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$VITROX / 0097 (VITROX CORPORATION BERHAD)

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*VITROX 4Q24 briefing keytakes (Hybrid)*

*Date: 28 Feb 2025*

*Management: Chu Jenn Weng (CEO), Lim Kim Seng (CFO)*

*Corp Development*
- Customer Engagement: SMTA International in 2024 in US, NEPCON Asia 2024 in China.
- Agriculture Endeavour: Ranger 1$ (60-70% completion), V-Seerder (100% completion), IOT 4.0 (Still under R&D)
- Student enrolment: Diploma courses and TVET. TVET target 500 students. Diploma courses take up rate encouraging.

*Financial*
- 4Q24 Rev at RM148.8m +5% yoy, +2% qoq. PAT at RM22.3m -4% yoy, +13% qoq with 15% PAT margin. Favorable forex in 4Q24 vs 3Q23 but offset by unfav product mix.
- FY24: Rev552m -4% yoy and OAT RM89m -27%. Due to reduced demand in ABI as EMS customer such as Jabil has lower demand.
- Vitrox Agri Tech loss will be cut to half in 2025.
- FY24 PBT RM103m and adjust PBT of RM130m after adjusted higher R&D RM10m, Investment in New Venture RM9m and unfavourable products mix of RM8m.
- order paused for AI server product in the past few weeks after DeepSeek launched. RM10m AI related product should be shipped to Mexico but this Mexico customer on hold first.
- Vitrox Academy – about 200 students, expect 2028 to breakeven.
- New product: Wafer inspection MEMS speaker for PO from a US based customer.
- 4Q24 Rev breakdown: MVS-S RM14m, MVS-T RM39.4M, ABI RM93.8m and ECS RM1.0m.
- 10% growth from contribution in China. However, competitive in China is stiff.
- Rev breakdown in FY24: MVS-S 7%, MVS-T 29%, ABI 63% and ECS 1%. Strong growth in ECS in 1Q25 due to the new products.
- FY24 Rev growth across segment: ABI -14%, MVSS -20%, MVST +37% and ECS+63%.
- Service revenue: +16% yoy in FY24. Contribute 19% of total revenue. Consist software upgrade and recurring maintenance contracts.
- Machine shipment in 4Q24: MVST 28 units, AOI 93 units, and AXI 29 units.
-Geo rev breakdown: China 43%, US 14%, Malaysia 13%, Taiwan 9%, Mexico 8%, Vietnam 5%, India 3% and Thailand 2%.
- Growth wise: China and US 10% yoy, Taiwan 92% yoy thanks to AI, Vietnam 105% yoy and Thailand 98% yoy.
- Industry Breakdown for FY24: Auto 27%, Telco 21%, CE 18%, Industrial electronic 11%, Computing 8.6%, memory 4.4%, Semicon 3.5%. DC revenue park under telco.
- Inventory days goes up becoz they want to stock up as production time is longer and customer want it very fast.
- Receivables also goes up but will be coming down in 1H25.

*Business Outlook and management update*
- MVSS: Achieved RM14m in 4Q24, strong qoq. Growing demand for Vision system modules particularly for post seal inspection and wafer applications with numerous inquiries converting into orders. 1Q25 rev projected at RM12m, marking 100% increased compare to 1Q24. Competitive pricing: 20% reduction attracting strong interest from major OEM, expand market share in China and among other OSATs. Expanded into semicon Advanced Packaging Sector with VR20, the CoWoS. New venture is expected to generate few million in sales in nest 3-6 months.
- MVST: 20 machines in 1Q25 vs 28 machines in 4Q24. Demand for 40 machines in following 6 months. China contributed 65% of demand. Revenue forecast RM25-30m in 1Q25, slightly lower than revenue in 4Q24.
- ABI: RM85-95m in 1Q25 expected. RM46m backlog. Service revenue about RM20-25m in 1Q25. Shorter lead time expectation which cause their inventory go up. Temporary pause in offshore expansion by Chinese and Taiwanese CMs due to the tariff by US create uncertainties. Contribution from China about 35% of ABI total funnel. 80% of the funnel originates from Chinese EMS. Mexico continues face challenges. US side, seeing opportunities with new projects from aerospace and DC.

*Q&A*
- competitive advantage of QX series from AOI: high speed and high resolution, competitor include TRI and Omron but Vitrox claimed that their speed is 40% faster albeit pricing slightly higher, will be launched this year.
- wafer inspection competitive advantage for Vitrox – customization based on customer needs. Closest competitor: Onto?
- CoWoS advanced packaging – MVST has directly exposure on this. Contribute 30-40% of MVST revenue in 2025.
-Revenue exposure to Huawei on AI – not significant yet.
- book to bill at 1.1x.

Thanks.