial performance snapshot STRONG FUNDAMENTALS CREATE BUSINESS RESILIENCE IN TOUGH TIMES Revenue (RM million) PATAMI (%) 513 >100% Q1 FY24 vs. Q4 FY23 Net cash (RM million) CAPEX (RM million) 872 54 as of Q1 FY24 Q1 FY24 Note: FY24 = July 2023 – June 2024 Malaysian Pacific Industries Berhad
Slide 6: Business outlook
6 Business outlook • Economic headwinds (inflation and recessionary risks) persist leading to sluggish end consumer demand Semiconductor industry environment; growth has slowed • Semiconductor revenue expected to drop by 11% in 2023 (vs. 2022), and rebound by 17% in 2024 (Gartner); down • Elevated i
Slide 7: Table of Content
1 7 TABLE OF INTRODUCTION CONTENT 2 CORPORATE OVERVIEW 3 BUSINESS OVERVIEW 4 SUSTAINABILITY 5 GROWTH DRIVERS 6 FINANCIALS & SUMMARY
Slide 8: Journey & Capabilities
8 Our journey Carsem One of the most JOURNEY & CAPABILITIES trusted OSAT Power Management 5G 5G TEST partners globally - CuClip Technology for Cloud Server Farms RF – Smartphone Thin & Multi-Die MLP – Small & Thin Sensors TVS SiC tech X3 for Mobile Market Sensors Sensors for Automotive For RF & powe
Slide 9: Board of Directors
9 Board of Directors YBHG DATUK KWEK LENG SAN MANUEL ZARAUZA IR. DENNIS ONG LEE KHIAN CHAIRMAN; Non-Executive/ GROUP MANAGING DIRECTOR/ Non-Executive Director/ Independent Non-Independent Non-Independent • Appointed to BoD of MPI in Jul 1990, and as GMD of • Over 25 years of experience across variou
Slide 10: Management team
10 Management team MANY YEARS OF CONSOLIDATED EXPERIENCE IN THE INDUSTRY MANUEL ZARAUZA, GROUP MANAGING DIRECTOR, MPI Over 25 years of manufacturing sector experience; Previously with Siemens, Osram Opto Semiconductors, and Seoul Semiconductor PO LAU INDERJEET SINGH MURALITHARAN RAYMOND SHI CK LEE C
Slide 11: Table of Content
1 11 TABLE OF INTRODUCTION CONTENT 2 CORPORATE OVERVIEW 3 BUSINESS OVERVIEW 4 SUSTAINABILITY 5 GROWTH DRIVERS 6 FINANCIALS & SUMMARY
Slide 12: Supply chain & business model
12 Supply chain & business model CARSEM’S PACKAGING & TESTING SERVICES FORM A VITAL PART OF SEMICONDUCTOR VALUE CHAIN IC backend Boxing/ PCB manu- SMT SMT End Mask IC frontend production module/ System design IC Design facturing Assembly Assembly customer production production (Assembly & system (ba
Slide 13: Wide portfolio
13 Wide portfolio COMPREHENSIVE TURNKEY PACKAGING & TEST SERVICES ACROSS KEY APPLICATIONS Automotive System in Quad Flat Package MLP Small Outline IC Package (SiP) (QFP) Industrial Transient Voltage Power Management Consumer & MEMS & Sensors Copper Clip Flip Chip Suppressor (TVS) (SiC, GaN, GaN on C
Slide 14: Geographic footprint
14 Geographic footprint BROAD GEOGRAPHIC PRESENCE, SERVING A GLOBAL CUSTOMER BASE CARSEM NORTH AMERICA CARSEM EUROPE CARSEM S. KOREA CARSEM SUZHOU, CHINA CARSEM JAPAN CARSEM TAIWAN CARSEM IPOH, MALAYSIA DYNACRAFT INDUSTRIES, S-SITE, M-SITE PENANG, MALAYSIA LEGEND Manufacturing plants & Sales offices
Slide 15: Production facilities
15 Production facilities CARSEM MANUFACTURING SITES & BUSINESS UNITS Carsem (M-Site, Ipoh) • Floor Space: 436K sq. ft. (40,500 sq. m.) SOIC MICRO MSU • Workforce: 2,215 employees Automotive & Consumer • GM: Muralitharan Carsem (S-Site, Ipoh) • Floor Space: 640K sq. ft. (60,000 sq. m.) PMG MLP TEST •
Slide 16: Factory expansion plans at M-Site
16 Production facilities OUR FACTORY EXPANSION PLANS CONTINUE AT M-SITE Note: 1. Level 1 & 2 received CCC approval (Certificate of Completion and Compliance) 2. Level 3 & 4 are pending facilitisation Malaysian Pacific Industries Berhad
Slide 17: Construction of new factory at Suxiang, China
17 Production facilities DESPITE NEAR TERM CHALLENGES, CONSTRUCTION OF NEW FACTORY AT SUXIANG IN CHINA CONTINUES 2023-Apr 2023-May 2023-Jun 2023-Jul 2023-Aug Production expected to Foundation work Foundation work Scaffolding work L2 formwork L2 slab casting commence by 2025 Malaysian Pacific Industr
Slide 18: Investing at S-Site to strengthen capabilities
18 Production facilities INVESTING AT S-SITE TO STRENGTHEN CAPABILITIES FOR THE GROWING AUTOMOTIVE & INDUSTRIAL SEGMENTS 1 Equipment standardization Replacing current legacy handlers with newer high efficiency test handlers 2 One floor consolidation Expanding test floor to support the additional mac
Slide 19: Table of Content
1 19 TABLE OF INTRODUCTION CONTENT 2 CORPORATE OVERVIEW 3 BUSINESS OVERVIEW 4 SUSTAINABILITY 5 GROWTH DRIVERS 6 FINANCIALS & SUMMARY
Slide 20: Sustainability performance
20 Sustainability performance FOR THE SECOND SUCCESSIVE YEAR, MPI IS IN TOP QUARTILE FTSE4GOOD FOR FY23 AS WELL FY23 performance snapshot Malaysian Pacific Industries Berhad
Slide 21: Sustainability at MPI
21 Sustainability at MPI OUR APPROACH IS RESPONSIBLE & RESPONSIVE, DRIVEN BY 3 THEMES Malaysian Pacific Industries Berhad
Slide 22: UN Sustainable Development Goals
22 UN Sustainable Development Goals 6 PRIORITY SDGs MOST ALIGNED WITH OUR BUSINESS Safeguarding employee health & safety is a MPI makes a significant contribution top priority for MPI towards employment and economic growth MPI actively focuses on innovation, As a global employer, MPI strives to ensu
Slide 23: Environment
23 Environment IMPROVING PREPAREDNESS AND RECEIVING RECOGNITION Emergency response knowledge training Leakage chemicals handling Eye washing Malaysian Pacific Industries Berhad
Slide 24: Environment
24 Environment Joint venture with NGO and residents of Taman Meru in the Cuci Sungai Meru programme. Carsem has committed to making part of the Meru River to be monitored using the kit provided. Green Day celebration every first Friday of the month Malaysian Pacific Industries Berhad
Slide 25: Health & safety
25 Health & safety ORGANIZED FIRE DRILLS TO IMPROVE EMPLOYEE AWARENESS AND CAPACITY FOR EMERGENCY RESPONSE EMPLOYEE AWARENESS EMERGENCY PREPAREDNESS & RESPONSE Malaysian Pacific Industries Berhad
Slide 26: Health & safety
26 Health & safety EMPLOYEE AWARENESS EMERGENCY PREPAREDNESS & RESPONSE Successfully organized ESH Week 2023 with overwhelming involvement from internal and external parties such as DOE, DOSH, Bomba, MOH, SOCSO and PDRM Malaysian Pacific Industries Berhad
Slide 27: Training & education
27 Training & education TRAINING AND UPSKILLING IS AMONG OUR TOPMOST STRATEGIC PRIORITIES Online & offline training – IATF16949 internal auditor training, VDA 6.3 training, Kaizen competition, 8D methodology, Quality awareness training, Work injury prevention training, Legal training IATF16949 Inter
Slide 28: Training & education
28 Training & education TRAINING AND UPSKILLING IS AMONG OUR TOPMOST STRATEGIC PRIORITIES Online & offline training - OSH Training, Automotive Series Training, Engineer Core Competency – Acceptance Sampling, Expanding Six Sigma Toolbox Training Managing Hazardous Atmospheric Emergency Response Team
Slide 29: Training & Awareness
29 Training & Awareness Basic First Aid for Contractor Safety Briefing Supervisors & Line Leaders Evacuation exercise conducted for 6 sessions involve local authority (Bomba) Chemical Handling Training Gas Handler Training Malaysian Pacific Industries Berhad
Slide 30: Anti-bribery & anti-corruption
30 Anti-bribery & anti-corruption LEADING ETHICALLY & TRANSPARENTLY Certification for implementing Anti-Bribery Management Systems, complying with ISO 37001:2016. Operating Certifying authority Status subsidiaries Carsem M SIRIM QAS International Sdn. Bhd. Re-certified in FY23 Shanghai Ingeer Certif
Slide 31: Table of Content
1 31 TABLE OF INTRODUCTION CONTENT 2 CORPORATE OVERVIEW 3 BUSINESS OVERVIEW 4 SUSTAINABILITY 5 GROWTH DRIVERS 6 FINANCIALS & SUMMARY
Slide 32: Industry dynamics
32 Industry dynamics DESPITE SHORT-TERM CYCLICAL DOWNTURN, GLOBAL SEMICONDUCTOR MARKET’S LONG-TERM OUTLOOK IS STRONG While China is witnessing improvement in consumer Slower-than-expected demand recovery is leading to delay in demand, it is being countered by drastic demand drop in EU normalization
Slide 33: Industry dynamics: automotive semiconductor market
33 Industry dynamics AUTOMOTIVE SEMICONDUCTOR MARKET IS PROJECTED TO WITNESS A MASSIVE GROWTH IN COMING YEARS Compounded Growth of EV Silicon Carbide & Gallium Nitride 5G enabled driving assistance Advanced automotive sensors Source: Reuters, McKinsey Report Malaysian Pacific Industries Berhad
Slide 34: Growth strategy
34 Growth strategy OUR LONG TERM VISION IS TO BE THE LEADING OSAT FOR AUTOMOTIVE, DRIVEN BY 4 STRATEGY TENETS Sales Technology • Strategic sales across application & geography • Investing in SiC, MEMS sensors, GaN, 5G testing segments • Advanced packaging – inorganic options for • Sharp sales pipeli
Slide 35: Carsem's strong positioning in Automotive
35 Sales - Carsem’s strong positioning in Automotive CARSEM HAS MAJORITY AUTOMOTIVE PORTFOLIO WITH ALL FACTORIES EQUIPPED TO RIDE THE NEXT WAVE OF OPPORTUNITIES Silicon Carbide/Gallium Nitride Automotive MEMS Sensors 5G/6G Connectivity EV Focussed Automotive Packages S M SZ SX • Skilled manpower foc
Slide 36: Sales – Target segments to play in
36 Sales – Target segments to play in MPI MADE A STRATEGIC MOVE TOWARDS UPCOMING TECHNOLOGIES Continued investments in complex packaging technologies Customized sensors used for SiC adoption in EVs is gaining 5G technology has a bright future – it monitoring several data points – momentum – Experien
Slide 37: Sales – Revenue composition
37 Sales – Revenue composition AUTO REMAINS STRATEGIC – GROWN FROM ~29% IN FY18 TO 43% OF OUR SALES NOW AUTOMOTIVE CONSUMER & COMMUNICATIONS • 5G and IoT are unlocking multitude of use cases – smart cities, healthcare, etc. • Long term growth is driven by electrification, ADAS/ AD, safety, and conne
Slide 38: Sales – Pipeline
38 Sales – Pipeline HEALTHY PIPELINE BUT RECESSIONARY RISKS HAVE PUSHED PROJECTS TO FUTURE QUARTERS NEW PROJECT INTRODUCTIONS (#) • Carsem has a healthy order book with major projects coming from the Automotive segment • Pipeline is full but the recent wafer shortage & end customer demand drop/ post
Slide 39: Technology – Automotive segment
39 Technology – Automotive segment INNOVATING IN LINE WITH STRATEGY TO BE GLOBALLY PREFERRED OSAT PARTNER FOR AUTOMOTIVE Major trends impacting semiconductor demand (Mobility disruptions) Electrification Autonomy Connectivity Novel battery technologies, growth of electrical Surge in autonomous drivi
Slide 40: Technology – Industrial segment
40 Technology – Industrial segment EXPANDING PORTFOLIO ALIGNED WITH TRENDS IN ADVANCED PACKAGING & TESTING FOR POWER Major trends impacting semiconductor demand Industry 4.0 Big Data Higher performing devices with greater functionality driving models that More servers with high power & high efficien
Slide 41: Technology – Consumer/communications segment
41 Technology – Consumer/ communications segment TAPPING INTO THE 5G REVOLUTION THROUGH ROBUST CUSTOM OFFERINGS Major trends impacting semiconductor demand 5G IoT High data rates, massive connectivity and ultra-low latency, catalyzing Need for combining functionalities – security, connectivity & mic
Slide 42: Technology – Invention patent
42 Technology – Invention patent GRANT OF IP030 - DFN SIDE WALL PLATING Invention patent description: a package design method to achieve side wall plating, a process method to achieve “Zero Burr”. Carsem Suzhou is the market leader in mainland China for side wall plating Patent validity period: 20 y
Slide 43: Technology – Immediate focus: SiC
43 Technology–Immediate focus SiC - UNLOCKING RF & POWER APPLICATIONS CARSEM ADVANTAGE ✓ Already working with the No.1 SiC wafer supplier in the world Benefits of SiC over ✓ Optimized packaging & previous gen materials performance for better SiC technology for power has ✓Wider bandgap, results a pro
Slide 44: Strategically investing to grow automotive segment in China
44 Technology–Immediate focus STRATEGICALLY INVESTING TO GROW AUTOMOTIVE SEGMENT IN CHINA Chinese brand is No.1 in EV Sales in 2022 & 2023 YTD • Automotive segment in China has a strong high compounded growth rate • Over 100 automotive projects already in different stages of pipeline • Transfer some
Slide 45: GaN for RF applications – 5G base stations
45 Technology – Immediate focus GaN FOR RADIO FREQUENCY (RF) APPLICATIONS – 5G BASE STATIONS Significant growth is projected for front end modules (FEM) in the next 8 years ✓ Carsem spent US$ 12Mil for 5G RF FEM. Carsem Suzhou already has experience in FEM for 4G/5G, include DiFEM Module/DiFEM Modul
Slide 46: Technology – Future focus: 5G testing
46 Technology – Future focus 5G TESTING Carsem Suzhou has been working extensively on 5G test technology 5G – Next Generation of mobile broadband development ✓ CSZ is working with 10+ customers for 5G device testing ✓ Completed 5G and Wifi7 RF test capability development, up to WiFi7 7.125GHz ✓ Cont
Slide 47: Technology – Future focus: Modules
47 Technology – Future focus MODULES Entirely new SMT Line 3D X - Ray C - Mold CARSEM SUZHOU ✓ Invested in dedicated machines for FEM module line under production ✓ Invest in dedicated machine and skilled manpower to extend FEM line capacity ✓ Attacking high end customer FEM product, under engineeri
Slide 48: Carsem technology center
48 Technology – Carsem technology center DEDICATED TECHNOLOGY CENTER TO DRIVE INNOVATION & TECHNOLOGY DEVELOPMENT CARSEM TECHNOLOGY CENTER (CTC) – 4M APPROACH TO R&D MATERIAL METHODOLOGY • Materials lab, • Process development • Design & Simulation • Total 75 active patents MACHINE MAN (HUMAN CAPITAL
Slide 49: Quality & productivity focus
49 Quality & productivity focus INVESTING IN AUTOMATION & INDUSTRY4.0 TO ACHIEVE ZERO DEFECTS & HIGH PRODUCTIVITY GOALS End Game – Smart factory Highlights State of the art advanced facilities, towards lean manufacturing 5G testing Lights-off factory Highly automated line with minimal dependence on
Slide 50: Automation: Gold Wire Management System
50 Quality & productivity focus AUTOMATION: GOLD WIRE MANAGEMENT SYSTEM (GWMS) Automated wire usage recording Wire usage weight (GWMS) vs used length (Wire Bonder) validation Linked with WB to validate wire usage Auto dispense Goldwire via BOM Part no. (GWMS) (Wire bonder) Eliminate Manual Recording
Slide 51: Certified on industry's leading performance parameters
51 Quality & productivity focus CERTIFIED ON INDUSTRY’S LEADING PERFORMANCE PARAMETERS ESD Control ISO 14001:2015 Applicable to Design, Assembly, Testing Environmental Management System & Finishing of semiconductor component implemented in compliance IATF 16949:2016 Sony Green Partner Program Design
Slide 52: Awards and recognitions
52 Awards and recognitions QUALITY, PEOPLE and ESG BEST SUPPLIER AWARDS received MPI won this award for the second successive year The Edge - FTSE ESG award 2023 The Edge Billion Ringgit Club & Corporate Best Quality Award, 2023 Strategy Partner Award, 2022 Awards 2023 Allegro AOS Malaysian Pacific
Slide 53: Table of Content
1 53 TABLE OF INTRODUCTION CONTENT 2 CORPORATE OVERVIEW 3 BUSINESS OVERVIEW 4 SUSTAINABILITY 5 GROWTH DRIVERS 6 FINANCIALS & SUMMARY
Slide 54: Financial highlights: Q1 FY24 snapshot
54 Financial highlights Q1 FY24 SNAPSHOT REVENUE Despite continuous weak end consumer demand, Q1 FY24 has grown revenue by 4% against Q4 FY23 PATAMI Optimized productivity & strict cost management led to PATAMI grew by 104% on revenue increase of just 4% Vs Q4 DIVIDEND Even in these uncertain market
Slide 55: Key financials
55 Key financials MPI GROUP RESULTS AT A GLANCE Q1 FY24 Q4 FY23 Q1 FY23 Q1 vs Q4 Q1 vs Q1 YTD FY24 YTD FY23 YoY RM mil RM mil RM mil % % RM mil RM mil % Revenue 513.2 482.4 564.0 6% -9% 513.2 564.0 -9% PAT 30.0 17.1 67.7 76% -56% 30.0 67.7 -56% PATAMI 16.5 8.1 52.7 >100% -69% 16.5 52.7 -69% EPS (sen
Slide 56: Continuing strategic investments
56 Investments CONTINUING STRATEGIC INVESTMENTS FOCUSING ON SENSORS, 5G TESTING & SiC/ GaN TECHNOLOGIES SZ MPI CAPEX (RM million) • Hire domain specific relevant people across the globe to support business operations & sales CARSEM SITES 5G TESTING • Investing in research & development to deliver la
Slide 57: Cash
57 Cash STRONG NET CASH POSITION MEANS STABILITY IN UNCERTAIN TIMES NET CASH (RM million) position remained healthy 284 387 444 547 573 644 677 689 713 761 798 809 826 943 918 927 902 914 890 849 772 840 816 813 801 872 Jun- Dec- Jun- Dec- Jun- Sep- Dec- Mar- Jun- Sep- Dec- Mar- Jun- Sep- Dec- Mar-
Slide 58: Statement of profit or loss
58 Statement of profit or loss Q1FY24 Q1FY23 Changes RM '000 RM '000 % Revenue 513,210 564,015 -9% Cost of sales (449,335) (473,857) -5% Gross profit 63,875 90,158 -29% Operating expenses (29,248) (33,434) -13% Other operating expenses/(income) (6,761) 15,365 -144% Profit from operation 27,866 72,08
Slide 59: Statement of financial position
59 Statement of financial position 30/09/2023 30/06/2023 RM'000 RM'000 Non-current assets Property, plant and equipment 1,390,522 1,416,233 Right-of-use assets 45,524 47,298 Investment properties 26,819 27,026 Investments 46 46 1,462,911 1,490,603 Current Assets Inventories 138,589 149,537 Trade and
Slide 60: Statement of financial position
60 Statement of financial position 30/09/2023 30/06/2023 RM'000 RM'000 Equity Share Capital 352,373 352,373 Reserves 1,854,019 1,826,261 Treasury shares (163,816) (163,816) 2,042,576 2,014,818 Non-controlling interests 362,558 345,570 2,405,134 2,360,388 Non-current liabilities Borrowings (unsecured
Slide 61: Summary
61 Summary MPI revenue closed at US$ 111 million for Q1 FY24, a sequential growth of 4% QoQ PATAMI improved by more than 100%, proving the implemented cost prudence measures to be effective MPI has a healthy order book for future quarters despite the ongoing market uncertainty Carsem continues to in
Slide 62: Thank You
62 Thank You Malaysian Pacific Industries Berhad
Malaysian Pacific Industries Berhad — Q1 FY2024 Earnings Presentation on 6ix