Malaysian Pacific Industries Bhd. · MYX:MPI
Malaysian Pacific Industries Bhd — Q1 FY2023 Earnings Presentation
66 slides from Malaysian Pacific Industries Bhd's earnings presentation, November 2022
Slide 1: Investor Presentation Q1 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 1 F Y 2 0 2 3 ( J u l - S e p ’ 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) 126 68 Q1 FY23 Q1 FY23 Net cash (RM million) CAPEX (RM million) 840 87 as of Q1 FY23 Q1 FY23 • Focused growth & transformation strategy with execution capabilities •
Slide 6: Business outlook
6 Business outlook Semiconductor industry is caught between a rock and a hard place Long term growth drivers The industry incumbents are facing challenges from continued operational & supply chain disruptions due to war, • rapid transition into electric cars, geopolitical tensions, Covid-19, inflati
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, CFO, MPI INDERJEET SINGH, GM, CARSEM S-SITE,
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: Sharon Ko Carsem (S-Site, Ipoh) • Floor Space: 640K sq. ft. (60,000 sq. m.) PMG MLP TEST • Wo
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 January 2024* Production starting in July 2023* SUXIANG, CHINA MALAYSIA (IN FRONT OF CARSEM M
Slide 17: Production facilities
17 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. Target for completion and starting production – July 2023 Already secured business for the additional capacity in S sit
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: Environment
22 Environment PROMOTING AWARENESS & COLLABORATING CLOSELY WITH DOE, PERAK, MALAYSIA Carsem Environment Day 2021 - Sembang Sungai @ Sungai Meru in collaboration with Recognition from Jabatan Alam Sekitar Perak (Department of Department of Environment (DOE), Perak, Malaysia Environment) Most E-Waste
Slide 23: Health & safety
23 Health & safety AWARD WINNING HEALTH & SAFETY PRACTICES Carsem has achieved a Gold Award II from recent MSOSH award audit. The "40th MSOSH AWARD 2022" award presentation will be held on December 21st, 2022 at Sunway Resort & Spa, Petaling Jaya. The award will be presented by the Honorable Ministe
Slide 24: Health & safety
24 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 25: Health & safety
25 Health & safety COVID-19 MEASURES TAKEN 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 26: Health & safety
26 Health & safety ENSURING SAFE & HYGIENIC LIVING ENVIRONMENT FOR EMPLOYEES New accommodation site for foreign workers with better security, facilities and living conditions These are in strict compliance with The Workers’ Minimum Standards of Housing and Amenities (Amendment) Act 2019 (Act 446) Ma
Slide 27: Training & education
27 Training & education TRAINING & UPSKILLING IS AMONG OUR TOPMOST STRATEGIC PRIORITIES Enhanced training infrastructure – new training centre launched at Carsem SZ Our new training centre at Carsem SZ, launched in FY22, is equipped with a large training room that can accommodate up to 120 people, a
Slide 28: Training & education
28 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 29: Corporate social responsibility (CSR)
29 Corporate social responsibility (CSR) ASSISTING WIDER COMMUNITY Charity material donation by Carsem SZ to underprivileged children in Sichuan Province Carsem SZ union donated Covid-19 prevention material to SIP government, to support the front-line medical staff and community workers Malaysian Pa
Slide 30: Corporate social responsibility (CSR)
30 Corporate social responsibility (CSR) ASSISTING WIDER COMMUNITY Carsem M donated desktops, printer and office chairs to local Police JOM BANTU @ CARSEM M - an initiative to assist employees and their Station at Ipoh, Perak, Malaysia families that are financially affected due to the pandemic. Mala
Slide 31: Anti-bribery & anti-corruption
31 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 32: Table of Content
1 32 TABLE OF INTRODUCTION CONTENT 2 CORPORATE OVERVIEW 3 BUSINESS OVERVIEW 4 SUSTAINABILITY 5 GROWTH DRIVERS 6 FINANCIALS & SUMMARY
Slide 33: Industry dynamics
33 Industry dynamics OBSTACLES ON THE GROWTH PATH MPI Revenue and PAT Global uncertainties are hampering near-term demand in semiconductor industry and in end-use applications ✓ Automotive sales forecast down by 3% - rising inflation & interest rates are a big hinderance ✓ Global PC shipments down b
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 41% 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 – 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 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 scare of recession has pushed projects to futur
Slide 40: Sales – Competitive advantages
40 Sales – Competitive advantages UNREPLICABLE NO DEBT, SUBSTANTIAL QUALITY STANDARDS & CASH ADVANCED R&D INFRASTRUCTURE OFFERINGS IN PROFITABLE 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 and GaN
44 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 45: Technology–Immediate focus: SiC
45 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 46: Technology – Immediate focus: GaN
46 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 47: GaN for RF applications – 5G base stations
47 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 48: Technology – Future focus: 5G testing
48 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 49: Technology – Future focus: Modules
49 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 50: Technology – Carsem technology center
50 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 51: Quality & productivity focus
51 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 52: Quality & productivity focus
52 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 53: People – Our employees
53 People – Our employees EMPLOYEE ENGAGEMENT ACTIVITIES Strategy meeting @ Carsem Suzhou Team building activities @ Carsem Suzhou Malaysian Pacific Industries Berhad
Slide 54: Awards and recognitions
54 Awards and recognitions QUALITY & PEOPLE BEST SUPPLIER AWARDS received Best Supplier Award,2021 Best in class – Quality, 2022 Outstanding Support, 2022 Roadmap supplier for QFN/ DFN Guobo, China Allegro Allegro Texas Instruments Malaysian Pacific Industries Berhad
Slide 55: Table of Content
1 55 TABLE OF INTRODUCTION CONTENT 2 CORPORATE OVERVIEW 3 BUSINESS OVERVIEW 4 SUSTAINABILITY 5 GROWTH DRIVERS 6 FINANCIALS & SUMMARY
Slide 56: Financial highlights
56 Financial highlights Q1 FY23 SNAPSHOT REVENUE Backed by strong fundamentals, MPI stood firm - Q1 FY23 US$ 126M, despite the challenges & market instability PATAMI Continued necessary investments in machines, manpower & floor space. Q1 FY23 Profit after tax – RM 67.7M DIVIDEND MPI is a synonym for
Slide 57: Key financials
57 Key financials MPI GROUP RESULTS AT A GLANCE Q1 FY23 Q4 FY22 Q1 FY22 Q1 vs Q4 Q1 vs Q1 YTD FY23 YTD FY22 YoY RM mil RM mil RM mil % % RM mil RM mil % Revenue 564.0 612.0 584.5 -8% -4% 564.0 584.5 -4% PAT 67.7 93.0 95.9 -27% -29% 67.7 95.9 -29% PATAMI 52.7 80.5 81.7 -35% -35% 52.7 81.7 -35% EPS (s
Slide 58: Key financials
58 Key financials MPI BUSINESS STAYING RESILIENT IN CHALLENGING & UNCERTAIN GLOBAL ENVIRONMENT MPI Revenue (US$ million) Highlights Equity-Debt ratio CAPEX (RM mil) 100:0 86.5 as of Q1 FY23 Q1 FY23 • Continuing to invest in strategic capacity expansions at our operations in China and Malaysia • Also
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 Jun- Dec- Jun- Dec- Jun- Sep- Dec- Mar- Jun- Sep- Dec- Mar- Jun- Sep- Dec- Mar- Jun- Sep-
Slide 60: Investments
60 Investments CONTINUING STRATEGIC INVESTMENTS FOCUSING ON SENSORS, 5G TESTING & SiC/ GaN • Installing new machines for capacity expansion SZ • Hiring more people across the globe to support business CARSEM SITES 5G TESTING operations & sales • Investing in research & development to deliver latest
Slide 61: Investments
61 Investments SUSTAINED INVESTMENTS TO REALIZE LONG TERM BUSINESS ASPIRATIONS MPI EBITDA VS CAPEX (RM MIL) SOME KEY INVESTMENT AREAS DURING Q1 FY23 Digital Isolator DC-DC, Analog-DC isolation for high voltage application in Automotive EV, hybrid and high performance motor for industrial automation
Slide 62: Statement of Profit or Loss
62 Statement of Profit or Loss Q1 FY23 Q1 FY22 Change RM '000 RM '000 % Revenue 564,015 584,525 -4% Cost of sales (473,857) (453,125) 5% Gross profit 90,158 131,400 -31% Operating expenses (33,434) (28,158) 19% Other operating income 15,365 10,271 50% Profit from operation 72,089 113,513 -36% Intere
Slide 63: Statement of Financial Position
63 Statement of Financial Position 30/09/2022 30/06/2022 RM '000 RM '000 Non-current assets Property, plant and equipment 1,508,788 1,511,323 Right-of-use assets 50,802 52,285 Investment properties 27,658 27,897 Investments 46 46 1,587,294 1,591,551 Current Assets Inventories 213,877 206,279 Trade a
Slide 64: Statement of Financial Position
64 Statement of Financial Position 30/09/2022 30/06/2022 RM'000 RM'000 Equity Share Capital 352,373 352,373 Reserves 1,867,403 1,811,656 Treasury shares (163,816) (163,816) 2,055,960 2,000,213 Non-controlling interests 338,887 321,568 2,394,847 2,321,781 Non-current liabilities Borrowings (unsecured
Slide 65: Summary
65 Summary MPI holding ground at US$ 126M for Q1 FY23 MPI has a healthy order book for future quarters despite the ongoing externalities Carsem continues to invest in SiC & GaN Technology, 5G Testing, MEMS Sensors to grab the next wave of opportunities Investing in expansion - new factory in Ipoh, a
Slide 66: Thank You
66 Thank You Malaysian Pacific Industries Berhad
Malaysian Pacific Industries Berhad — Q1 FY2023 Earnings Presentation on 6ix