Analogue Holdings Limited (1977) Earnings Call Transcript & Summary

Good morning, ladies and gentlemen. Thank you for joining the 2023 Interim Results Investor Virtual Meeting of Analogue Holdings Limited. Today's meeting will be conducted in English. We will begin with the presentation by the management followed by Q&A. You are welcome to turn on your camera so that our management can greet you face to face. Before we start, let me introduce the management team to you. They are Dr. Otto Poon, Chairman and Executive Director; Dr. Kin Mak, Deputy Chairman and Non-Executive Director; Mr. Raymond Chan, Chief Executive Officer and Executive Director; Mr. Victor Law, Executive Director; Mr. Brian Cheng, Executive Director; and Mr. Peter Cheng, Chief Financial Officer. May I now invite Dr. Poon to give you an overview of Analogue's results. Dr. Poon, please.

Good morning, ladies and gentlemen. Thank you for joining our 2023 Interim Results Investor Presentation. I'm going to share with you an overview of our company. Other members of the team will then walk you through our financial and operational highlights for the first half of 2023, followed by our outlook and growth strategies. Analogue Holding Limited is a leading electrical and mechanical engineering service provider, headquartered in Hong Kong with over 45 years of operating history. We provide electrical and mechanical engineering and technology services across our 4 business segments, namely: Building Services; Environmental Engineering; ICBT, which stands for Information, Communications and Building Technologies; and Lift and Escalators. Our customer portfolio covers both private and public sectors in different countries and regions. We set ourselves apart from peers by striving for innovation as reflected by the 61 patents and designs, we have obtained internationally. Sustainability is one of our core values. We strive to create, share the value for community through ESG initiatives. Following the process we achieved last year, we are pleased to have maintained business growth with high value contracts in hand in the first half of 2023. During the reporting period, we achieved significant progress in a number of areas with innovation as one of our core values, we have invested in smart building technologies and introduce innovative solutions to satisfy our customers' needs for digital transformation in a timely manner. Internally, we have implemented this industry governance practice through reorganization, new personal appointment, new develop procedures and rigorous staff training to enhance operational and management effectiveness. Overseas expansion has also been high on our agenda as we continue to explore potential business opportunities and equity partnership to create synergy among our businesses. We are revitalizing an industrial building in Guangzhou, which has been named ATAL Tower to become our new headquarters. This is the move to promote synergies across our business units and increase productivity. The integrated headquarters scheduled to become operational in the second half of -- the second quarter of 2024. Our CFO, Peter, will now present to you the group's financial performance in the first half of 2023. Peter, please.

Thank you very much, Dr. Poon and good morning, everyone. I will run through the financial performance of the group. The group achieved order intake of HKD 3.5 billion during the reporting period, the first 6 months of 2023, with contract in hand at HKD 12.3 billion. This is a growth from December 31, 2022, at HKD 11.7 billion. The revenue was HKD 2.8 billion during the period of 6 months in 2023. Net profit was reported at HKD 237.5 million. The significant increase in profit is mainly attributable to a dilution gain of HKD 124.1 million upon completion of a private placement by an associate of the company of the group, compared with profits in the corresponding period in 2022, which has taken into account special provisions of HKD 60 million made for the group potential litigation liabilities, which have been dealt with and resolved. The group maintained a strong financial position, with cash balance amounted to over HKD 835 million, and gearing ratios decreasing to a percentage of 12.2%. As we're committed to reward our shareholders, our dividend payout ratio remains at a high level of 50%. The next slide highlights our key financial data. Although our revenue decreased by 6%, which is mainly due to the decrease in revenue of our Building Services segment, which our -- my colleague, Mr. Brian Cheng, would discuss later, which is partly offset by the increase in revenue of our environmental engineering segment. Again, that will be addressed in more details later. Gross profit maintained at 16% at a similar effort as the last year, HKD 453 million. Profit attributable to owners of the company increased by 300% with reasons already -- we already talked about in the previous slide. Basic earnings per share increased to HKD 0.17, representing a growth of nearly 300%. Again, this has already explained in the previous slide. The Board based on the payout ratio of 50% has declared an interim dividend of HKD 0.8052 (sic) [ HKD 8.52 ] per share. As a group, we maintain solid performance across our business segments. Business Services continue to be the primary revenue driver and Environmental Engineering segment delivering a notable 24.6% revenue growth for this period on period. In terms of project nature, contract works remain the key contributor for revenue, while maintenance works recorded a significant revenue growth of just under 23% for the same period in comparison. That strengthened our recurring revenue streams. Revenue from sales of goods maintained at a similar level at the corresponding period last year. On the next page, let me just try to highlight some of the main items. I think the main one is the cash -- the bank balance and cash. We are at HKD 835 million in comparison to at the end of the year, HKD 976 million at 31st of December 2022. And the other point I would like to highlight is that our gearing ratio is still at a very manageable level at 12.2% and is low in comparison to other competitors or peers in our sector. So on the next page, then we quickly talk about our dividend payout record since listing in 2019. The interim dividend for the first half of 2023 is HKD 0.852 (sic) [ HKD 8.52 ] per share, maintaining our dividend payout policy at no less than 50%. So at this point, I'll pass on to Brian, to share with you our business highlights in business -- in Building Services.

Thank you, Peter. Good morning, everyone. I'm sharing with you the performance of our Building Service segment. It continued to contribute the largest revenue for the group, with contract in hand valued at HKD 6,115.3 million. Segment revenue was HKD 1,748 million, strengthened by an increase in new maintenance contracts secured in the reporting period. Our Building Services segment provides one-stop electrical and mechanical engineering service to clients from diverse set up. Consistent with our emphasis on embracing new technology, over 50% of our building service project has adopted innovative technology such as building service -- building information modeling, BIM, design for manufacture and assembly, DFMA, and multitrade integrated mechanical, electrical and plumbing, MiMEP, for higher efficiency. We continue to invest in construction technology to enhance productivity, safety and quality. Algorithm were also developed for each of the mechanical, electrical and plumbing disciplines to enhance accuracy and speed. In terms of new market, we see huge potential in data center development as industrial -- industry in Hong Kong embrace digitalization. Our data center team has secured a higher order intake value HKD 608.7 billion and commenced a number of large-scale data center project for a major data center service provider in Hong Kong. Leveraging our significant growth in a number of large-scale projects in Macau, we are executing a major contract for a sizable hotel development. We also see an increasing contribution to revenue from our new business model as new maintenance contract intake value rose by HKD 313 billion to HKD 548.6 billion. Here are some of the significant projects for our Building Service segment, the reprovisioning of Fu Shan Public Mortuary, the commercial development and new [indiscernible] development and also [indiscernible]. We are entrust with several university campus development, including the United College [indiscernible] Resident Student Hostel at [indiscernible] campus at CUHK, and also the capital development [indiscernible] roadside of Hong Kong U. Maintenance contracts have continued to strengthen our recurring revenue streams, including the term and maintenance contract from the Hong Kong Housing Authority. We also take part in development of North Runway modification work, which is part of the Hong Kong International Airport Three Runway System project. Our data center has commenced works of various large-scale data center project for Hong Kong major data center service provider. We are also working on signature projects in the Greater Bay area. After completing Phase 1 of the new world-class facility of the Hong Kong [indiscernible] Red Cross project in Guanzhou, we have successfully secured the project for Phase 2 expansion of this facility. Others [indiscernible] project, including the Galaxy Hotel [indiscernible] in Macau. I will pass on to Raymond who will share with you the performance of other business segment.

Thanks, Brian. Good morning, everyone. I'm going to walk you through the performance of 3 business segments, namely: Environmental Engineering; ICBT, which stands for Information, Communications and Building Technologies; and the last one, Lifts and Escalators. For Environmental Engineering segment, we have contract in hand value at HKD 4.6 billion. We achieved significant revenue growth of 24.6%, reaching HKD 623 million. Our environmental engineering segments offers total solutions for environmental engineering facilities, including water, wastewater, sludge, solid waste and gas treatment. We continue to develop advanced technologies, such as difficult treatment and our award-winning sewage treatment solution called ATAL Multistage Flocculation Sedimentation III, a sub name is AMSM III. For the new market, the tendering activity outside Hong Kong and Mainland China including water and waste water treatment works in Philippines and Singapore. We are keen to explore new business models through public private partnerships for "One Belt One Road" projects, and offering engineering, procurement and construction, EPC, and turnkey solution to enhance the group's competitiveness. We have been adopting green funding to support our progress in delivering quality environmental solutions and that benefit the community. Some of our signature projects include the reprovisioning projects starting with a water treatment plant, South Works. The term contract for the inspection overall and testing of M&E installation and Stonecutters Island [indiscernible] the upgrading of the [indiscernible] and disposal facility to accommodate the [indiscernible] island's population growth and development needs and the O.PARK1, the first organic resources recovery center in Hong Kong. Major signature projects include the design, build and operation of food waste treatment facility at starting sewage treatment works, the [indiscernible] territory landfill gas Phase II development and the [indiscernible] treatment plant for [indiscernible] territory landfill extension. Recently, we also -- the group's 5-year maintenance contract for Kazuki power station and [indiscernible] power station has been awarded in [indiscernible] energy contract for the year. Our award-winning and patent all-in-one wastewater treatment system, ATAL multi-stage Flocculation system -- Sedimentation III has been applied in sewage projects in Mainland in China. For our ICBT segment, contract in hand among HKD 940 million, revenue increased by 2.5% to HKD 310 million. Our ICBT segment is committed to driving transformation of Hong Kong into a smart city and smart economy by offering green and intelligent building solutions. These solutions indicate a wide range of information and communications technologies including AI-enabled Digital Twin. Energy and management technologies, ESG dashboards, IEQ, indoor environmental quality management, robotic solutions and Smart Lampposts. As for new business model, we adopt a subscription-based SAAS model for our energy and technology business and deployed digital technologies to enhance our maintenance service capabilities. We continue to cooperate with renewed hardware and software partners, universities and research institutes to cater for the market's increasing demand for specialized solutions. Some of our signature projects include a contract for a comprehensive solution of smart building platform for the proposed world-class mark office building in Central. The installation of our building management system, Internet of Things, IoT, and energy analystic system in a series of important REITs shopping malls, and IoT-based smart wholesale solution for the new student residents at Hong Kong U and a multifunction smart Lamppost [indiscernible]. The adoption of our integrated building management system IoT, ELV, and ICT system in a world-clas smart office and commercial building in Causeway Bay. Our retail analytic technology was adopted by one of the biggest shopping mall in Tai Wai, highlighting our state-of-the-art security solutions. Moving on our Lift and escalator segment. Our contract in hand reached HKD 586 million, representing a 15.7% increase year-on-year. Revenue was HKD 160 million with maintenance contracts being the major revenue contributor. Our Lift and Escalator segment provides one-stop solution for the design, manufacturing, sales, installation, maintenance and modernization of lift, escalator and moving walkways. Anlev is our group's global brand of lifts, escalators and moving walkways, is a leading Lift and Escalator contractors, which has been awarded the Safety Star and 5 Service Quality Star rating by EMSD for 42 consecutive quarters. In terms of new technology, we have launched the Anlev predictive maintenance and remote monitoring system for Lifts and Escalators. We have a wholly-owned subsidiary, Anlev UK Limited in the United Kingdom and an associated [indiscernible] the U.S. market. With our successful track record, we have secured multi-strategic orders in 2023, ranging from mixed-use residential building in Canada, public transportation in Mexico, private housing in Singapore and prestigious government offices in Hong Kong and also other orders in Mainland China. We will continue to seek new distributor in U.S., Europe, Middle East and Southeast Asia as part of our global expansion plan. To support future growth, we are strengthening our maintenance service capabilities and exploring synergistic business partnership to further expand our rich and create new revenue streams. One of our signature project in Hong Kong is essential to meet Naples escalator and walkway system. They decide and construction of a joint user government office building in [indiscernible]. Contracts have been secured for the provision of universal accessibility facilities that could be elevated walkways and subways in Hong Kong. In Mainland China, we secured a construction contract for elevator with construction project in [indiscernible] and visitor center in low square of [indiscernible] south high-speed railway station. In overseas markets, and U.K. has finalized the order for the icon and prestigious residential project Victoria [indiscernible] in Manchester in U.K. Strategic orders secured by Anlev include a mixed-use residential building in Canada. We have also secured a number of residential and heavy-duty lifts contracts in Singapore. We have established our place in Brazil and Mexico with contracts secured in the mass transportation services in hotel industry, respectively. Our maintenance service cover all 4 business segments and serve both public and private sectors. A strong recurring revenue of HKD 565 million was generated by our maintenance service in the first half of 2023, representing a nearly 23% increase year-on-year and contributing close to 20% of the group's total revenue. Some of the key contracts include 3-year term contract -- maintaining contracts secured from the Hong Kong Housing Authority for fire service installation and water supply system in a number of districts. A 4-year term contract for maintenance and main power supply and distribution equipment for Hong Kong [indiscernible] region. Contracts for maintenance service of building management system for [indiscernible] IFC and IFC Mall and 3 years term contract -- maintainance contracts with essential to meet Naples escalator and walkway system. That concludes my part. I will pass on to Victor to tell you the latest development of our new headquarters, ATAL power.

Thank you, Raymond. We are [indiscernible] industrial building is quite strong with the aim of utilization as the headquarter of our operation units. The revitalized building, which has been named ATAL Tower, we improved operation and facilitate collaboration within teams to provide -- to promote synergies and increase productivities. The workplace design of ATAL Tower follows 3 major principles: connectivity, flexibility and sustainability. It will be equipped by a wide range of green and intelligent building technologies to improve energy, efficiency and the comfort of our [indiscernible]. We will deploy our proprietary smart building platform, which connects all building systems and device with a sensor network. That is backed up by pioneered technologies, such as Digital Twin, IoT, AI, [indiscernible] machine learning and big data analytics. We also adopt BIM in the planning, design, construction, operation and maintenance of ATAL Tower. During the construction stage, we will adopt smart and green construction technologies to optimize resources use. Such [indiscernible] will allow ATAL Tower to obtain a green building certification under BIM [indiscernible] which will attest our commitment to sustainability. The integrated headquarters are scheduled to become operational in the second quarter of 2024. I will now pass on to Kin to share with you the market outlook and our growth strategies.

Thank you, Victor. The business outlook for the group is expected to be positive as we see high market demand and growth opportunities across our different market segments as reflected in our strong tender activities throughout 2023. In Hong Kong, we expect to see an increase in construction works in both the public and private sectors. As the total construction output in Hong Kong is projected to reach approximately HKD 300 billion annually in the next 10 years, the government also planned to increase its annual capital works expenditure to over HKD 100 billion in the coming years with a focus on investing in infrastructure and housing. In particular, significant investments have been made in housing and infrastructure, such as the North metropolis and Kau Yi Chau Artificial Islands. The government has also announced its plans to build 30,000 Light Public Housing units. These initiatives aim to make affordable housing more accessible and promote sustainable urban development in Hong Kong. While opportunities are ample, our industry has been facing an ongoing manpower shortage. To tackle this issue, the government has implemented several measures, including labor importation and improvements to the supplementary labor schemes, coverage and operation, ensuring that businesses have access to the necessary workforce to meet their needs. As mentioned by Brian earlier, we see huge potential in data center development. While Hong Kong remains one of the most attractive locations for data centers in the Asia Pacific region. Government is committed to implementing 100 additional new digital initiatives by 2025 with a focus on increasing the annual usage of open data. This has led to increasing adoption of cutting-edge technologies like digital twin, AI, robotic solutions IoT, big data and data analytics across many industries, especially the data center sector. As a leader in this sector, the group is continuously adding new capabilities and expanding our market reach to serve new customers and strengthen our competitive edge for the future. To maintain our market-leading position, we will continue to forge ahead with our 3-pillar approach that focuses on new technology, new markets and new business model. We'll continue our investments in new technologies such as digital twin, IoT, AI and big data analytics as well as in BIM, MIC, “MiMEP and other construction technologies and robotic solutions that will enhance efficiency. Our strategic aim is not just to compete in existing markets, but to create new market segments for higher growth and profitability. In terms of new markets, we will continue our course of global expansion, leverage our existing presence in overseas markets to further expand our reach and create new revenue streams. We have recently expanded our business operations through engaging in business development activities in new potential markets, such as participation in exhibitions, we'll also continue to explore opportunities and collaborations that align with our strategic goals and values, enabling us to provide exceptional value to our customers and stay ahead of the competition. Adopting new business models such as synergistic partnerships is another way to create new market segments and generate new revenue streams with our proven track record in deploying intelligent automation systems and a customer-centric approach, the group has become the preferred provider for both established and emerging industries in the operation and maintenance service sector. We're encouraged by the high level of contract in hand and robust pipeline of business opportunities, both domestically and internationally. We believe these will drive significant growth of the group our focus on sustainability and innovation will also enable us to stay ahead of the curve and provide optimal solutions that benefit both our customers and the wider community. This concludes our presentation, and I'll now pass the floor to our MC for the Q&A session. Thank you.

[Operator Instructions] Now we have 2 questions in chatbox, and we will read them one by one now. The first question is from Peter Chan of HSBC. With the lifting of COVID restriction, what opportunities do you see in the market? How will this impact the group's overall operations in terms of project progress and tenders in different markets? This is the first question.

Okay. Maybe I answer the question. In financial side, during the report period, we continue with our solid performance despite delay in some projects due to COVID-19. But our -- our profit -- net profit increased to HKD 240 million, and our order in hand is about HKD 12 billion -- more than HKD 12 billion. So in the market sector, we have 4 business sectors. Each business sector has its own different situation. For their building service, government tries to increase the capital expenditure of HKD 100 billion every year, including the -- if including the private sector altogether, every year, we have around HKD 300 billion opportunities in Hong Kong market, which includes [indiscernible] and [indiscernible]. All this is a mega sized project and also keep us more opportunities. For the -- the government also prepared to build 30,000 Light Public Housing units, which include public housing production by 50%. In data center side, government also implementing 100 new digital initiative by 2025, which also increased the annual usage of open data. In environmental side, in Hong Kong, government also will build more -- wastewater treatment plant and also portable water treatment plant and also the solid waste system in Hong Kong. Starting with waste water plant, they will move it to [indiscernible] in the coming few years. And also the Tai Po wastewater treatment plant, they will rebuild it because that plant was built 40 years ago. And also the other [indiscernible] water treatment sites in [indiscernible] wastewater treatment were -- and also the solid waste -- the second solid waste [ installation ] plant. All this gave us opportunity in the coming few years. ICBT. Because government tried to transform Hong Kong to be the smart city and smart economics. So we will keep ICBT more opportunity in BMS IoT, ELV and ICT. In the [indiscernible] and [ S Data ] business, the expansion of U.S. and Europe market has set up a foundation for us to further expand our rich and create new revenue streams. In U.S., TEI experience in navigating challenging time has allowed them to snowy [ turn the ] corner. During COVID-19 period, TEI also developing the new market on residential. So in conclusion, we foresee the coming few years, we have more opportunity, no better in Hong Kong and also in Mainland China.

The second question is from Steven Lam of [indiscernible]. The question is, despite the decrease in revenue from contracting work and sales of goods, maintenance work grown. Is maintenance work becoming a growth driver? What are the strategies to strengthen the recurring income?

Every project is followed by maintenance. The point about maintenance work is it provides recurring revenue. So we have been enhancing our maintenance business. And this year, we see a significant increase of over HKD 500 million. in maintenance contract. So going forward, we will continue to work on this strategy, and we're also beginning to see, for example, technology-assisted specialized solutions that will go well with maintenance and the group is in a strong position to leverage its innovation and technologies in this endeavor.

The next question is from [ Manuel Schlabbers ] of Maven investment.

I had a question with regards to the ICBT segment. We had revenues slightly increased last year, but it's a big drop in profitability. So we swung from a profit of just over HKD 31 million last year to a loss of around HKD 80 million. Now if we put that in perspective with regards to the size of the recurring revenue, that's very significant impact. So the recurring revenue would have been higher by around 40% or so. You do mention in the report that there were certain provisions for losses on certain projects in the ICBT segment. But given the magnitude, it seems that things have gone quite severely wrong there. Could you maybe provide a little bit more color what happened there, why it happened? And is this something that was kind of a one-off nature? Or can we expect potentially further losses in that segment going forward?

Yes. Thank you for your questions. Regarding the ICBT. In the first half year, yes, there is a loss because we have some research on few projects. The reason is that I cannot explain too much on that because there is some NDA with the client. But what I can say is we do rebuild something in their system. So we already reserved some money, HKD 46 million. For this, we built additional costs, and we will finish their work between 2 to 3 years. And for the overall business segment, we see the government they try to make the Hong Kong as a smart city and smart economy. So we see the opportunity in the future is more and more. Thank you.

And the next question is from Ms. Eva Yip of Founder Securities. The question is revenue from U.K. market grew strongly during the period. What is the key reason?

Okay. Let me try and help to answer that question. The U.K. market, the revenue grew is based on the -- it's driven by the Lift and Escalator business sector. [ Anlev ] U.K. has secured this first order back in 2022, and we are now currently delivering this particular project. This is the iconic project in Manchester, Victoria Riverside. And hopefully, we'll continue to see this U.K. sector continue to grow. We believe that it is a growth driver for us.

So Manuel has a follow-up question.

I just wanted to clarify a little bit that I -- whether I understood it correctly. So one is do you expect this to be a one-off issue? Or with regards to that particular contract, there may be further provisioning required? And also -- yes, I understand you can't talk too much about the details given the NDA, but this is something that we recognize the revenue previously and then we kind of have to -- kind of reverse that reported profit in the current period? Or is it something where we basically overrun on the cost side, and we are committed to providing basically the product below cost due to kind of budgeting constraints?

Okay. Let me try to answer some of the numbers, questions or the financial questions. The provisions made are always on a one-off basis. We try to estimate the total cost that required to complete the project. And then we make the provision on that basis. So the provisions made are one-off based on the projects that Raymond has discussed about. We have a very tight management system or risk management systems that we reviewed or our projects closely and trying to minimize this kind of exposures and hence, why we have a risk management system is in place.

Then the next question is a question from the text box. It's raised by Joseph of Gates Capital. The question is, management presented a number of growth drivers in the building services, including governments, infrastructure and public housing spending, data center yet, we see contracts on hand for building services have decreased. Total value of new contracts received in the first half decreased and revenue also decreased. What -- does that mean we have lost market share?

Okay. Let me try to answer the question about the revenue and also the contract in hand. Okay, regarding the difference in revenue, it mainly due to the delayed turnover of some projects of the main construction works. But one of the main reason is that probably the labor shortage of our main contractor. Actually, the government has announced various measures such as import labor scheme and also government commit to enhance to improve the local training of the workers also as well as we have our strength on the product new technology on our [ installation ] work. We believe the situation will be improved. Also regarding the contract in hand, actually, last year was an exceptional year in comparing this with many new projects secured boosting the value of contracts in our contract in hand actually in fact, our tender strategy still remains the same, that is to focus on those standards, which our company has competitive advantage on that. Actually, you can see in the first half year, we can -- our data center and also our maintenance service has secured high order intake in the first half and we observed the trend of [ reason ] tender and either [indiscernible] more requirement on applying such new technology such as BIM, DfMA, MiMEP et cetera, for this one. Actually, we believe our company can have our competitive advantage to deal with and also to capture such opportunity in the future for this one.

So there is a follow-up question from Manuel. The question is, just one follow-up question on the ICBT project, where we have 2 profession for. Could you give us an idea of the revenue sum on the project?

I'm afraid I cannot disclose at this commercial information between our clients and ourselves. So unfortunately, I can't disclose the information. Sorry.

One more question from Eva of Founder Securities. Management have highlighted opportunity from lift and escalator replacement in Hong Kong. How much orders on hand related to it expectation on growth? Any expectation on growth?

I try to answer this question. Yes, I think -- as you know, every year, we have -- every year -- okay, can you hear? We have new contracts secured and executed and completed. And all those contracts will be given to the service maintenance business operation. And so every year, we will probably have -- we will probably have 100 or more new [ lifts ] being transferred to service department. So the service income is growing, but not potentially, but what is steady growth, probably a 10% or a year or something like that. So it's a continuous growing business.

Another question from Joseph of Gate Capital. Management is optimistic on the public E&M spending. Can you share your view on the demand from the private side especially given some developers seem to struggle with high debt and may slow down the future developments?

Can you repeat the question? I'm not sure we understand what they're saying.

Because the management shows that it is [ optimism ] towards the public E&M spending from the government. Can you share your view on the demand from the private side, especially when developers seem to struggle with high debt and slow down future developments.

Every year, they are buildings infrastructures being constructed. And that means the accumulation of the E&M equipment projects is increasing every year. And -- so there's a continuous growth on this market sector. And we are putting in new technologies such as IoT or the digital twin or AI to enhance our service quality and also on profitability. So that's why we are very optimistic on the overall the E&M industry because every year, there's a growing market. Every is that this new technology we can put in. And the present condition, the number of competitors is not growing. So I think we would probably -- the industry is still positive for times to come.

[Operator Instructions] So since there's no further questions, this concludes our investor presentation today. Thank you for your continuous support to Analogue. If you like to have a separate meeting with the management, please feel free to contact SPRG for coordination. Once again, thanks for your participation today. You may now disconnect. Thank you.

Thank you very much.