Malaysian Pacific Industries Bhd. · MYX:MPI
Malaysian Pacific Industries Bhd — Q3 FY2022 Earnings Presentation
66 slides from Malaysian Pacific Industries Bhd's earnings presentation, May 22, 2022
Slide 1: Investor Presentation Q3 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 3 F Y 2 0 2 2 ( J a n - M a r ’ 2 2 ) INVESTOR RELATIONS CONTACT Rohit Kumar +605 5262333 extn 8497 rohitkumar@carsem.com Malaysian Pacific Industries Berhad
Slide 2: Table of Content
2 TABLE OF CONTENT 1 INTRODUCTION 2 C O R P O R AT E O V E R V I E W 3 BUSINESS OVERVIEW 4 S U S TA I N A B I L I T Y 5 GROWTH DRIVERS 6 FINANCIALS & SUMMARY
Slide 3: 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: Financial performance snapshot
4 Financial performance snapshot STRONG FUNDAMENTALS DELIVERING INDUSTRY LEADING RESULTS Revenue (US$ million) PATAMI growth Net cash (RM million) 430 26% 849 YTD FY22 YTD* FY22 vs YTD FY21 as of Q3 FY22 Revenue growth EPS CAPEX growth 23% 125.15sen 73% YTD FY22 vs YTD FY21 YTD FY22 YTD FY22 vs YTD
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 invest
Slide 6: Table of Content
6 TABLE OF CONTENT 1 INTRODUCTION 2 C O R P O R AT E O V E R V I E W 3 BUSINESS OVERVIEW 4 S U S TA I N A B I L I T Y 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 Sensors for For RF & power X3 for Mobile Market Sensors Automotive
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
10 TABLE OF CONTENT 1 INTRODUCTION 2 C O R P O R AT E O V E R V I E W 3 BUSINESS OVERVIEW 4 S U S TA I N A B I L I T Y 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 (bare
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 Consumer & MEMS & Sensors Copper Clip Flip Chip Suppressor (TVS) Management (SiC, Communication
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.) • Workforce: 2,162 employees Automotive & Consumer SOIC MICRO MSU • GM: Sharon Ko Carsem (S-Site, Ipoh) • Floor Space: 640K sq. ft. (60,000 sq. m.) • Workforce: 3,42
Slide 15: Production facilities: factory expansion
15 Production facilities FACTORY EXPANSION FOR PIPELINE, COMMITMENTS & BUSINESS GROWTH Production starting in January 2024*; land acquisition done in May ‘22 Production starting in January 2023* SUZHOU, CHINA MALAYSIA (IN FRONT OF CARSEM M SITE) *Depending on the covid situation & global externaliti
Slide 16: Production facilities: step by step expansion
16 Production facilities STEP BY STEP EXPANSION OF OUR EXISTING INFRASTRUCTURE TO INCREASE CAPACITY Constructing additional levels at the S-site test area measuring ~35,000 sq. ft. Awaiting approvals from BOMBA & other government authorities Already secured business for the additional capacity
Slide 17: Table of Content
17 TABLE OF CONTENT 1 INTRODUCTION 2 C O R P O R AT E O V E R V I E W 3 BUSINESS OVERVIEW 4 S U S TA I N A B I L I T Y 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 & MPI has a role to play in energy related infrastructure efficiency, emissions control development is a key focus and waste management area for MPI As a responsible MPI makes a business, safegu
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: Workforce diversity & talent retention
22 Workforce diversity & talent retention WE CONTINUE TO PROMOTE INCLUSIVITY, NON-DISCRIMINATION AND EMPLOYEE ENGAGEMENT EMPLOYEES FEMALE EMPLOYEES total global workforce % of female employees in workforce 8,728 48% employees at female employees March 31, 2022 “Women represent 10-25% of the semicond
Slide 23: Energy & emissions
23 Energy & emissions MANAGING OUR ENERGY CONSUMPTION AND EMISSIONS 30% eduction in energy intensity in FY21, below GHG 29% drop in C02 emissions/ kk unit in FY21, below FY15 baseline FY15 baseline CO2, metric ton/ kk unit CO2, metric ton Increased production activity during FY21 led to higher energ
Slide 24: Environment
24 Environment PROMOTING AWARENESS & COLLABORATING CLOSELY WITH DOE, PERAK, MALAYSIA Carsem Environment Day 2021 - Sembang Sungai @ Sungai Meru in Officially launched the Month of Environment collaboration with Department of Environment (DOE), Perak, Malaysia. Day 2021 in collaboration with Departme
Slide 25: Health & safety
25 Health & safety COVID-19 VACCINATION FOR OUR EMPLOYEES AT CARSEM SUZHOU • 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 • 2,657 of our employees (~96%) at Ca
Slide 26: Health & safety
26 Health & safety COVID-19 VACCINATION FOR OUR EMPLOYEES AT CARSEM MALAYSIA & DCI • 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 employees (~9
Slide 27: Health & safety
27 Health & safety ENSURING SAFE & HYGIENIC LIVING ENVIRONMENT FOR EMPLOYEES Safeguarding employees’ safety Strict compliance with Government SOPs Satisfactory outcome of periodic enforcement checks Certificate of Hostel Accommodation from Department of Labor Mid-night spot check by State Police Chi
Slide 28: Training & education
28 Training & education TRAINING & UPSKILLING IS AMONG OUR TOPMOST STRATEGIC PRIORITIES TRAINING HOURS TRAINING TYPES CONDUCTED formal training hours for employees number of trainings by types 75,378 5,495 2021 2022 Jan-Mar TRAINING HOURS PER EMPLOYEE average formal training hours/employee 498 173 2
Slide 29: Water management
29 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 30: Anti-bribery & anti-corruption
30 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 31: Corporate social responsibility (CSR)
31 Corporate social responsibility (CSR) ASSISTING WIDER COMMUNITY Carsem SZ & Union donated COVID prevention material to SIP government - to support the front-line medical staff and community workers Carsem Malaysia Charity Chest provided cash relief to affected employees whose properties were dama
Slide 32: Table of Content
32 TABLE OF CONTENT 1 INTRODUCTION 2 C O R P O R AT E O V E R V I E W 3 BUSINESS OVERVIEW 4 S U S TA I N A B I L I T Y 5 GROWTH DRIVERS 6 FINANCIALS & SUMMARY
Slide 33: Macroeconomic landscape
33 Macroeconomic landscape MPI GROWING STEADILY DESPITE A CHALLENGING MACRO ENVIRONMENT Covid, lockdowns in China, geopolitical uncertainties, war, material price rises, delivery delays, forex fluctuations, talent crunch! Malaysian Pacific Industries Berhad
Slide 34: Industry dynamics
34 Industry dynamics GROWTH DRIVEN BY AUTOMOTIVE & INDUSTRIAL SEGMENTS – MPI’s TARGET SEGMENTS! MPI REVENUE (US$ million) and PAT (RM million) Capitalizing on right strategic choices & strong fundamentals 5 years ago, MPI began strategic investments in complex packaging technologies for automotive
Slide 35: Growth Strategy
35 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 & • Investing in 5G testing, SiC, MEMS sensors, GaN geography segments • Advanced packaging – inorganic options for • Sharp sales pipeli
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 GROWTH ACROSS APPLICATIONS, ESPECIALLY AUTO & INDUSTRIAL SEGMENTS 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 • Semiconducto
Slide 38: Sales – Customer relations
38 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 39: Sales – Pipeline
39 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 (#) Advanced R&D Infrastructure
Slide 40: Sales – Competitive advantages
40 Sales – Competitive advantages UNREPLICABLE NO DEBT, QUALITY STANDARDS SUBSTANTIAL CASH & ADVANCED R&D INFRASTRUCTURE PROFITABLE OFFERINGS IN COMPANY GROWTH AREAS INVESTMENT IN 49 YEARS IN SERVICE AUTOMATION Carsem’s competitive advantages Malaysian Pacific Industries Berhad
Slide 41: Technology – Automotive segment
41 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 42: Technology – Industrial segment
42 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 43: Technology – Consumer/communications segment
43 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 44: Technology – Immediate focus: SiC
44 Technology–Immediate focus SiC - UNLOCKING RF & POWER APPLICATIONS New high thermal conductivity and high operating temperature materials (pressure & pressure-less Ag CARSEM Benefits of SiC over previous gen materials sintered paste, Cu nano paste) – via a dedicated I N N O VAT I O N T O Wider
Slide 45: Technology – Immediate focus: GaN
45 Technology – Immediate focus GaN – CATALYSING CHANGE IN POWER ELECTRONICS GaN is a wide bandgap material that is becoming Carsem R&D focuses on power essential in some applications where Silicon has hit management solutions across its physical limits as a power conversion platform the spectrum (l
Slide 46: GaN for RF applications – 5G base stations
46 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 and now progressing with extensive R
Slide 47: Technology – Future focus: 5G testing
47 Technology – Future focus 5G testing Carsem Suzhou has been working extensively on 5G test 5G – Next Generation of mobile broadband technology development CSZ is working with 10+ customers for 5G device testing Over US$ 5Mil investment in 2021 in buying testing machines as they are completely
Slide 48: Technology – Future focus: Modules
48 Technology – Future focus Modules Entirely new SMT Line 3D X - Ray C - Mold CARSEM SUZHOU Invested in dedicated machines for FEM module line. Machines have come in and finished setting up Design is under R&D and getting evaluated by customers Secured business from 2 major customers in China
Slide 49: Carsem technology center
49 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 50: Quality & productivity focus
50 Quality & productivity focus INVESTING IN AUTOMATION & INDUSTRY4.0 TO ACHIEVE ZERO DEFECTS & HIGH PRODUCTIVITY GOALS End Game – Smart factory MPI CAPEX (RM million) Impact State of the art advanced facilities, towards lean manufacturing 73% growth Highly automated line 5G testing Lights-off facto
Slide 51: Quality & productivity focus: certifications
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 implemented in compliance component IATF 16949:2016 Sony Green Partner Program Design
Slide 52: People – Caring for our employees
52 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 53: Awards and recognitions
53 Awards and recognitions QUALITY & PEOPLE CARSEM SUZHOU 2021 BEST SUPPLIER AWARDS TVS, LDO in phones, RF Module RF Switch/LNA/FEM Module High pin count RF Module security & consumer 5G Saw Filter in 5G phones, 2021 MLP(QFN/DFN), 2021 for WIFI6, 2021 products, 2021 Radar Sensor, 2021 Maxscend, Chin
Slide 54: Awards and recognitions
54 Awards and recognitions QUALITY & PEOPLE Malaysia Enterprise Innovation Award (Digital) Supplier Excellence Award AIBP Global Suzhou Good-Ark Electronics Carsem is the ONLY company from semiconductor industry to win this award; among the 2 companies in MY that won Malaysian Pacific Industries Ber
Slide 55: Table of Content
55 TABLE OF CONTENT 1 INTRODUCTION 2 C O R P O R AT E O V E R V I E W 3 BUSINESS OVERVIEW 4 S U S TA I N A B I L I T Y 5 GROWTH DRIVERS 6 FINANCIALS & SUMMARY
Slide 56: Financial highlights
56 Financial highlights Q3 FY22 SNAPSHOT REVENUE Despite all the challenges YTD FY22 has grown by 23% against corresponding cumulative 3 Quarters of FY21 PATAMI Proving the cost prudence measures to be effective, YTD FY22 PATAMI grew by 26% against YTD of FY21 EPS YTD FY22 EPS at 125.15 sen Vs 99.49
Slide 57: Key financial data
57 Key financial data MPI GROUP RESULTS AT A GLANCE Q3 FY22 Q2 FY22 Q3 FY21 Q3 vs Q2 Q3 vs Q3 YTD FY22 YTD FY21 YoY RM mil RM mil RM mil % % RM mil RM mil % Revenue 611.6 608.0 526.6 1% 16% 1,804.1 1,451.1 24% PAT 95.9 100.0 89.1 -4% 8% 291.9 236.1 24% PATAMI 81.4 85.3 74.4 -5% 9% 248.4 196.7 26% EP
Slide 58: Key financial data: sustained growth
58 Key financial data MPI BELIEVES IN LOOKING AT LONGER PERIODS OF INCREASE IN TOPLINE & BOTTOMLINE MPI’s SUSTAINED GROWTH 13% YoY 8% YoY • Remarkable growth driven by successful strategic execution • Investing heavily in the rapidly growing future technologies of the semiconductor industry – 5G tes
Slide 59: Cash
59 Cash MPI IS CASH RICH DESPITE HUGE CAPTIAL EXPENDITURE & EXPENSES FOR EXTERNALITIES MPI NET CASH (RM million) remained healthy with 73% higher CAPEX during YTD FY22 vs. YTD FY21 284 387 444 547 573 644 677 689 713 761 798 809 826 943 918 927 902 914 890 849 Jun-16 Dec-16 Jun-17 Dec-17 Jun-18 Sep-
Slide 60: Investments
60 Investments CONTINUING STRATEGIC INVESTMENTS FOCUSING ON SENSORS, 5G TESTING & SiC/ GaN • Installing new machines for capacity expansion SZ CARSEM SITES • Hiring more people across the globe to support 5G TESTING business operations & sales • Investing in research & development to deliver latest
Slide 61: Investments: EBITDA vs Capex
61 Investments SUSTAINED TECHNOLOGY INVESTMENTS TO REALIZE BUSINESS ASPIRATIONS MPI EBITDA VS CAPEX (RM MIL) SOME KEY INVESTMENT AREAS DURING Q3 FY22 Power Management MLP (QFN/ DFN) ramp up, CuClip Power Management for servers, automotive grade power switching in motor driver Digital isolator – DC-D
Slide 62: Statement of Profit or Loss
62 Statement of Profit or Loss Q3FY22 Q3FY21 Changes RM '000 RM '000 % Revenue 611,557 526,628 16% Cost of sales (495,653) (428,492) 16% Gross profit 115,904 98,136 18% Operating expenses (28,933) (20,084) 44% Other operating income 24,677 19,416 27% Profit from operation 111,648 97,468 15% Interest
Slide 63: Statement of Financial Position
63 Statement of Financial Position 31/03/2022 30/06/2021 RM'000 RM'000 Non-current assets Property, plant and equipment 1,504,577 1,051,200 Right-of-use assets 35,742 38,844 Investment properties 28,119 28,790 Investments 46 46 1,568,484 1,118,880 Current Assets Inventories 196,257 170,226 Trade and
Slide 64: Statement of Financial Position
64 Statement of Financial Position 31/03/2022 30/06/2021 RM'000 RM'000 Equity Share Capital 352,373 352,373 Reserves 1,781,920 1,509,133 Treasury shares (163,816) (163,816) 1,970,477 1,697,690 Non-controlling interests 323,075 287,045 2,293,552 1,984,735 Non-current liabilities Borrowings (unsecured
Slide 65: Summary
65 Summary STEADY GROWTH IN Q3 FY22 AND FAVORABLE OUTLOOK AHEAD MPI shows a high double digit growth in revenue & PATAMI for YTD FY22 as compared to that during YTD FY21 MPI has a healthy order book despite the ongoing externalities that are affecting all industries Carsem continues to invest
Slide 66: Thank You
66 Thank You Malaysian Pacific Industries Berhad
Malaysian Pacific Industries Berhad — Q3 FY2022 Earnings Presentation on 6ix