Malaysian Pacific Industries Bhd. · MYX:MPI
Malaysian Pacific Industries Bhd — Q2 FY2022 Earnings Presentation
59 slides from Malaysian Pacific Industries Bhd's earnings presentation, February 2022
Slide 1: Investor Presentation Q2 FY2022
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 2 F Y 2 0 2 2 ( O c t - D e c ’ 2 1 ) INVESTOR RELATIONS CONTACT Rohit Kumar +605 5262333 extn 8497 rohitkumar@carsem.com Malaysian Pacific Industries Berhad
Slide 2: Table of Content
1 2 TABLE OF INTRODUCTION CONTENT 2 CORPORATE OVERVIEW 3 BUSINESS OVERVIEW 4 SUSTAINABILITY 5 GROWTH DRIVERS 6 FINANCIALS & SUMMARY
Slide 3: Business overview: MPI, a member of the Hong Leong Group
3 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 4: Quarterly Snapshot
4 Quarterly Snapshot Q2 FY22 - STRONG FUNDAMENTALS DELIVERING INDUSTRY LEADING RESULTS Revenue (US$ million) PATAMI growth Net cash (RM million) 145 27% 890 vs Q2 FY21 Revenue growth EPS CAPEX growth 23% 43.00 sen 188% vs Q2 FY21 vs Q2 FY21 • Focused growth & transformation strategy with execution c
Slide 5: Business outlook
5 Business outlook MPI will continue to benefit from • Long term technology drivers – in particular, RF (5G) in Asia, and power (SiC, GaN) & automotive (electrification, sensors, safety) across US, EU • Localization driven demand trends in China • Strong cash position – allows to aggressively pursue
Slide 6: Table of Content
1 6 TABLE OF INTRODUCTION CONTENT 2 CORPORATE OVERVIEW 3 BUSINESS OVERVIEW 4 SUSTAINABILITY 5 GROWTH DRIVERS 6 FINANCIALS & SUMMARY
Slide 7: Journey & Capabilities
7 Milestones 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 & power
Slide 8: Board of Directors
8 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 9: Management team
9 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, CFO, MPI INDERJEET SINGH, GM, CARSEM S-SITE,
Slide 10: Table of Content
1 10 TABLE OF INTRODUCTION CONTENT 2 CORPORATE OVERVIEW 3 BUSINESS OVERVIEW 4 SUSTAINABILITY 5 GROWTH DRIVERS 6 FINANCIALS & SUMMARY
Slide 11: Supply chain & business model
11 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 12: Wide portfolio
12 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 13: Geographic footprint
13 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 14: Production facilities
14 Production facilities CARSEM MANUFACTURING SITES & BUSINESS UNITS Carsem (M-Site, Ipoh) • Floor Space: 436K sq.ft. (40,500 sq. m.) SOIC MICRO MSU • Workforce: 2,144 employees Automotive & Consumer • GM: Sharon Ko Carsem (S-Site, Ipoh) • Floor Space: 640K sq.ft. (60,000 sq. m.) PMG MLP TEST • Work
Slide 15: Production facilities: factory expansion
15 Production facilities FACTORY EXPANSION FOR PIPELINE, COMMITMENTS & BUSINESS GROWTH Production Starting in January 2024 Production Starting in January 2023 SUZHOU, CHINA MALAYSIA (IN FRONT OF CARSEM M SITE) Malaysian Pacific Industries Berhad
Slide 16: Production facilities: expanding infrastructure
16 Production facilities STEP BY STEP EXPANDING OUR EXISTING INFRASTRUCTURE TO INCREASE CAPACITY ❑ Constructing additional levels in the test area of S site measuring ~35,000 Sq.ft. ❑ Awaiting approvals from BOMBA & other government authorities ❑ Already secured business for the additional capacity
Slide 17: Table of Content
1 17 TABLE OF INTRODUCTION CONTENT 2 CORPORATE OVERVIEW 3 BUSINESS OVERVIEW 4 SUSTAINABILITY 5 GROWTH DRIVERS 6 FINANCIALS & SUMMARY
Slide 18: Our operational context
18 Our operational context INTERNAL & EXTERNAL FACTORS GOVERNING & INFLUENCING OUR BUSINESS Malaysian Pacific Industries Berhad
Slide 19: Sustainability at MPI
19 Sustainability at MPI OUR APPROACH IS RESPONSIBLE & RESPONSIVE, DRIVEN BY 3 THEMES Better Economy Better Environment Better Society Shareholders Energy & emissions GHG Employees Suppliers Waste Business ethics Customers Water Local communities • We respect the local environment • We prioritise th
Slide 20: UN Sustainable Development Goals
20 UN Sustainable Development Goals 6 PRIORITY SDGs MOST ALIGNED WITH OUR BUSINESS Innovation, technology & related MPI has a role to play in energy infrastructure development is a efficiency, emissions control and key focus area for MPI waste management As a responsible MPI makes a significant busi
Slide 21: Sustainability performance
21 Sustainability performance FY21 PERFORMANCE SNAPSHOT Energy intensity in GHG emission Water consumption FY21 was intensity in FY21 index in FY21 was substantially below was well below much lower than FY15 baseline, as FY15 baseline, as FY15 baseline, as targeted targeted targeted 30% lower 29% lo
Slide 22: Anti-bribery & anti-corruption
22 Anti-bribery & anti-corruption LEADING ETHICALLY & TRANSPARENTLY Received SIRIM certification for implementing Anti- Bribery Management Systems complying with ISO 37001:2016. Malaysian Pacific Industries Berhad
Slide 23: Energy & emissions
23 Energy & emissions MANAGING OUR CARBON FOOTPRINT AND ENERGY CONSUMPTION 30% eduction in energy intensity in FY21, below FY15 GHG 29% drop in C02 emissions/ kk unit in FY21, below FY15 baseline baseline CO2, metric ton/ kk unit CO2, metric ton Increased production activity during FY21 led to highe
Slide 24: Water management
24 Water management MANAGING OUR WATER CONSUMPTION & CONSERVATION 29% reduction in water consumption index in FY21, below FY15 baseline, despite higher production demand Malaysian Pacific Industries Berhad
Slide 25: Environment
25 Environment PROMOTING AWARENESS & COLLABORATING CLOSELY WITH DOE, PERAK, MALAYSIA Launched e-waste collection campaign Engaged in tree plantation, river cleaning Carsem Environment Day 2021 - Sembang Sungai @ Sungai Meru in collaboration with Department of Environment (DOE), Perak, Malaysia. Laun
Slide 26: Health & safety
26 Health & safety COVID-19 VACCINATION FOR OUR EMPLOYEES AT CARSEM SUZHOU EMPLOYEE • Active fulfillment of our social responsibility – we organized vaccination & guidance for employees CARE • Aim is to ensure safety, and good health & wellbeing of our employees BUSINESS CONTINUITY PLAN • ~2,500 of
Slide 27: Health & safety
27 Health & safety COVID-19 VACCINATION AND RTK TESTING FOR OUR EMPLOYEES AT CARSEM IPOH • Active fulfillment of our social responsibility – we organized vaccination & guidance for EMPLOYEE employees CARE • Aim is to ensure safety, and good health & wellbeing of our employees • >5,000 of our employe
Slide 28: Health & safety
28 Health & safety ENSURING SAFE & HYGIENIC LIVING ENVIRONMENT FOR EMPLOYEES Safeguarding employees’ safety Strict compliance with Government SOPs Certificate of Hostel Satisfactory outcome of MITI’s periodic enforcement check Accommodation from Department of Labor Employee dormitory audit by Labor
Slide 29: Table of Content
1 29 TABLE OF INTRODUCTION CONTENT 2 CORPORATE OVERVIEW 3 BUSINESS OVERVIEW 4 SUSTAINABILITY 5 GROWTH DRIVERS 6 FINANCIALS & SUMMARY
Slide 30: Macroeconomic Landscape
30 Macroeconomic Landscape MPI EXCELS IN A CHALLENGING MACRO ENVIRONMENT Covid, geopolitical uncertainties, materials’ price rise, delivery delays, Forex fluctuations, travel restrictions, manpower constraints, electricity rationing in China! Malaysian Pacific Industries Berhad
Slide 31: Industry Dynamics
31 Industry Dynamics SEMICONDUCTOR INDUSTRY IS DRIVEN BY LONG TERM TRENDS, ENABLING ROBUST TOPLINE GROWTH MPI REVENUE (US$ million) Capitalizing on favorable trends key to business growth ✓ Global commitments to combat climate change is driving the automotive segment innovation, growth and expansion
Slide 32: Growth Strategy
32 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 5G testing, SiC, MEMS sensors, GaN segments • Advanced packaging – inorganic options for • Sharp sales pipeli
Slide 33: Sales – Revenue Composition
33 Sales – Revenue Composition GROWTH ACROSS APPLICATIONS, WITH AUTO & INDUSTRIAL SEGMENTS GAINING SHARE AUTOMOTIVE CONSUMER & COMMUNICATIONS • 5G and IoT are unlocking multitude of use • Automotive remains strategic focus cases – smart cities, healthcare, etc. • Long term growth is driven by electr
Slide 34: Sales – Customer Relations
34 Sales – Customer Relations CONTINUOUS INVESTMENT IN CUSTOMER RELATIONS; POTENTIAL FOR FURTHER EXPANSION IN US & EU Automotive Industrial Consumer NORTH AMERICA ASIA Driving applications Driving applications EUROPE S. KOREA Driving applications SUZHOU, CHINA JAPAN CARSEM TAIWAN IPOH, MALAYSIA PENA
Slide 35: Sales – Pipeline
35 Sales – Pipeline DESPITE EXTERNAL CHALLENGES, CARSEM’s PIPELINE IS GROWING STEADILY Built customer confidence and reliability by Competitive pricing strategy to increase market delivering within timelines despite Covid-19 share challenges NEW PROJECT INTRODUCTIONS (#) 959 Advanced R&D Infrastruct
Slide 36: Sales – Competitive advantages
36 Sales – Competitive advantages UNREPLICABLE NO DEBT, SUBSTANTIAL QUALITY STANDARDS & CASH ADVANCED R&D INFRASTRUCTURE OFFERINGS IN PROFITABLE COMPANY GROWTH AREAS INVESTMENT IN 50 YEARS IN SERVICE AUTOMATION Carsem’s competitive advantages Malaysian Pacific Industries Berhad
Slide 37: Technology – Automotive Segment
37 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 38: Technology – Industrial Segment
38 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 39: Technology – Consumer/Communications Segment
39 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 40: Technology–Immediate Focus: SiC
40 Technology–Immediate Focus SiC - UNLOCKING RF & POWER APPLICATIONS ✓ New high thermal conductivity and high operating temperature materials (pressure & pressure-less Ag Benefits of SiC over sintered paste, Cu nano paste) CARSEM previous gen materials ✓Wider bandgap, – via a dedicated materials IN
Slide 41: Technology–Immediate Focus: GaN
41 Technology–Immediate Focus GaN – CATALYSING CHANGE IN POWER ELECTRONICS GaN is a wide bandgap material that is becoming essential Carsem R&D focuses on power in some applications where Silicon has hit its physical management solutions across the limits as a power conversion platform spectrum (low
Slide 42: Technology–Future Focus
42 Technology–Future Focus BUILDING/ ACQUIRING CAPABILITIES FOR TECHNOLOGY & VALUE CHAIN UPGRADE In-house NiPdAu Post MODULE/ SiP 3D Printing Design House Mold Plating • Development focus on • Evaluating 3D printing • Looking to acquire a • Development focus on Front End Module/ SIP, technology oppo
Slide 43: Technology – Carsem Technology Center
43 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 44: Quality & Productivity Focus
44 Quality & Productivity Focus INVESTING IN AUTOMATION & INDUSTRY4.0 TO ACHIEVE ZERO DEFECTS & HIGH PRODUCTIVITY GOALS End Game – Smart factory MPI CAPEX (RM million) Impact Examples of Automation initiatives e-Summary bin limit control – paperless 188% YoY growth Highly automated line and quality
Slide 45: Quality & Productivity Focus: certifications
45 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 46: People – Caring for our Employees
46 People – Caring for our Employees HELPING COLLEAGUES IMPACTED BY COVID-19 Covid-19 response at workplace • Carsem employees banded together to raise RM10,000 in 3 weeks to help colleagues impacted by the ongoing pandemic • Carsem donated another RM10,000 to the fundraiser, in a show of solidarity
Slide 47: Awards and Recognitions
47 AWARDS AND RECOGNITIONS QUALITY & PEOPLE 2021 Best Crisis 2021 Best Employer Malaysia Innovation Customer Management and Most potential, Most Creative Award Award AIBP Global Carsem Suzhou Leadership Suzhou City HR Excellence Award - Lighthouse Independent Media Malaysian Pacific Industries Berha
Slide 48: Table of Content
1 48 TABLE OF INTRODUCTION CONTENT 2 CORPORATE OVERVIEW 3 BUSINESS OVERVIEW 4 SUSTAINABILITY 5 GROWTH DRIVERS 6 FINANCIALS & SUMMARY
Slide 49: Financial highlights
49 Financial highlights Q2 FY22 SNAPSHOT REVENUE Again, A new record in Q2 FY22 - robust growth of 23% in USD & 26% in RM YoY despite external challenges PATAMI Proving the cost prudence measures to be effective, PATAMI grew by 27% YoY EPS Q2 FY22 EPS at 43.00 sen Vs 33.87 sen of Q2 FY21 (27% Growth
Slide 50: Key financial data
50 Key financial data MPI GROUP RESULTS AT A GLANCE Q2 FY22 Q1 FY22 Q2 FY21 Q2 vs Q1 Q2 vs Q2 YTD FY22 YTD FY21 YoY RM mil RM mil RM mil % % RM mil RM mil % Revenue 608.0 584.5 483.9 4% 26% 1,192.5 924.5 29% PAT 100.0 95.9 81.1 4% 23% 196.0 146.9 33% PATAMI 85.3 81.7 67.0 4% 27% 167.0 122.3 37% EPS
Slide 51: Key financial data: consistent growth
51 Key financial data CONSISTENT GROWTH IN LAST 8 QUARTERS; ALL TIME HIGH REVENUE & PATAMI IN Q2 FY22 MPI SEQUENTIAL & CORRESPONDING QUARTER GROWTH (Revenue in US$ million, PATAMI in RM million) 23% YoY 33% YoY 44% YoY 39% YoY 27% YoY 48% YoY 237% YoY 53% YoY Covid-19 lockdown Covid -19 China lockdo
Slide 52: Cash
52 Cash MPI IS CASH RICH DESPITE HUGE CAPTIAL EXPENDITURE & EXPENSES FOR EXTERNALITIES MPI NET CASH (RM million) remained healthy with 188% higher CAPEX during Q2 FY22 vs. Q2 FY21 284 387 444 547 573 644 677 689 713 761 798 809 826 943 918 927 902 914 890 Jun-16 Dec-16 Jun-17 Dec-17 Jun-18 Sep-18 De
Slide 53: Investments
53 Investments CONTINUING STRATEGIC INVESTMENTS FOCUSING ON SENSORS, 5G TESTING & SiC/ GaN • Installing New Machines for Capacity Expansion SZ • Hire more people across the globe to support business CARSEM SITES 5G TESTING operations & sales • Invest in Research & Development to deliver latest techn
Slide 54: Investments: EBITDA vs Capex
54 Investments CONSISTENT TECHNOLOGY INVESTMENTS TO REALIZE BUSINESS ASPIRATIONS MPI EBITDA VS CAPEX (RM MIL) SOME KEY INVESTMENT AREAS DURING Q2 FY22 Power Management MLP (QFN/ DFN) ramp up, CuClip Power Management for servers MEMS IMU (LGA) ramp up Power Management: Battery charge and timing MEMS,
Slide 55: Statement of Profit or Loss
55 Statement of Profit or Loss Q2FY22 Q2FY21 Changes RM '000 RM '000 % Revenue 608,006 483,935 26% Cost of sales (470,204) (383,347) 23% Gross profit 137,802 100,588 37% Operating expenses (32,337) (19,753) 64% Other operating income 11,228 10,399 8% Profit from operation 116,693 91,234 28% Interest
Slide 56: Statement of Financial Position
56 Statement of Financial Position 31/12/2021 30/06/2021 RM'000 RM'000 Non-current assets Property, plant and equipment 1,399,081 1,051,200 Right-of-use assets 36,838 38,844 Investment properties 28,339 28,790 Investments 46 46 1,464,304 1,118,880 Current Assets Inventories 190,067 170,226 Trade and
Slide 57: Statement of Financial Position
57 Statement of Financial Position 31/12/2021 30/06/2021 RM'000 RM'000 Equity Share Capital 352,373 352,373 Reserves 1,685,690 1,509,133 Treasury shares (163,816) (163,816) 1,874,247 1,697,690 Non-controlling interests 306,760 287,045 2,181,007 1,984,735 Non-current liabilities Borrowings (unsecured
Slide 58: Summary
58 Summary A RECORD Q2 FY22 MPI shows an upward trend for last 8 quarters, Revenue up by 23% (USD); 26% (RM) & PATAMI up by 27% YoY in Q2FY22 Carsem’s sales pipeline is strong & intact despite the ongoing challenges across the world Carsem continues to invest in SiC & GaN technology, 5G Testing & ME
Slide 59: Thank You
59 Thank You Malaysian Pacific Industries Berhad
Malaysian Pacific Industries Berhad — Q2 FY2022 Earnings Presentation on 6ix