ASE Technology Holding Co Ltd

TWSE:3711

Earnings Call Analysis

Earnings Call Transcript 2018-Q1

[Kenneth Hsiang, executive]

I'm Ken Hsiang, the Head of Investor Relations for ASE. Welcome to ASE Group's first quarter 2018 earnings release. All participants consent to having their voices and questions broadcast via participation of this event. Please refer to Page 1 of our presentation, which contains our safe harbor notice. I would like to remind everyone on this call that the presentation that follows may contain forward-looking statements. These forward-looking statements are subject to a high degree of risk, and our actual results may differ materially from these forward-looking statements.

For the purposes of this presentation, dollar figures are generally stated in New Taiwan dollars, unless otherwise indicated. For today's event, I will be going over the financial results; afterwards we will have Q&A session with Joseph Tung, our CFO. Following the event, our VP in Charge of Public Relations, Eddie Chang, will be available to address the media in Mandarin Chinese.

If you would go to Page 2. So before we get into our results, I would like to spend just a bit of time to show the NT dollar, U.S. dollar exchange rate impact. There are 2 charts here, for the chart on the left you can see our year-over-year group and IC ATM revenues on a U.S. dollar versus NT dollar basis. Given our purchase orders are predominantly received on a U.S. dollar basis, we believe the 4% group and the 3% IC ATM revenue growth figures more accurately reflect our true business performance.

The chart on the right shows the impact of the NT dollar fluctuation on group and IC ATM margins. Please note the following point it may be useful for clarifying our guidance towards the end of its presentation. We approximate that for every 1 percentage point the NT dollar appreciates there is a corresponding 0.4 percentage point impact to IC ATM gross profit margins. And similarly, we approximate for every percentage point the NT dollar appreciates there is a corresponding 0.3 percentage point impact to group gross profit margins.

So here, given the year-over-year 6% NT dollar appreciation, group gross margins received a 1.7 percentage point impact, while IC ATM gross margins received a 2.6 percentage point impact. Thus in a flat NT dollar environment we approximate group and IC ATM gross margins would have been 17.7% and 23.4%, respectively. This represents a decrease of 0.3 percentage points for the group gross margins and an increase of 0.4 percentage points for IC ATM gross margins.

Q1 was a fairly typical quarter for us. Of course, there was a lot of noise during the quarter, some upward revisions of forecasts and some downward revisions. We saw supply chain bottlenecks including [ MLC ] seat shortages on our customer supply chains. We evaluated the trade challenges between sovereign nations. There really were quite a lot of noise during the quarter. We believe these items may have some potential impact on us but for the first quarter we believe the impact is just that, just noise.

The first quarter was business as usual. Overall, business remains good and we continue to see a seasonal cycle starting to build up. For the financial overview, we will again try to focus less on reciting the displayed results, which you can all read and instead focus on whether we can add any color to the information presented. For this year, we're looking to make a number of simplifications that will help focus our message.

So Page 3, group P&L quarterly. As our results reflect the first quarter reflected a typically seasonally soft first quarter, our IC ATM results were in line with our expectations. However, our EMS results were slightly behind where we thought they would be. On a fully consolidated basis for the first quarter the company delivered fully diluted EPS of TWD 0.24 and basic EPS of TWD 0.25, total revenues for the consolidated group declined by 23% quarter-over-quarter and 2% year-over-year to TWD 65 billion.

Our Packaging, Testing and EMS businesses were down quarter-over-quarter 11%, 13% and 34%, and year-over-year 1%, 11% and 2%, respectively. The sequential declines are seasonal, while the year-over-year decline is principally the result of NT dollar appreciation.

Gross profit for the group declined to TWD 10.4 billion, down with consolidated gross profit margin declining to 16%. Gross profit margin decline was in line with seasonality from a quarter-over-quarter perspective. From a year-over-year perspective, gross profit margin decline was driven principally by NT dollar appreciation. As mentioned earlier, outside of NT dollar appreciation, gross profit margin would have declined 0.3% year-over-year principally, the result of lower gross margins from our EMS business.

Operating expenses were TWD 6.1 billion during the quarter, down 14% quarter-over-quarter and 10% year-over-year. Our operating expense percentage was 9.3% increasing 0.9 percentage points from the fourth quarter and down 0.8 percentage points year-over-year. Operating profit for the first quarter declined to TWD 4.3 billion with operating margins declining to 6.6%.

During the first quarter we had a net nonoperating loss of TWD 0.5 billion as versus a net nonoperating gain of TWD 0.2 billion the previous quarter. The current quarter's nonoperating gain includes the following, net gain related to foreign exchange and hedging activities of TWD 0.1 billion, net interest expense of TWD 0.4 billion, and loss from SPIL net of purchase price accounting of TWD 0.3 billion.

The pretax profit for the first quarter was TWD 3.8 billion. Income tax expense was TWD 1.4 billion in the first quarter. During January of 2018 Taiwan passed legislation which increased corporate tax rates by 3 percentage points, as a result we recognize the TWD 0.7 billion impact for the revaluation of our net deferred tax liability position in the first quarter of 2018. Net income for the first quarter ended at TWD 2.1 billion.

Page 4, IC ATM P&L. Our first quarter IC ATM net revenues were TWD 37.1 billion, from a sequential perspective, revenues were seasonally down 11%; from a year-over-year perspective, IC ATM revenues were down 3%. However, as mentioned earlier on a US dollar basis year-over-year revenues would have been up 3%. Revenues for our IC Packaging and Testing businesses were sequined down 11% and 13%, while declining 2% and 11% year-over-year, respectively.

Revenues for our Direct Materials business increased 6% sequentially and 12% on a year-over-year basis. From a year-over-year perspective our test business declined 11% principally because of NT dollar appreciation and increased consigned tester business.

We ended the quarter with gross profit of 7.7 billion declining 29% sequentially and 13% year-over-year. Gross margins declined 5.2 percentage points sequentially and 2.2 percentage points year-over-year. Sequentially, the first quarter gross margin decline was the result of typically soft seasonal loading. From a year-over-year perspective the gross margin decline was principally the result of NT dollar appreciation.

As mentioned in the earlier slide, we estimate that on a constant currency perspective year-over-year gross margin for our IC ATM business would have improved to 0.4 percentage points to 23.4%. Operating expenses of TWD 4.3 billion declined TWD 0.6 billion both sequentially and year-over-year. Operating margins declined 5.2 percentage points sequentially and 1.2 percentage points year-over-year. The annual decline in operating margins is again attributable to NT dollar appreciation.

Page 5, Packaging. During the first quarter our Packaging revenue declined 11% sequentially, it was down 2% year-over-year to TWD 30.3 billion, on a US dollar basis package -- Packaging revenue was up 4% year-over-year. Our Packaging gross margin declined by 5.1 percentage points sequentially and was down 1.9 percentage points year-over-year. The sequential margin decline was the result of lower seasonal loading.

The year-over-year decline is primarily attributable to NT dollar appreciation and a higher raw material product mix. During the quarter, capital expenditures were USD 146 million.

Wafer bump, fan-out and copper pillar equipment was at USD 81 million; and common SiP and wirebond equipment at USD 65 million. We exited the quarter with a total of [ 16,050 ] wirebonders in operation adding 66 and disposing 127.

8-inch wafer processing capacity increased 10,000 wafers to 114,000 wafers per month, and 12-inch wafer processing capacity including bump, fan-out and copper pillar, remained at 128,000 wafers per month.

Page 6, during the first quarter, Test revenues were sequentially down 13% to TWD 5.7 billion. Year-over-year Test revenues were down 11%. On a US dollar basis, year-over-year Test revenues were down 5.1%.

On a sequential basis, the revenue decline was principally the result of seasonal loading. On a year-over-year basis, the revenue decline was principally the result of a large customer converting into a consigned tester business model.

Under a consigned tester business model, our customer owns the tester and bears substantially more asset and business risk. However, this results in lower revenues for our Test business.

Test gross profit declined TWD 0.7 billion sequentially. Test gross margin was down 5.9 percentage points sequentially and 2.7 percentage points year-over-year.

Gross margins were sequentially, principally –- were down sequentially principally as a result of seasonal decline during the quarter and a semi-fixed cost structure.

Test gross margin declined year-over-year, principally as a result of NT dollar appreciation. Outside of NT dollar appreciation, our test gross margins would have instead been improving 2.9 percentage points year-over-year.

Overall, cost of services for Test declined TWD 0.2 billion sequentially and TWD 0.3 billion year-over-year to TWD 3.9 billion. Our blended test utilization rate on a percentage basis decreased into the low 70s.

Capital expenditures for the test business was USD 54 million in the first quarter. During the quarter, we also added 156 and disposed 115 testers, ending with 3,801 testers.

Page 7, sequentially, for the first quarter, our market segment movements had our communication segment in its seasonally soft quarter decreasing to 46%.

Our automotive, consumer and other segment increased 2 percentage points to 41%. Our computer segment stayed unchanged at 13%. Directionally speaking, there is really not anything particularly surprising here.

Page 8. Here, you can see the results from our EMS business. During the first quarter, we had revenues for our EMS business unit of TWD 28.7 billion. This is sequentially down 33% and down 2% year-over-year.

Even though the first quarter is the start of our traditional slow season our EMS revenues came in somewhat behind where we expected. The revenue decline is tied to typically seasonal products we serve; however, the magnitude of the decline was somewhat unexpected.

We believe that this, at least in some part, is caused by end-market issues. Our gross profit declined 33% sequentially and 13% year-over-year to TWD 2.7 billion. EMS gross margin edged up to 9.4% from 9.2% sequentially. The increase is primarily the result of product mix differences.

Page 9. Here, you will note that our product segments within our EMS business. Our consumer segment declined 8 percentage points made up by gains in computing, industrial and automotive. Our communications segment remained flat.

Page 10, balance sheet. At the end of the quarter, we had cash and cash equivalents and current financial assets of TWD 53.7 billion. Our interest-bearing debt decreased from TWD 76.9 billion to TWD 74.5 billion at the end of the quarter. Total unused credit lines amounted to TWD 154.3 billion. Our EBITDA for the quarter was TWD 11.9 billion.

Page 11, capital expenditures, machinery and equipment capital expenditures for the first quarter totaled USD 209 million, of which USD 146 million was used for packaging operations, USD 54 million for testing operations, USD 7 million for EMS operations and USD 2 million for interconnect materials and other uses.

As we mentioned during our last earnings release, a sizeable portion of CapEx in excess of USD 100 million originally scheduled for 2017 was deferred into 2018. With that said, from a standalone entity perspective, we still continue to expect our 2018 capital expenditures to continue our pattern of being above previous year’s CapEx, but being below depreciation and amortization, albeit, in the higher end of this range. This of course speaking is about the standalone entity.

In US dollar terms, EBITDA for the quarter was USD 405 million. Before we get into guidance, just a few logistical matters. This earnings release will be the last one done as ASE Group, the standalone entity. Next quarter, our results along with the results of SPIL will be combined into ASE Industrial Holding Company. Taiwan ticker 3711, ASE Holdings for short.

For every 2 old shares of 2311, our common shareholders will receive 1 new share of 3711. From a Taiwan legal entity perspective, we will be part of a new legal entity without a contiguous history. As such, the ASE Holdings entity will have only existed for 2 months when it makes its second quarter earnings release at the end of July.

As you may know, we also have an American Depository Receipt in the US. Our ADR will continue to trade on the NYSE, under the ticker ASX.

Each ADR share originally represented 5 common shares of 2311. On April 30, each ADR will split to become 1.25 shares while simultaneously each ADR share will become to represent 2 common shares of 3711 ASE Holdings.

This split is necessary to accommodate fractional share issues. From the US legal entity perspective, the US SEC considers the ADR as an ongoing entity and thus will retain our historical, financial information and as of May become ASC Industrial Holding Company.

This development may inconvenience our shareholders, however, ASC Holdings will provide to the best of its ability, a pro forma set of results at the IC ATM level.

However, it may be limited in its ability to provide pro forma information at the detailed business unit level, Packaging and Testing for example. Please bear in mind that recreating pro forma sets of consistent financial information between 2 separately functioning legal entities as required by MOFCOM can be a large task, which will require significant material estimation and time, while providing significant safeguards.

From the reporting perspective, in June, by legal requirement ASE Holdings, SPIL and ASE standalone will each release their main monthly sales.

On July 27, ASE Holdings expects to host its first earnings conference. ASE Holdings does not expect to release any other financial information during this time.

Now onto guidance for the standalone company, non ASE Holdings. Looking out into the second quarter, we still see a lot of moving pieces. However, from our perspective, we see a typical second quarter uptick, each segment has its own opportunities and challenges, but by and large we still see broad based strength across all segments. We continue to be positive on the overall impact of high performance computing including cryptocurrency on our business. We do believe that we can achieve healthy year-over-year growth in the second quarter.

The geopolitical environment still appears to be creating volatility in foreign currencies around the world. The NT dollar is continuing to be impacted. We don't believe we can properly forecast the impact of such movements. And as such we have provided our business guidance outside of such potential impacts.

So for our guidance here, IC ATM in U.S. dollar terms, IC ATM second quarter business should be above second quarter 2017 levels but below fourth quarter 2017 levels. Excluding foreign exchange impact, IC ATM first quarter gross margins -- 2018 gross margins should be similar to second quarter 2017 levels.

EMS, second quarter 2018 business should be between second quarter 2017 and third quarter 2017 levels. And EMS second quarter 2018 gross margin should improve slightly from first quarter 2018. Yes, that's second quarter gross margins not first quarter gross margin, so I think you guys read that. Questions?

[Operator]

First question comes from the line of Randy Abrams from Credit Suisse.

[Randy Abrams, analyst]

My first question, just want to get a profile for just the ASE business, I guess the demand outlook how you're viewing like any changes, like if you took the communication space and in then the other end markets like if you've seen any kind of movements within that. And for the EMS business, I guess it was slower start to the year, if you could give an outlook for how EMS is shaping up? And I guess for the SiP business in particular how you're viewing this year now versus last year, but if it's still could stay stable or if that outlook has changed? And if you could give an update maybe on projects within that, if any new projects could start to contribute?

[Joseph Tung, executive]

I think in terms of IC ATM in second quarter we're seeing again a broad base type of growth except with various strength, I think in the second quarter we will be seeing computing as well as industrial consumer will be relatively stronger than the other segments. As far as the EMS business is concerned we're still confident that we will have some growth this year. And in terms of margin we will -- always continue to maintain our gross margin level at the last year's level. In terms of SiP business, I think right now what we're seeing is a stable year, although the eventual results will have to depend on the end market sell through situation.

[Randy Abrams, analyst]

And could talk on the cost side -- there's been headwind of currencies the past year, if you're seeing any change on cost pressure for things like materials and substrates and if any ability to firm up pricing to pass on some of the costs? And then also on the bottlenecks where there's been some passive components and a little bit of equipment I guess if you're seeing those bottlenecks and any tightness you're seeing in the business right now?

[Joseph Tung, executive]

In terms of passive components we do see some negative impacts on our overall business, although it's not a [ gaining ] factor for the year. Right now, I think the, as far as IC ATM is concerned I think the impact is minor, for EMS it's a little bit larger but then you still, at the management level, I think being, in terms of the company size I think we, relatively speaking, still, we can still -- we can obtain a more stable type of supply situation. So yes, there will be some negative impact particularly a small impact on the margin but in terms of the magnitude of the impact is both manageable as well as in terms of ICM is really minor.

[Randy Abrams, analyst]

And from a ASE perspective with SPIL coming in and you'll have access to their facilities and also their teams, do you have a view yet on the core ASE expense, growth and how you're viewing CapEx, if you already see a way to maybe slow those down not bringing in all those resources?

[Joseph Tung, executive]

We're still being required to maintain 2 separate operations without too much integration at least for the next 18 months before the restriction is expired. Therefore, the -- I think -- I don't -- I think at the operating level there is not going to be too much integration to, in the foreseeable future, at least for the next 18 months. But in terms of R&D, in terms -- some of the -- with legitimate business reasons, there is some flexibility in terms of aligning our capacity. So I think some of these savings or synergies can be created in those areas.

[Kenneth Hsiang, executive]

We can now take questions from the floor. Name and company, please.

[Rick Hsu, analyst]

Rick from Daiwa Securities. I'm kind of getting to be too old to -- can you go through your previous housekeeping update into a number of the wirebonders, how many you had at the end of first quarter and tester as well?

[Joseph Tung, executive]

We have all together 16,000 wirebonders, we added 66 and exited 127 bonders in the quarter. Tester wise we have altogether 3,801 testers.

[Rick Hsu, analyst]

Okay. So wirebonders is 16,000?

[Joseph Tung, executive]

16,000, yes.

[Rick Hsu, analyst]

Okay. And what's your utilizing rate for wirebonding?

[Joseph Tung, executive]

For wirebonding, in second quarter was about mid-70s, advance packaging at mid-70s as well, testing a low 70s and substrate at mid-70s.

[Rick Hsu, analyst]

Substrate at mid-70s, this is for Q1 right?

[Joseph Tung, executive]

That's for Q1.

[Rick Hsu, analyst]

All right. And what about the number of wirebond and tester for Q2 based on your plan and also the loadings?

[Joseph Tung, executive]

We will be adding very few bonders for the year, I think we can count in 100s, maybe. In terms of utilization in the second quarter because of the unit -- the overall growth in revenue, in terms of wirebonding utilization it would be around 80s.

[Rick Hsu, analyst]

And tester?

[Joseph Tung, executive]

For advance packaging it will also grow to about low 80s and testing to high 70s.

[Rick Hsu, analyst]

And a second question is, when I look at your IC ATM gross margin decline Q1 of 5 PP roughly. It looks to me it's kind of more than seasonal, can you sort of break it down into a component of impact; how much frontloading, how much from the currency change, how much from material costs, and how much from some -- any kind of critical components?

[Joseph Tung, executive]

I think about -- mostly is from loading, I guess about 0.5% maybe coming from the currency.

[William Lu, analyst]

Bill Lu from UBS. Thanks very much for taking the questions. I should know this, but I can't remember, it's been a while. When customers do consignment testers, what's the impact to revenues and margins?

[Joseph Tung, executive]

Once we -- we don't own the machines and we don't carry the depreciation of such machines and then our price will be based on the costs without depreciation costs. It will still be on a cost plus type of arrangement, but just the cost doesn’t include depreciation. So if you take that part of the costs out then overall revenue from a particular machine will be lower.

[William Lu, analyst]

But shouldn’t that make the gross margin percentage higher?

[Joseph Tung, executive]

It depends on how much lower your price gets. Theoretically, it shouldn’t have that much of an impact on the margin itself.

[William Lu, analyst]

I guess I am just thinking of a value that you are adding, right, the gross profit is the same, but the ASP is lower that means the percentage should be higher.

[Joseph Tung, executive]

Not necessarily, because of the -- a lot of the overhead or the operating expenses still remains and some of the -- although the machine is down, the revenue is lower but then the -- that part of the costs remains the same, the overhead.

[William Lu, analyst]

Can you tell me, what the cryptocurrency was as a percentage of sales?

[Joseph Tung, executive]

It will be in the low single digit.

[William Lu, analyst]

Still low single digit. What's the outlook for the rest of the year?

[Joseph Tung, executive]

I am sorry.

[William Lu, analyst]

What's the outlook for the rest of the year?

[Joseph Tung, executive]

It could be mid.

[William Lu, analyst]

So it sounds to me like a TSMC strategy in crypto, if they have any excess capacity to give to the crypto guys, but not really aggressively building for the crypto guys. Is that the same as your strategy?

[Joseph Tung, executive]

That's the same -- I think the overall business is kind of opportunistic and the packages that required is still typical flip chip type of packages so we can use leverage on our existing capacity without adding too much.

[William Lu, analyst]

Last question. TSMC last week said that their long-term growth outlook is the same but the portion from communications is smaller, the portion from HPC is bigger, right. How does that impact your business and a lot of these HPC customers are using advance packaging 2.5D. Can give us an update there as well?

[Joseph Tung, executive]

Well, I think the business composition is a bit different and I think the business characteristics is also a little bit different. But it really depends on the second half end demand or the product sale through. So I think communication will continue to be the largest portion of our overall business. But in terms of the actual percentage changes it really depends on the second half performance of each segment.

[William Lu, analyst]

A quick update on advance packaging, 2.5D packaging.

[Joseph Tung, executive]

Anything you want to add?

[Kenneth Hsiang, executive]

Our definition of advanced encompasses a little bit more than just 2.5D packaging.

[Joseph Tung, executive]

Are you referring to [ Fan ] now?

[William Lu, analyst]

Well I mean however you want to define it, just advance packaging in general would be great.

[Joseph Tung, executive]

For us it's flip chip bumping wafer level packaging. And SiP.

[Kenneth Hsiang, executive]

Also Fan.

[William Lu, analyst]

Yes, sorry maybe I'll be a little more specific, if you look at these GPUs and such they do use a lot of TSMC [ co-walls ] right. How are you going to capture that opportunity?

[Kenneth Hsiang, executive]

We've offered -- this is our 2.5D solution. We have offered 2.5D for a significant period of time. I think our AMD SIP project was well talked about. That was a 2.5D type solution. I think we will continue to offer that. And I think -- but just talking about it as the standalone entity at this point, may not just be proper, but we're definitely focused on it. Do we have the line working? All right, any more questions from the floor.

[Sebastian Hou, analyst]

I am Sebastian from CL. The first question is for Bill's questions on the crypto, is that -- just want to clarify is that percentage contribution is for IC ATM or…

[Joseph Tung, executive]

IC ATM.

[Sebastian Hou, analyst]

IC ATM, okay. Second question is the earlier -- can't talk about the broad based trends seen in the second quarter, but the guidance on the IC ATM if I calculate it right it seems to be flat quarter-on-quarter? No, I calculate wrong?

[Joseph Tung, executive]

No.

[Kenneth Hsiang, executive]

There'll be some growth, yes in the second quarter.

[Sebastian Hou, analyst]

Above second quarter '17, below 4Q '17, in U.S. dollars terms. Okay. I will cover that again. So you talk about the strength in computing, consumer, industrial, but didn't talk about communications, so the communication is the weakest?

[Joseph Tung, executive]

As compared to the other two, yes, it's --compared to the -- in the second quarter although there is still growth.

[Sebastian Hou, analyst]

So even the weakest still grow. So everything's growing.

[Joseph Tung, executive]

It's growing, it's broad based growth with various [ brands ].

[Sebastian Hou, analyst]

Okay. And when you look at, I think in the last quarter, last conference, I think I remember the company was -- it sounds pretty upbeat about full year this year, talk about the higher CapEx, talked about the opportunity you seize for this year and how do you -- what's the difference now or is there any difference or is still the same thing 3 months past.

[Kenneth Hsiang, executive]

No. We're still very excited about the year. Growth prospects are still fairly promising.

[Sebastian Hou, analyst]

The excitements mainly come from, which application particularly.

[Kenneth Hsiang, executive]

I don't know if we single that out at this time. You're asking beyond the coming quarter and then…

[Sebastian Hou, analyst]

No, full year.

[Kenneth Hsiang, executive]

I understand but -- I don't know how you're going to get back to that later on, because this is the last one that we're doing as a standalone entity.

[Sebastian Hou, analyst]

Yes, I'm just asking about ASE standalone.

[Kenneth Hsiang, executive]

They are actually fairly broad-based actually for us, across the board.

[Joseph Tung, executive]

Well I think, first of all we are still confident that this year we're going to experience some healthy growth. That growth can just really go broad-based. Although as I said it is really same as second quarter, there will be various strengths among different sectors. At this point, I think, at least for second quarter we're seeing that communication is not as strong as the other sectors, but going into the second half it really depends on the end product sale through and how the product is being launched to see whether the relative strengths will be different from, the (inaudible 0:09:53.0) strengths in profile would be different from the first half of the year. But overall, we are still pretty optimistic about the whole year.

[Sebastian Hou, analyst]

Okay, and another follow-up on the crypto question, is that the -- earlier, Joseph, you mentioned that right now is both single digit percentage of IC ATM. And full year is mid-single?

[Joseph Tung, executive]

Like I said, this thing is really opportunistic. I think even now, the overall situation that we're seeing is less than what we were expecting in the beginning of the year. So it fluctuates quite a bit. So it's very difficult to make any hard predictions on where this business exactly is going to go. All we can say is that even with a more conservative view on this business, we're still seeing quite a bit of growth in this area.

[Sebastian Hou, analyst]

Now the reason I'm asking is that if the full year is about mid-single digit, and usually you have a stronger second half from the first half, which mean the second half it going to be the high-single digit, but you make it like missing a digit for full year.

[Joseph Tung, executive]

That seems to be the case that is -- where we're seeing it now, yes.

[Sebastian Hou, analyst]

So you see the stronger growth in second half than the first half. And this is just for ASIC, not including GPU.

[Joseph Tung, executive]

Yes.

[Kenneth Hsiang, executive]

Any other questions from the floor? Do we have a line? No.

[Joseph Tung, executive]

I hope this is recorded, now.

[Kenneth Hsiang, executive]

Yes, it's recording. No questions from the line? All right thank you very much.

[Joseph Tung, executive]

We'll see you next quarter with a different presentation.