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♨️ Fresh From Oven ♨️

VS meeting keytakes (Venue: Menara TA)

Date: 25 Sept 2024

Management: CW Beh, CS Chong, CS Ng, CapitalFront

Q&A

- Forex impact – 3 customers – US, Fluidra, Coffee brewer customer – revenue denominated in USD – using cost top up model during quotation. The additional cost (especially on labour cost) can only be passed on during quotation of new models. Mostly affected by top line fluctuations.
- July rate was at RM4.63/USD.
- Customer X – cost passthrough every month. Other USD customers - 3 months, 6 months and yearly.
- Illustration: Material quoted in USD, large content of customer’s AVL on stable pricing (a lot of back to back, lock in arrangement), value-add (% of material fees based on financing, labour, management fees, engineering) quoted in either USD/MYR (depends on earlier arrangement).
- Orders: Customer X – intact, 3 customers will be launching new models as well.
- No FDA as yet (but this has to come from customers), but with cleanroom.
- 65%-70% of net receivables and net payables in USD.
- Minimum wage – can be passed on, but need to absorb certain transition period.
- VS Vietnam USD3m profit. FY25 should be at USD4m profit.
- There could be a potential of RMB10m income from the leasing of VSIG Zhuhai land to customers.
- Target: FY25 revenue of RM4.8b at previous exchange rate – could see a swing of 8-10% (of RM500m). But this guidance did not take into account of new customer and Philippines contribution. Comfortable of 5% NPM.
- Hopeful to achieve NPM of 5% from new value added services, alongside forex fluctuations.
- FY24 revenue breakdown – RM1.4b customer X, RM650k Coffee brewer, RM350k pool customer, RM850m US, RM200m for customer Y, RM350m other customers, RM350m from Indonesia and China (RM50m). Average UR at 70%.
- VAS: 3rd and 4th project will be for new model (floorcare). On trial run now. Project 1 and 2 for haircare.
- Philippines – cost structure – in USD.
- No anticipatory costing, normally customers using past periods exchange rate.
- 4QFY24 NPM of 6.6% in 1st (LSR – main) and 2nd project in total contributed of net RM10m.

Thanks.