Malaysian Pacific Industries Bhd. · MYX:MPI
Malaysian Pacific Industries Bhd — Q4 FY2023 Earnings Presentation
61 slides from Malaysian Pacific Industries Bhd's earnings presentation, Sep 1, 2023
Slide 1: Investor Presentation Q4 FY2023
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 4 F Y 2 0 2 3 ( A p r - J u n ‘ 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
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) EBITDA (%) 482 21% Q4 FY23 Q3 FY23 Net cash (RM million) CAPEX (RM million) 801 59 as of Q4 FY23 Q4 FY23 Note: FY23 = July 2022 – June 2023 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 (global GDP growth to drop to 3% in 2023, as per IMF); growth has slowed • Weak 2023 outlook with expectations of a 11% drop in semiconductor
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 ERIC CHEAH INDERJEET SINGH MURALITHARAN RAYMOND SHI CK L
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: 2,261 employees Automotive & Consumer • GM: Muralitharan Carsem (S-Site, Ipoh) • Floor Space: 640K sq. ft. (60,000 sq. m.) PMG MLP TEST •
Slide 16: Production facilities
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: Production facilities
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 commence by Foundation work Foundation work Scaffolding work L2 formwork L2 slab casting 2025 Malaysian Pacific Industr
Slide 18: Production facilities
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 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 GM gembawalk to IETS system Initial discussion with NGO @ GM gembawalk to IETS system Initial to DOE discussion organise with RiverNGO @ DOE to organise Cleaning ProgramRiver at Sungai Cleaning Program at Sungai Meru Meru GM gembawalk t
Slide 24: Health & safety
24 Plant inspection Plant inspection Health & safety Accident investigation EMPLOYEE AWARENESS EMERG ENCY PREPA 5S audit R E D N E S S & R Safety Machinery inspection E S Pcommittee ONSE meeting Plant inspection Plant inspection Accident investigation Safety committee meeting 5S audit Machinery insp
Slide 25: Training & education
25 Training & education TRAINING & UPSKILLING IS AMONG OUR TOPMOST STRATEGIC PRIORITIES Online & offline training - ISO37001 Training, Automotive Series Training, Engineer Core Competency – DOE, 8D, Customized Course – Leadership Series ISO37001 Standard Training ISO37001 Standard Training Automotiv
Slide 26: Training, sports & recreation
26 Training, sports & recreation Continuous education program for chemical handlers and noise hearing conservation Carsem C.E.R.I.A & Hong Leong Sports carnival Malaysian Pacific Industries Berhad
Slide 27: Anti-bribery & anti-corruption
27 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 28: Table of Content
1 28 TABLE OF INTRODUCTION CONTENT 2 CORPORATE OVERVIEW 3 BUSINESS OVERVIEW 4 SUSTAINABILITY 5 GROWTH DRIVERS 6 FINANCIALS & SUMMARY
Slide 29: Industry dynamics
29 Industry dynamics GLOBAL SEMICONDUCTOR INDUSTRY REVENUE IS EXPECTED TO DECLINE BY 11% IN 2023 MPI Revenue (US$ million) Economic headwinds persist leading to weak end consumer demand environment ✓ Worldwide EV car sales up by 37% annually - EV gaining market share - captured 19% of the market ✓ G
Slide 30: Industry dynamics
30 Industry dynamics MPI HAS OUTPACED INDUSTRY GROWTH EVEN IN PREVALENT MARKET ADJUSTMENTS Right strategy – market segment to play in, competitive pricing Investments in growth areas Anchor customers Strong cash position Base year FY20 Malaysian Pacific Industries Berhad
Slide 31: Industry dynamics
31 Industry dynamics OTHER CHALLENGES IN SHORT TERM AFFECTING TOPLINE & BOTTOMLINE Electricity Employee wages Increase in Steep Talent 2 0rates 17 2 0 1 7 & working hours 2 0 1 7 machine cost 2 0 1 inflation 7 crunch Commercial Wage increase & 45 Machine & delivery Rise in prices of Hard to get good
Slide 32: MPI's response
32 MPI’s response COST PRUDENCE MEASURES – IMMEDIATE RESPONSE TO MARKET CONDITIONS Continuous measures are taken to make a positive impact on costs, make processes efficient and proliferate it to all the sites Smart Sense to monitor Digital transformation and Freight cost reduction by Alternative en
Slide 33: Industry dynamics
33 Industry dynamics LONG TERM SEMICONDUCTOR DEMAND IS SET TO GROW, DRIVEN BY AUTOMOTIVE AND INDUSTRIAL SEGMENTS Global semiconductor market, 2021-30 Significant opportunities ahead Electric vehicles • 30% of global vehicles will be electric by 2030 ( ~ 7X vs. 2021) SiC/ GaN technology • SiC based E
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: Sales – Target segments to play in
35 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 36: Sales – Revenue composition
36 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 37: Sales – Pipeline
37 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 38: Technology – Automotive segment
38 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 39: Technology – Industrial segment
39 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 40: Technology – Consumer/ communications segment
40 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 41: Technology–Immediate focus: SiC
41 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 42: Growing demand for silicon carbide technology
42 Technology–Immediate focus GROWING DEMAND FOR SILICON CARBIDE TECHNOLOGY The silicon carbide device market is accelerating at Auto-related (EV) SiC market growth to stand out, rising breakneck speed, driven by automotive to US$3.3bn in 2025 and to US$7.5bn in 2030 from ~ US$0.9bn in 2021 Power Si
Slide 43: Strategic focus on automotive growth in China
43 Technology–Immediate focus STRATEGIC FOCUS ON AUTOMOTIVE SEGMENT GROWTH IN CHINA Chinese brand is No.1 in EV Sales in 2022 & 2023 YTD • Strong EV sales in China • 83 automotive projects are already in different stages of pipeline • Transfer some technology & experience manpower from Ipoh, Malaysi
Slide 44: GaN for RF applications – 5G base stations
44 Technology – Immediate focus GaN FOR RADIO FREQUENCY (RF) APPLICATIONS – 5G BASE STATIONS Significant growth is projected for front end modules (FEM) in the next 8 years ✓ Carsem spent US$ 12Mil for 5G RF FEM. Carsem Suzhou already has experience in FEM for 4G/5G, include DiFEM Module/DiFEM Modul
Slide 45: Technology – Future focus: 5G testing
45 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 46: Technology – Future focus: Modules
46 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 47: Carsem technology center
47 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 48: Quality & productivity focus
48 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 49: Automation: EO Laser Continuous Run Enhancement
49 Quality & productivity focus AUTOMATION: EO Laser Continuous Run Enhancement 3. Smart APC is only executed 6. After machine validates 1. Operator can on every marking content all frames is complete, continuously load change or every 1 hour. magazine change is done magazine without waiting (Previo
Slide 50: Certified on industry's leading performance parameters
50 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 51: Awards and recognitions
51 Awards and recognitions QUALITY & PEOPLE BEST SUPPLIER AWARDS received Best Partner Award, Best quality service Best supplier award, Awards to assembly and test Best supplier award, 2022 Best supplier award, 2022 2022 award, 2022 2022 engineering team, 2022 HEK, China PSE, China QST, China EPM, C
Slide 52: Table of Content
1 52 TABLE OF INTRODUCTION CONTENT 2 CORPORATE OVERVIEW 3 BUSINESS OVERVIEW 4 SUSTAINABILITY 5 GROWTH DRIVERS 6 FINANCIALS & SUMMARY
Slide 53: Financial highlights
53 Financial highlights Q4 FY23 SNAPSHOT REVENUE With the challenges faced in China & worldwide consumer demand drop, MPI closed Q4 FY23 at US$ 107M EPS Despite all the challenges & high costs, MPI Q4 EPS witnessed a positive swing of ~ 13 Sen CAPEX Good or bad times, Carsem invests in replacing old
Slide 54: Key financials
54 Key financials MPI GROUP RESULTS AT A GLANCE Q4 FY23 Q3 FY23 Q4 FY22 Q4 vs Q3 Q4 vs Q4 YTD FY23 YTD FY22 YoY RM mil RM mil RM mil % % RM mil RM mil % Revenue 482.4 471.9 612.0 2% -21% 2,044.7 2,416.1 -15% (LAT)/PAT 17.1 (8.4) 93.0 >100% >-82% 108.1 384.9 -72% PATAMI 8.1 (17.8) 80.5 >100% >-90% 61
Slide 55: Investments
55 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 56: Cash
56 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 Jun- Dec- Jun- Dec- Jun- Sep- Dec- Mar- Jun- Sep- Dec- Mar- Jun- Sep- Dec- Mar- Jun-
Slide 57: Statement of Profit or Loss
57 Statement of Profit or Loss Q4FY23 Q4FY22 Changes RM '000 RM '000 % Revenue 482,426 612,035 -21% Cost of sales (443,389) (490,371) -10% Gross profit 39,037 121,664 -68% Operating expenses (35,235) (29,189) 21% Other operating (expenses)/income 7,064 7,926 -11% (Loss)/Profit from operation 10,866
Slide 58: Statement of Financial Position
58 Statement of Financial Position 30/06/2023 30/06/2022 RM'000 RM'000 Non-current assets Property, plant and equipment 1,416,233 1,511,323 Right-of-use assets 47,298 52,285 Investment properties 27,026 27,897 Investments 46 46 1,490,603 1,591,551 Current Assets Inventories 149,537 206,279 Trade and
Slide 59: Statement of Financial Position
59 Statement of Financial Position 30/06/2023 30/06/2022 RM'000 RM'000 Equity Share Capital 352,373 352,373 Reserves 1,826,261 1,811,656 Treasury shares (163,816) (163,816) 2,014,818 2,000,213 Non-controlling interests 345,570 321,568 2,360,388 2,321,781 Non-current liabilities Borrowings (unsecured
Slide 60: Summary
60 Summary MPI closes at US$ 107M, despite several global challenges and demand drop across market segments MPI has a healthy order book for future quarters even in an uncertain market environment Carsem continues to invest in SiC & GaN Technology, 5G Testing, MEMS Sensors to grab the next wave of o
Slide 61: Thank You
61 Thank You Malaysian Pacific Industries Berhad
Malaysian Pacific Industries Berhad — Q4 FY2023 Earnings Presentation on 6ix