Financials

Quarterly Report For The Financial Period Ended 31 December 2024

Note: Files are in Adobe (PDF) format.
Please download the free Adobe Acrobat Reader to view these documents.

Unaudited Condensed Consolidated Statement Of Profit Or Loss And Other comprehensive Income For The Year Ended 31 December 2024

Unaudited Condensed Consolidated Statement Of Financial Position as At 31 December 2024

Review of Performance

The Group recorded a quarterly revenue of RM130.7 million in the 3-month ended 31 December 2024 (“4Q2024”) as compared to RM169.0 million registered in the 3-month ended 31 December 2023 (“4Q2023”), representing a drop of 22.7%. For the entire financial year ended (“FYE”) 31 December 2024 (“12M2024”), the Group’s revenue stood at RM623.0 million as compared to RM691.9 million in the FYE 31 December 2023 (“12M2023”), representing a decrease of 10.0%.

The Group’s revenue was mainly contributed by the ATE and FAS segments, constituting approximately 36.0% and 63.9% respectively for the FYE 31 December 2024.

Below outlined the revenue of the respective operating segments where elements of inter-segment transactions were included.

The following table sets out revenue breakdown by customers' segment for the Group:

The Group closed its 4Q2024 with a profit before taxation of RM21.1 million (4Q2023: RM31.3 million), representing a decrease of approximately 32.4%. It is mainly impacted by lower revenue from the ATE segment, inventories written off, higher ECL on trade receivables and increased research and development expenses.

Accordingly, the Group closed its 12M2024 with a profit before taxation of RM105.4 million, representing a decrease of 25.5% from RM141.4 million recorded in 12M2023. The Group’s EBITDA (earnings before interest, tax, depreciation and amortisation) for the 4Q2024 stood at RM27.0 million (4Q2023: RM35.8 million), representing a decrease of 24.5%, while the Group’s EBITDA for the 12M2024 stood at RM127.0 million (12M2023: RM159.2 million), representing a decrease of 20.2%.

Basic earnings per share decreased from 2.91 sen in 4Q2023 to 1.99 sen in 4Q2024, while for 12M2024, basic earnings per share decreased from 12.53 sen achieved in 12M2023 to 9.17 sen.

Performance of the respective operating segments which includes inter-segment transactions for the current quarter as compared to the previous corresponding quarter is analysed as follows:

1. Automated test equipment

   Revenue in the ATE segment dropped by RM56.2 million in 4Q2024, to record at RM37.8 (4Q2023: RM94.0 million), a decline of 59.8% as compared to the same period last year. This contraction was largely driven by a slowdown in the semiconductor - automotive sector where macroeconomic challenges, policy uncertainties and shifting market sentiment impacting the overall electric vehicle (“EV”) sector. The lack of clarity surrounding EV policies in key Western markets which has unfortunately become one of the first geopolitical trade tools, has created confusion and hesitation among car manufacturers in their capital expenditures.

   
   

   Within the ATE segment, the automotive segment continued to form the largest share of wallet, at approximately 36.1% for 4Q2024 (4Q2023: 61.1%). On 12-month basis, the automotive segment contributed 59.3% towards the ATE segment in 12M2024, as compared to 71.7% in 12M2023. This fast-paced deceleration underscored the challenges faced by automotive manufacturers navigating cost pressures, evolving regulatory landscapes and supply chain constraints. This was particularly evident in Europe where the EV market experienced a pull-back of 2.2% in terms of deliveries in 2024 as compared to 2023.

   
   

   Revenue performance from the semiconductor industry segment was relatively stable in its contribution towards the Group’s ATE segment. During the 4Q2024, the semiconductor industry contributed 36.0% towards the ATE segment, as compared to 32.9% in 4Q2023. However, for 12M2024, this industry segment’s contribution showed a decrease to 15.8% as compared to 12M2023 of 21.7%, reflecting an overall industry softness since 2023. Following the surge in demand during the pandemic years (2020–2022), inventory normalisation has led to slower orders and a temporary revenue dip. While artificial intelligence (“AI”) has propelled a recovery in the second half of 2024, this segment has shown a two-sided divergence with consumer and automotive struggling, while advanced IC, memory and logic products have thrived.

   
   

   After years of contraction, the Group’s electro-optical segment recovered with revenue contribution from this segment showing a rebound in 4Q2024 as compared to 4Q2023. This segment contributed 26.8% towards the ATE segment in 4Q2024, versus 5.7% for 4Q2023. For 12M2024, the share of wallet coming from this segment was at 24.1%, a significant increase from 6.4% recorded in 12M2023. The growth of this segment was primarily driven by the increasing adoption of sophisticated smart sensors in mobile devices, as manufacturers seek to improve camera systems, facial recognition, augmented reality applications and ambient light adaptation that were generally fuelled by advancements in high-performance computing, AI and next-generation connectivity.

   
   

   Overall, in 4Q2024, the Group’s ATE segment reported a loss before taxation of RM8.9 million, as compared to a profit before taxation of RM17.4 million in 4Q2023.

   
   

   The performance of the ATE segment is expected to remain subdued through the first half of 2025 given the lack of certainty at the macro front, particularly in the semiconductor - automotive segment. Despite these short-term challenges, the Group maintains an optimistic long-term outlook for its ATE segment, driven primarily by its diversified portfolio and involvement in key growth areas, particularly its strategic venture into the advanced packaging area, focusing on cutting-edge technology testing for 2.5D substrates.




2. Factory automation solutions

   Revenue from the Group’s FAS segment registered a commendable growth of approximately 19.0% in 4Q2024 as compared to 4Q2023, coming in at RM93.6 million in 4Q2024 versus RM78.7 million in 4Q2023. The FAS segment reached a significant milestone with its total revenue hitting RM405.4 million for 12M2024, an impressive growth of 58.6% as compared to RM255.5 million achieved in the same period last year. Such performance was mainly attributable to the Group’s medical industry segment with a share of wallet coming in at 82.3% in 4Q2024 (4Q2023: 66.3%).

   
   

   Other industry segments such as consumer and industrial products segment and electro-optical segment made up the remaining contributions to the FAS segment in 4Q2024, with each contributing approximately 10.4% and 3.8% respectively. Driven by technological advancements and the growing adoption of industrial automation across multiple sectors with the global trend of onshoring, the FAS segment is poised to reinforce its role as a key driver of the Group’s long-term growth and sustained business strategy.

   
   

   For the 4Q2024, the FAS segment recorded a higher profit before taxation at RM34.6 million as compared to RM20.3 million in 4Q2023. All-in-all, the Group expects its FAS segment to continue to grow and contribute meaningfully in the near future.




3. Smart control solution system

   The products and solutions in this segment entail project management, smart building solutions and trading of materials.

   
   

   The smart control solution system segment recorded an increase in revenue to RM0.6 million in 4Q2024, from RM0.2 million recorded in 4Q2023. This segment however, recorded a loss before taxation of RM0.5 million in 4Q2024 as compared to RM0.8 million in 4Q2023.

   
   

Prospect

“In the middle of every difficulty lies opportunity”

The Group anticipates that many of the trends and global economic conditions observed in 2024 will persist into 2025, given the delicate interplay of multiple macroeconomic factors, including inflation, interest rate policies, geopolitical tensions and supply chain disruptions. While some economies are expected to experience a moderate recovery as inflation stabilises and central banks adopt more accommodative monetary policies, significant uncertainties remain. In particular, the renewed Trump administration is likely to introduce heightened volatility, especially in sectors sensitive to trade and the global supply chain. Despite these uncertainties, a Trump presidency is expected to present both economic opportunities and challenges. The Group remains focused and well-positioned to capitalise on emerging opportunities in high-growth segments, driven mainly by advancements in AI, automotive electrification and medical manufacturing automation. Notably, the medical segment continues to represent the largest share of the Group’s current order book, followed by the automotive and semiconductor sectors. While the medical segment is expected to continue its momentum in 2025, the Group is also seeing signs of increased demand in both the automotive and semiconductor industries.

The Group is encouraged by the upward trajectory of its FAS segment in recent years and the Group is optimistic about the continued growth of its FAS segment, driven by the increasing adoption of manufacturing automation across various industries. In particular, the medical sector is experiencing a significant shift towards automation fuelled by the rising demand for precision, consistency and regulatory compliance in medical device production and pharmaceutical manufacturing. This trend is accelerated by advancements in robotics, AI and smart manufacturing technologies which will enhance efficiency and ensure high-quality standards. Additionally, the push for automation is further reinforced by the growing need for scalable production to meet evolving industry demands. Recognising this transformative shift and by leveraging the expertise and innovation-driven approach, the Group is well-positioned to capitalise on the expanding role of automation in the medical industry field.

Besides the medical sector, the Group has also observed a growing trend in the integration of automation within the renewable energy sector, particularly in solar energy. Solar manufacturers are increasingly leveraging advanced automation technologies to enhance production efficiency and scale up manufacturing capacity. In alignment with these advancements, the Group has been securing orders from solar energy manufacturers and remains committed to supporting the industry's transition towards automated solutions. By providing its FAS offerings tailored to solar production and energy management, the Group aims to contribute to the broader adoption of renewable energy worldwide.

With the Group’s comprehensive and cutting-edge portfolio of automotive test solutions, the Group continues to actively engage with its customers in the semiconductor - automotive sector. With offerings such as front-end wafer burn-in solutions for silicon carbide (“SiC”) and the latest addition of the Known Good Die (KGD) testing solution for SiC Die-Level Testing coupled with wafer reconstruct capability, the Group is strategically positioned to support the industry's transition towards high-performance semiconductors which are critical for meeting the stringent quality and reliability standards of automotive applications. Beyond the automotive sector, data centres that cater for the AI needs are increasingly integrating SiC-based power solutions to enhance power management, reduce energy losses and improve overall operational efficiency given the uniqueness of SiC compound that offers superior efficiency, thermal performance and reliability. Similarly, the rising demand for high-bandwidth memory (HBM) chipsets is also driving the adoption of SiC solutions which enable higher power densities essential for next-generation computing and AI-driven applications. Capitalising on these industry trends, the Group continues to expand its front-end wafer solutions to include advanced wafer Automated Optical Inspection (AOI) system to reinforce its commitment to innovation and strengthening its position in high-growth sectors.

As industry shifts towards high-performance semiconductors, not only is SiC adoption accelerating across various sectors, but advanced packaging is also gaining traction as a critical component of next-generation electronics. In line with this trend, advanced packaging is one of the Group’s most promising growth areas. The Group has systematically prioritised R&D resources and capacity investments to begin its strategic venture into the advanced packaging area, focusing on cutting-edge technology testing for 2.5D substrates. This move is part of the Group's ongoing efforts to diversify its product offerings and tap into the growing demand for sophisticated semiconductor packaging technologies across various high-performance sectors. Advanced packaging, especially 2.5D and 3D substrates, is critical for applications in high-performance computing, mobile devices, 5G infrastructure, automotive systems, Internet of Things (IoT) and more. These technologies enable faster data throughput, smaller form factors and energy efficiency, all of which are crucial for next-generation applications like AI, autonomous vehicles and advanced telecommunications. The 2.5D substrate testing is expected to play a crucial role in enhancing the performance and capabilities of future generations of semiconductors thereby positioning the Group as a key player in this high growth segment.

As the Group continues to enhance its capabilities in high-performance semiconductors and advanced packaging, it is also expanding its global presence to capture new market opportunities as part of its holistic growth strategy. India has emerged as a key growth market with its semiconductor industry experiencing rapid expansion driven by the increasing activity from contract manufacturers supporting major global players. This momentum is further bolstered by a favourable investment climate and government support aimed at strengthening India’s role and position in the global semiconductor supply chain. Against this backdrop, the Group anticipates growing demand for its test handing equipment, particularly its turret test and vision handlers as the Group is poised to play a pivotal role in India’s evolving semiconductor ecosystem.

Beyond its expansion into India, the Group is also strengthening its geographical footprint in Europe and Taiwan by establishing physical presence to further enhance its technological capabilities. These strategic diversifications aim to specifically advance the Group’s capabilities and expertise in wafer-level inspection and advanced packaging testing to support the semiconductor industry’s growing demand for product quality, performance and reliability. By expanding its presence in these key regions, the Group is well-positioned to drive technological advancements, accelerate the development of next generation testing solutions and reinforce its role as a key player in the global semiconductor value chain.

While the Group has announced its proposed privatisation of Pentamaster International Limited, a subsidiary of the Company which is currently listed on the Main Board of The Stock Exchange of Hong Kong Limited (“HKSE”), this strategic corporate development does not affect its growth prospects for 2025. The Group remains committed to its core businesses and strategic initiatives while continuously driving innovation and expanding its market presence. With a solid foundation and a clear strategic direction, the Group is determined to capitalise on industry opportunities and sustain its growth momentum and such strategic privatisation allows the Group to channel its resources for its strategic business plans. Additionally, the completion of the Group’s new campus 3 production facility at the end of 2024 has significantly enhanced the Group’s capacity to undertake larger and more complex projects tailored to the evolving needs of its diverse customer base. This expanded infrastructure is set to be a key driver in accelerating the Group’s growth trajectory in the near term.