Malaysian Pacific Industries Bhd. · MYX:MPI
Malaysian Pacific Industries Bhd — Q2 FY2023 Earnings Presentation
63 slides from Malaysian Pacific Industries Bhd's earnings presentation, February 2023
Slide 1: Investor Presentation Q2 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 2 F Y 2 0 2 3 ( O c t - D e c ’ 2 2 ) INVESTOR RELATIONS CONTACT Rohit Kumar +605 5262333 extn 8497 [email protected] 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 (US$ million) PAT (RM million) 116 32 Q2 FY23 Q2 FY23 Net cash (RM million) CAPEX (RM million) 816 62 as of Q2 FY23 Q2 FY23 • Focused growth & transformation strategy with execution capabilities •
Slide 6: Business outlook
6 Business outlook • Covid-related supply chain constraints especially in China, inflation concerns; Semiconductor industry • Uncertain impact of China’s reopening; ongoing war and geopolitical tensions growth is hampered • 1/3 advanced economies heading for recession (IMF, Jan 2023); • Excess inven
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: 2,256 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 DESPITE NEAR TERM CHALLENGES, OUR FACTORY EXPANSION PLANS CONTINUE TO CAPTURE LONG TERM OPPORTUNITIES Expansion for pipeline, commitments and business growth Production starting in August 2024* Production starting in July 2023* SUXIANG, CHINA MALAYSIA (IN FRONT OF CARSEM M S
Slide 17: Production facilities
17 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 18: Table of Content
1 18 TABLE OF INTRODUCTION CONTENT 2 CORPORATE OVERVIEW 3 BUSINESS OVERVIEW 4 SUSTAINABILITY 5 GROWTH DRIVERS 6 FINANCIALS & SUMMARY
Slide 19: Sustainability performance
19 Sustainability performance FY22 PERFORMANCE SNAPSHOT Included in FTSE4Good Bursa Malaysia Index and in top-quartile of ESG ratings amongst all PLCs assessed by FTSE Russell on Bursa Malaysia Women in workforce Training Health and safety 48% 4 hours on average Zero occupational per employee fatali
Slide 20: Sustainability at MPI
20 Sustainability at MPI OUR APPROACH IS RESPONSIBLE & RESPONSIVE, DRIVEN BY 3 THEMES Better Economy Better Environment Better Society • We prioritise the safety & wellbeing of our • We create economic value for our • We respect the local environment people shareholders • We strive to manage our ene
Slide 21: UN Sustainable Development Goals
21 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 22: Health & safety
22 Health & safety CONTINUED COVID-19 MEASURES TAKEN, ESPECIALLY AT SUZHOU, CHINA FACILITY Temperature measurements for all visitors and employees health code checks at the entrance disinfection in all public areas, and of incoming shipments Malaysian Pacific Industries Berhad
Slide 23: Health & safety
23 Health & safety 99% OF OUR EMPLOYEES HAVE BEEN VACCINATED WITH TWO DOSES EMPLOYEE • Active fulfillment of our social responsibility – we organized vaccination & guidance for CARE employees • Aim is to ensure safety, and good health & wellbeing of our employees BUSINESS CONTINUITY PLAN Carsem M or
Slide 24: Environment
24 Environment IMPROVING PREPAREDNESS AND RECEIVING RECOGNITION Incident Commander Training for ERT members Recognition from Malaysian Society For Occupational Safety and Health MSOSH OSH GOLD CLASS 2 AWARD WINNER FOR 2022 under the category of MANUFACTURING & CHEMICAL SECTORS, ELECTRONICS AND ELECT
Slide 25: Training & education
25 Training & education TRAINING & UPSKILLING IS AMONG OUR TOPMOST STRATEGIC PRIORITIES Online & offline training programs - Supervisor series training, SLDN Apprenticeship Program, Engineer mandatory training, Audit & Compliance Training, ERT Training Malaysian Pacific Industries Berhad
Slide 26: Training & education
26 Training & education TRAINING & UPSKILLING IS AMONG OUR TOPMOST STRATEGIC PRIORITIES Online & offline training programs - Graduate development program, Supervisor series training, Production specialist training, Engineer core competency development Malaysian Pacific Industries Berhad
Slide 27: Anti-bribery & anti-corruption
27 Anti-bribery & anti-corruption LEADING ETHICALLY & TRANSPARENTLY Renewed SIRIM certification for implementing Anti- Bribery Management Systems complying with ISO 37001:2016. Malaysian Pacific Industries Berhad
Slide 28: Audit & Compliance
28 Audit & Compliance DRIVING SUSTAINABLE VALUE FOR WORKERS, ENVIRONMENT & BUSINESS PERFORMANCE VIA LEADING STANDARDS & PRACTICES Responsible Business Alliance (RBA) VAP Audit ISO140001 and ISO 45001 Surveillance Audit Malaysian Pacific Industries Berhad
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: Industry dynamics
30 Industry dynamics MPI OPERATING IN A CHALLENGING ENVIRONMENT MPI Revenue and PAT Short term growth is hampered by economic and market headwinds ✓ Electric vehicles remain a bright spot despite marginal year on year drop in overall automotive sales by 0.1% ✓ Global PC shipments feel drastically by
Slide 31: Industry dynamics
31 Industry dynamics CHINA’S STRUGGLING ECONOMY The S&P China 500 declined 24.4% in 2022 Source: SeekingAlpha Malaysian Pacific Industries Berhad
Slide 32: Industry dynamics
32 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 33: MPI's response
33 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 & Automation Freight Cost Reduction by Alter
Slide 34: Industry dynamics
34 Industry dynamics LONG TERM OUTLOOK IS POSITIVE CONSIDERING THE WAVE OF OPPORTUNITIES IN THE COMING YEARS Malaysian Pacific Industries Berhad
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 & geography • Investing in SiC, MEMS sensors, GaN, 5G testing 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 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 – Immediate focus: SiC and GaN
42 Technology–Immediate focus SiC and GaN TECHNOLOGIES • Rapid growth is projected on the back of a surging adoption for SiC and GaN power devices in line with the global drive for electrification and sustainability • SiC and GaN are fit for applications that require high power and frequency as they
Slide 43: Technology – Immediate focus: SiC
43 Technology–Immediate focus SiC - UNLOCKING RF & POWER APPLICATIONS ✓ Module packaging development with SiC for Benefits of SiC over automotive CARSEM previous gen materials ✓ Custom packaging design – ✓Wider bandgap, using thermal & stress INNOVATION TO ✓improved energy conversion efficiency & po
Slide 44: Technology – Immediate focus: GaN
44 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 (l
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 and now progressing with extensive R
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 ✓ Over US$ 5Mil investment in 2021 in buying testing machines as they are completely
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. Machines have come in and finished setting up ✓ Design is under R&D and getting evaluated by customers ✓ Production began at small scale, amidst the rela
Slide 48: Technology – 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: auto packing of reel at Carsem Suzhou
50 Quality & productivity focus AUTOMATION: AUTO PACKING OF REEL AT CARSEM SUZHOU Manual packing Label print Auto Packing Presentation Reel auto packing instead of Stick Label manual packing to improve quality and efficiency Label Scan Quality improvement Auto packing ` HIC/ Desic Auto implement the
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: People – Our employees
52 People – Our employees EMPLOYEE ENGAGEMENT ACTIVITIES Strategy meeting @ Carsem Suzhou Team building activities @ Carsem Suzhou Malaysian Pacific Industries Berhad
Slide 53: Awards and recognitions
53 Awards and recognitions QUALITY & PEOPLE BEST SUPPLIER AWARDS received Excellent strategic supplier, Continuously Increasing Output Achieving Output Target for RF Module 2022 - RF Switch/LNA/FEM for 4 Consecutive Quarters FY2022 5G Saw Filter Radar Sensor Module in 5G phones Wolfspeed Wolfspeed M
Slide 54: Table of Content
1 54 TABLE OF INTRODUCTION CONTENT 2 CORPORATE OVERVIEW 3 BUSINESS OVERVIEW 4 SUSTAINABILITY 5 GROWTH DRIVERS 6 FINANCIALS & SUMMARY
Slide 55: Financial highlights
55 Financial highlights Q2 FY23 SNAPSHOT REVENUE With the challenges faced in China & worldwide consumer demand drop, MPI closed Q2 FY23 at US$ 116M PAT Continued necessary investments in machines, manpower & floor space. Q2 FY23 Profit after tax – RM 32M CAPEX Good or Bad times, Carsem invests in r
Slide 56: Key financials
56 Key financials MPI GROUP RESULTS AT A GLANCE Q2 FY23 Q1 FY23 Q2 FY22 Q2 vs Q1 Q2 vs Q2 YTD FY23 YTD FY22 YoY RM mil RM mil RM mil % % RM mil RM mil % Revenue 526.4 564.0 608.0 -7% -13% 1,090.4 1,192.5 -9% PAT 31.8 67.7 100.0 -53% -68% 99.5 196.0 -49% PATAMI 18.3 52.7 85.3 -65% -79% 71.0 167.0 -57
Slide 57: Investments
57 Investments SUSTAINED INVESTMENTS TO REALIZE LONG TERM BUSINESS ASPIRATIONS MPI EBITDA VS CAPEX (RM million) • Continuing to invest in strategic capacity expansions at our operations in China and Malaysia • Also, investing in growing future technologies such as power management (inc. SiC, GaN), 5
Slide 58: Continuing strategic investments
58 Investments CONTINUING STRATEGIC INVESTMENTS FOCUSING ON SENSORS, 5G TESTING & SiC/ GaN SZ • Hiring more people across the globe to support business operations & sales CARSEM SITES 5G TESTING • Investing in research & development to deliver latest technology solutions to our customers • Expanding
Slide 59: Cash
59 Cash STRONG NET CASH POSITION MEANS GREAT 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 Jun- Dec- Jun- Dec- Jun- Sep- Dec- Mar- Jun- Sep- Dec- Mar- Jun- Sep- Dec- Mar- Jun- S
Slide 60: Statement of Profit or Loss
60 Statement of Profit or Loss Q2FY23 Q2FY22 Changes RM '000 RM '000 % Revenue 526,419 608,006 -13% Cost of sales (455,645) (470,204) -3% Gross profit 70,774 137,802 -49% Operating expenses (33,128) (32,337) 2% Other operating (expenses)/income (4,181) 11,228 -137% Profit from operation 33,465 116,6
Slide 61: Statement of Financial Position
61 Statement of Financial Position 31/12/2022 30/06/2022 RM'000 RM'000 Equity Share Capital 352,373 352,373 Reserves 1,854,402 1,811,656 Treasury shares (163,816) (163,816) 2,042,959 2,000,213 Non-controlling interests 341,191 321,568 2,384,150 2,321,781 Non-current liabilities Borrowings (unsecured
Slide 62: Summary
62 Summary MPI held ground at US$ 116M for Q2 FY23 despite China lockdowns & severe end customer demand drop MPI has a healthy order book for future quarters despite the ongoing market uncertainty Carsem continues to invest in SiC & GaN Technology, 5G Testing, MEMS Sensors to grab the next wave of o
Slide 63: Thank You
63 Thank You Malaysian Pacific Industries Berhad
Malaysian Pacific Industries Berhad — Q2 FY2023 Earnings Presentation on 6ix