Qisda Corporation (2352) Earnings Call Transcript & Summary

Good afternoon. Welcome to Key Stock Operation Investor Conference 2022, the fourth quarter results. This conference will be hosted by Chairman, Peter Chen; President, Joe Huang; CFO, Jasmin Hung; co-hosted by General Manager of each business group; GM of Information Technology Business Group, Daniel Hsueh; GM of Commercial and Industrial Business Group, Yuchin Lin; GM of Medical Devices Business Group; Harry Yang; GM of Business Solutions Group, Michael Lee; GM of Networking & Communication Business Group, April Huang; CIO, Michael Wang. The agenda is as follow, and this conference should take around 1 hour. First, Jasmin will bring financial results in 2022, followed by our Chairman, Peter Chen; and President, Joe Huang, bring us business update and outlook. Next, General Manager of each business group will bring a summary of each business group, followed by Q&A session. You may submit your question online. We will reply after the conference. Before we commence, we want to remind you that in this conference, it contains forward-looking statements which subject to risks and uncertainty. We would like you to take some time to read through the content on Page 4, Safe Harbor Notice. Next, I'll hand over microphone to CFO, Jasmin Hung, to bring us financial results in 2022 and summary.

Good afternoon, everyone. I am Qisda's CFO, Jasmin. First, I would like to go through a brief introduction of Qisda Group. We were established in 1984, have 39-year history, ticker 2352. We have more than 200 consolidated companies, 16 listed companies in Taiwan. Number of employees, more than 27,000 people. Global presence, manufacturing site, Taiwan, China and Vietnam. Sales offices located more than 200 places worldwide. R&D site based in Taiwan and China. Revenue breakdown by geography, Asia account for 44%; Americas, 33%; Europe, 21%; Others, 2%. Revenue in 2022, TWD 240 billion. In the past years, we have consecutively working in ESG, and we have won the best employer. And in 2022, we have won 14 awards of TCSA. 2021, we have won Forbes World's Best Employer 2021. We have been putting effort in sustainability and employers. Since 2014, Peter was elected as our Chairman. We have crossed Information Technology, Medical, smart business solutions and Networking & Communication. In 2022, it has accounted for 45%. And in the fourth quarter, it has accounted for 50%. In our business group, you may see, identified by the color purple blocks are HVA products. Medical account for 9%, TWC 20.5 billion; BSG, 13%, TWD 31.8 billion; NCG account for 14%, TWD 33.6 billion. There's also a block under IT HVA products. Other than continuing in putting efforts in HVA products, we have also optimizing IT products. If to add up all the performance in the purple blocks, HVA product is exceeding more than TWD 100 billion scope. It has reached TWD 106.6 billion. Medical has reached more than TWD 20 billion scope, BSG and NCG exceeding TWD 30 billion scope. Let's take a look at the fourth quarter financial results. Whole year revenue TWD 239.8 billion, hit record highs. Net income attributable to Qisda reached TWD 8.25 billion. EPS hit TWD 4.2, slightly down by TWD 0.02. Both net income attributable to Qisda and EPS, our second highest in the past 10 years. HVA business revenue was TWD 106.6 billion, exceeding TWD 100 billion scope. Major contribution comes from high value-added products. For 2 consecutive years, EPS surpassed TWD 4 and ROE exceeded 16%. We have been improving our profitability. Consolidated gross margin was 15.6%, up by 1.9% Y-o-Y, hit highest in 10 years. HVA business reached TWD 28 billion, accounted for 50% of total revenue. Not only revenue grew, operating income amount grew more than 40% Y-o-Y. NCG revenue grew 44%. Not only revenue, both gross margin and OP income margin increased. OP income margin grew more than 200% Y-o-Y and has been improving. Medical revenue grew 19%. OP income margin remained flattish. OP income amount grew more than 30%. BSG revenue is flattish from last year, grew 1%. Both gross margin and Op income margin increased Y-o-Y. OP income amount grew more than 50%. Due to current IT recession, IT performance has decreased. Revenue down by 22%, and lower demand for IT products, which lead to a decrease in both OP income margin and OP income amount. The major impact revealed in display products. However, gross margin has returned to an upward trend. Inventory level in the fourth quarter, it has reached TWD 43.9 billion, decreased by TWD 9.5 billion Q-o-Q. Compared to last year, down by TWD 6.3 billion. We have put effort in inventory management and seeing the results. Inventory amount and turnover days declined for 3 consecutive quarters. In our Board meeting, we have announced cash dividend TWD 2 per share. Payout ratio around 48%, yield rate around 6.6%. And we adopt stable issuance methods. As you can see in the following item, we keep looking forward to the future potential of BenQ hospital as it is a key platform. Based on Board meeting resolution, Qisda will increase investment in BenQ BM Holding Cayman Corporation within USD 235 million. We will evaluate future potential and capital needs to decide cash dividend to make it stable. So cash dividend is around TWD 2 per share. Next, let's take a look at the consolidated statement of comprehensive income. Net sales, TWD 56 billion, suffered from sluggish IT market, down by TWD 5.7 billion Y-o-Y. Gross margin 15.6% compared to last year, 13.7%, up by 1.8%. OP income, TWD 1.4 billion, down by TWD 0.27 billion. With TWD 5.7 billion drop in net sales, OP income only dropped TWD 0.27 billion. This is because we have been prepared for a challenge beforehand by investing in HVA product. HVA contribute to compensate drops in IT sector. So OP income only slightly dropped TWD 0.27 billion. Net income attributable to Qisda was TWD 0.37 billion. EPS TWD 0.19. Compared to last quarter, revenue dropped TWD 3.9 billion, down by 7%. Gross margin up by 1% Q-o-Q. As you may know, in the third quarter, we have disposed BenQ Hong Kong accounted for TWD 10.6 billion. So net non-OP income has bigger difference on a Q-o-Q basis. And in the third quarter, we have to pay higher income tax. That is the reason why there is a gap in net non-OP income. Consolidated statement of comprehensive income year-to-date. Net sales TWD 239 billion. Gross margin, 14.4%, compared to last year, 14.4%, remained flattish. Despite material shortage, expense and influence of inflation, we keep a certain level in gross margin. This is because of the contribution from HVA products. OP income TWD 5.8 billion account for 2.4%. EPS, TWD 4.2, slightly down by TWD 0.03 Y-o-Y. Next, revenue and OP income. As you can see, since 2018 to 2022, we have been growing consecutively each year from TWD 155 billion to TWD 239 billion revenue-wise. OP income, since 2018, it has been growing. In 2020 and 2021, it has been around TWD 6 billion to TWD 7 billion despite the impact of the market. Next slide, as you all are highly anticipated gross margin range. Let's take a look at revenue scope on horizontal axis and gross margin range on vertical axis. Since 2014, Qisda transformation, the scope has been growing. Medical has reached TWD 20 billion. Within this, hospital has accounted for more than TWD 10 billion. Nonhospital, such as consumable and device, account for TWD 10 billion. Gross margin is relatively high at 20% to 25%. Let's take a look at BSG and NCG. Both revenue scope above TWD 30 billion. Gross margin around 15% to 20%, close to 20%. We keep enhancing the HVA product investment. Left side, BenQ material, polarizer and optical film. Revenue scope around TWD 10 billion to TWD 20 billion. Gross margin around 15% to 20%. IT non-HVA gross margin range falls around 5% to 10%. This is estimated. IT business is a highly competitive industry. Gross margin is relatively low. So it falls into the range. So we need to keep focusing in improving IT industry profitability. Consolidated balance sheet highlights. Cash and equivalents was TWD 30.6 billion. As we have mentioned, inventory TWD 43.8 billion, down by TWD 9.5 billion. Compared to last year, down by TWD 6.2 billion Y-o-Y. Total liabilities account for 65% last quarter, 69% on Q-o-Q basis, down by 4 percentage points. Others remain almost the same. Key financial ratios. Inventory turnover days on Q-o-Q basis down by 6 days, from 90 to 84. Cash conversion cycle down by 4 days, from 96 to 92. ROE was 16.5%, consecutively surpassed 16% for 2 years. Next slide was for your reference on a quarter basis of each business group's performance. High value-added revenue trend. Left side is quarterly performance, right side yearly performance. In the fourth quarter of 2022, high value-added business reached 50% in revenue. It has grown from the fourth quarter in 2021, 39% to now 50%. On yearly growth, it is more obvious. In 2018, HVA revenue only account for 18%; 2019, 22%; 2020, 34%. Now 2022, it has reached 45%. Next, as all of you are highly anticipated, are listed companies' financial results. We have reported in each quarter. Overall performance are great. DataImage revenue, TWD 4.9 billion. EPS up by TWD 1.5, hit record high. TopView EPS up by TWD 5.45, hit record high. SIMULA revenue grew from TWD 3 billion to TWD 4.2 billion. EPS up by TWD 1.73, highest in the past 3 years. We keep focusing on IT HVA products. Medical sector. BenQ Medical, EPS TWD 4.04, up by TWD 3.39, record high. Concord revenue TWD 0.88 billion. EPS, up by TWD 0.15. DIVA also hit record high in the past 7 years. BSG, AEWIN, EPS hit highest in the past 6 years. Partner Tech, EPS hit a record high. Some performance are lowering such as DFI. It has non-OP profit in 2021. Ace Pillar impacted by China lockdown, profit is decreasing. MetaAge also has non-OP profit in 2021, so there's differences on a Y-o-Y basis. NCG, Alpha network, EPS TWD 1.69, up by TWD 0.89, hit a record high in the past 11 years. Next, let's take a look at business update and outlook brought by Chairman, Peter Chen.

Hello, investor, and friend from news media, good afternoon. I am Qisda Chairman, Peter Chen. First, I would like to show my gratitude for you for your long-term support to Qisda Corporation and to join our investor conference. I would like to show my appreciation and welcome you all. Here, I want to focus on the goal that we have set since 2014, that reach 2022, we want our HVA revenue to exceed 50% of total revenue. That said, in the past 9 years, within 3 Board of Directors, we want to transform product portfolio. That's why we set the goal to be reached last year regarding HVA business. Most of our revenue comes from HVA products. As you can see, the new business refer to the item in the next slide, Qisda's Winning Strategy. Current business optimization, fast expansion for Medical business, Network business strategic placement and acceleration on Solution Development. For the second, third, fourth section Medical, NCG and AIoT, in the past 9 years through M&A under our Grand Fleet Alliances, we have invited many unsung champions joining our Grand Fleet. Luckily, upon everyone's efforts, our CFO, Jasmin has reported that in the fourth quarter of 2022, in that single quarter, we have met the goal that we have set. In that single quarter, revenue of HVA product exceed 50% of total revenue. And of course, you might wonder how about yearly performance? In the chart that we have showed you in previous slides, it has reached 45%. We did not meet yearly goal, but in single quarter, we have reached the goal that we have set. And looking forward to our future performance, in January and February, revenue we have announced basically maintain the same momentum as 2021 for the fourth quarter performance, and we hope that in the past 9-year goal, basically, we have achieved that goal. This is what we said, the first phase of HVA product transformation. As I have shared with you this metaphor about hitting the gym. If you're too slim, our trainer would say that you're too slim, you need to gain weight. And that is only the first phase. And the second phase, you need to transform the weight that has gained into a more lean muscle through training. This is the 2-phase goal. Here, I want to declare Qisda's new vision. From 2014 to 2027, we hope to reach a goal of high value-added business will contribute more than half of total profits. From investment, you must be more professional than us and you understand that value transformation. Revenue exceeding 50% is rather easier, but profit, difficult. And how to transform the weight gain into muscle? How to reach the goal of profit exceeding 50%. And profit has many definition. OI, or after-tax income, none of them, we're talking about PAT because revenue recognized is regarding the ratio of shareholding. After deducting PPA, after deducting tax, we're talking about the net income attributable to Qisda. This is rather difficult. You must know better about our balance sheet and know that this is really difficult. And you might wonder how to achieve the goal? I have seen that question raised in the Q&A session. In the future 5 years, how to reach the goal of HVA business contribute more than half of total profits? We have emphasized in the past, first, joining Grand Fleet Alliance through sharing resources and generate synergy. We hope to see each partner to rapid growth on revenue and profit. Our default setting the bar for our partner is to have 40% growth each year, either organic and inorganic growth, both growth more than 40% each year. Each year, 1.4 multiple 1.4. After 2 years, it could be multiple. And we have many successful cases such as DFI joined Grand Fleet in 2017. Revenue was TWD 3.7 billion, next year TWD 5.3 billion, and after that, TWD 7 billion growth at more than 40%. EPS grew from TWD 3 to TWD 5. Alpha Networks joining around 2019. Until 2020, it has reached TWD 32.2 billion. The growth is more than 100%. These kind of successful cases could be seen under our subsidiary companies. This kind of scaled up goals, basically, the value for this strategy with the same gross margin and to increase numerator, the profit will also go up. Grow bigger, the profitability will also go up. This is what the Grand Fleet Alliances has been emphasized. We have enjoyed the results in the past years. In the future, we want to accelerate our growth of our revenue, so to contribute to our profits to enjoy the scaled-up goal. Second, from a gross margin perspective. Through the resource sharing and synergy generated, we hope to actively adjusting our partners' gross margin performance and amplify revenue such as a company with TWD 10 billion revenue, up by 1% gross margin, it can enjoy TWD 0.1 billion gross margin to contribute to us. So gross margin improvement is another core in our future goal, such as NCG, AIoT. In the past, let's take a look at the fourth quarter performance. Both business group gross margin has grown from around 10% to current date, 20%, and we believe it will only be better. Third, as you may know, investment is not the solution to all. Through the M&A process, it generates PPA, purchase price allocation. When we buy the company, we have premium, and we need to allocate those in our balance sheet. It has to be recognized. If we cannot, it has to go through amortization within 5- to 6-year period and it has to happen each year. It will influence our profit. Luckily, we have merged more than 10 companies over 9 years. Some of them are more than 9 years, and we have passed that 5- to 6-year period. Each year, some of our partners has finished the amortization process and to contribute to our profits. And we will increase the investment on those partners. Furthermore, we need to emphasize on value relocation, such as Partner Technology. It has now a 1 and 4 integration value up program. Among them, through this integration, the fresh company to integrate other 3 companies per WPG Holdings approach to scale up and to add value to improve future market value and its volume. This will lead to improving the profit of each shareholders through amplifying the value to make profit seen-able in each aspect. So above are the brief introduction of our winning strategy. Next, as the example that we have provided before. We will keep focusing on allocating our resources on profits. With the bigger vision announced, you might wonder what is our outlook in 2023. We will invite each General Manager of each business group to give us detailed information. In the past, we have shared our observation with you. As you can see, the announcement in January and February, our revenue in those 2 months are rather poor. We might see that IT market is suffering. The impact is obvious. It has declined by around 18%. You might be worried how about yearly performance. I'm talking about the observation in the entire industry. In the past, we have suffered from black swan, rising interest rate and pandemic. We all see that the first half of the year, the first quarter or the second quarter will be the trough. In the second half year, we should enjoy a recovery and upward trend. Overall, the first half year would be challenging for all due to those uncertainties. We hope to enjoy an upturn in the second half year. This is the observation from overall environment. We will be dedicated to present a stable result or better result. This is what we need to focus on. This is the general observation shared with you. Next, I'll hand over microphone to Joe Huang.

Hello. This is Qisda President, Joe Huang. Our Chairman has already given detailed new vision or the situation in the first and second quarter. Here, I want to provide a brief summary. From this slide, our CFO has reported Qisda revenue in 2022 has reached TWD 239.8 billion. In the fourth quarter, HVA new business revenue has exceeded 50% of total revenue and our new vision is our profit in 2027 would exceed 50% of total profit. In this slide on the left side, value up. We have reached a certain scale in HVA business. We also focused in the future 3- to 5-year potential market and to plan accordingly and to develop new business to enhance investment. Migration to high-value product, our Medical, BSG and NCG gross margin has reached over 20%. And certain IT products has reached more than 20% as well. This is our future goal to be amplified. And expansion of new businesses, we focus on UAV, intraoral scanner and medical products. This is our future goal to develop new market, new product and enhance strategic investment other than the n BenQ BM Holding Cayman Corp. increasing investment and continue to expand Grand Fleet Medical platform and to improve net income attributable to Qisda and to improve precision medicine. Those are the 4 focus in this part. And the right side is about improving overall synergy, lean and focused, organizational optimization, China Plus One S strategy due to geopolitical situation to enhance our resilience in delivering products. And we have mentioned the leverage under partner integration, the 1 and 4 integration has fulfilled. Last year, we have grew in energy, and we have seen the outcome. We have enhanced client services. About China Plus One strategy, we have distributed our capacity in Vietnam. It will be our supply chain outside China to cope with geopolitical conflicts to improve our compatibility. Regarding first quarter outlook, our Chairman has shared, to cope with inflation, rising interest rates, geopolitical conflicts and war, we're still suffering greatly from the challenges. The first quarter, we have inventory factors and end user needs factors. We have to keep balance between supply and need. Inventory-wise, currently, we have reached balance gradually. IT industry suffered the most, and we expect to enjoy a return in the first quarter as pre-pandemic level. Next, we will have GM of each business group for summaries.

Hello. I'm Daniel, GM of ITG. Our core product is display. Here's to report to you about our performance in the fourth quarter and first quarter outlook. In fourth quarter, display market demand declined. High-end product, particularly weak. Qisda display sales declines on Q-o-Q and Y-o-Y basis. Our brand client is dedicated in digesting inventory level, meanwhile, actively controlled tightened manufacturing, and we have seen the results. First quarter outlook, we haven't enjoyed an upturn in the market needs. Client demand remain conservative. Adding the Lunar new year effect, Qisda global display sales is still impacted. Inventory control management is our focus. We have seen the result and we expect to enjoy the same level of pre-pandemic performance in the first quarter. High-end product needs remained slow, to improve inventory level would be our focus.

Hello, investor and friend from News Media. I'm Yuchin, GM of CIG. In Q -- in the fourth quarter 2002, industrial business and medical and automotive area, client demand remains stable. And we're benefiting from alleviation of material shortage. On delivered product in the third quarter and the fourth quarter, majority of client needs and automotive wireless module delivery is better than expected. And outlook for the first quarter is impacted by war, inflation, rising interest rates and depreciation of Japanese yen and euro, we assume client purchase power would be weakened. Inventory digestion will be longer. We expect to see the trough in the first quarter and an upturn in the second quarter. Project market, high resolution projector demand is weakening. However, low-res solution projector demand remains the same. Specific semiconductor material shortage has been alleviated, which is not the same as last year. So we can meet the need of clients in the first quarter. A medical intraoral scanner, the new growth engine, has been adopted by Italian and Chinese clients. In the first and second quarter, we have a few sample delivered. And in the third quarter, we will begin to mass produce. Thank you.

Hello, everyone. I'm Harry, GM of Medical Business Group, here to report the results. In the fourth quarter, in Medical business, we grew by 19% Y-o-Y. Medical device, excluding hospital, grew 38% Y-o-Y. And quarterly performance has hit record high. Medical device in the whole year has grown 54% Y-o-Y and hit record high. And I want to emphasize on the change in Medical business. When pandemic strike, anti-pandemic products will enjoy the benefits. But medical devices requirement will slow down. The entire momentum of the 2 offsets, we still enjoy the growth in this sector. Anti-pandemic product, in the last year, we enjoy a good performance. Although the restriction of mask has been lifted, medical masks' demand remains high. And we can see medical masks, in January and February, still hit high performance, and we will keep working on high value-added mask production. As to consumables, the demand in hospital and market has enjoyed an upturn. We can see the demand globally is returning. And the third product, dialysis, the entire year enjoyed a good performance, especially in China. BenQ Biotech has growth 64%, which is high. And we also enjoy an upturn in Southeast Asia market and China market. It keeps growing. And the fourth, medical service and medical management. The demand in last year is weakening. But in the fourth quarter, it is returning. Demand in pharmacy remains growing. Medical management, due to the post-pandemic era, we have enjoyed an upturn in the market. Overall, the first quarter outlook, we still see the growth in the post-pandemic era in overseas markets.

Hello, everyone. I am GM of BSG, Michael. And I want to report Q4 performance and outlook. Last year, frankly, our business group focused on business IT intelligence, business OT intelligence and OMO online offline integration services, and the gross margin has progressively improving. Revenue and gross margin has growth on Q-o-Q and Y-o-Y basis. DFI, consolidated revenue hit record high. AEWIN, revenue, net income hit record high. Partner, net income, net income margin hit record high. And the first quarter outlook, based on digital transformation and new infrastructure, human resource demand declines. The elastic growth is growing stably. So each business group is pursuing stable growth to meet clients' need. DFI embedded business is to grow continuously. AEWIN, in the past, the major focus is Asian market. And in Europe and America market is also growing. Ace Pillar, it has been through a transformation from distributor to green energy and smart automation solution provider. MetaAge, focused on information security and cloud integration and ChatGPT. The entire market need IT integration is still growing. And Partner, our Chairman has mentioned the market share in Taiwan and Singapore is high. And food industry OMO platform, we start from that and to continuously expand our food and beverage retail market.

Hello, everyone. I'm GM of NCG, April Huang. I'm going to share the point of Alpha Networks integration and Hitron performance. In the fourth quarter, due to Alpha integration, NCG revenue hit TWD 9.24 billion, Y-o-Y growth 44% whole year. TWD 33.6 billion. Y-o-Y, up by 20.7%, hit record high. Gross margin in the fourth quarter, 19.1%. Whole year grew from 16.5% to 18%, benefiting from alleviation of material shortage and new market development, mainly from Hitron market development outside North America market. And we are also benefiting from Vietnam manufacturing growth and business growth and the growth mostly contributed by new business group, especially exchange -- Exchanger and broadband and wireless broadband. Gross margin relatively high, Exchanger, which is 47%, which lead to entire gross margin growth. And I have seen a question raised in our Q&A section by Mr. Chang, regarding the first quarter outlook. Last year, T2 semiconductor lead time is longer than before, which lengthen order cycle. However, market situation, we have observed some mass production and new manufacturing process production line. They have fulfilled inventory level and eased product delivery demand, such as wireless broadband and IP camera. Before, smaller amount manufacturing, old production lines such as Exchanger, they're still suffering from material shortage. So judging by different production line, it has different situation. But we still remain optimistic in the first quarter performance. And we need to focusly observe the need on clients' end. Thank you.

Okay. So let's enter the Q&A session. Here, we can see the question raised regarding how to reach profit of HVA product exceeding entire profit. We have provided clearly strategic information and NCG outlook. April has already answered that question. And hospital share holding increase and IPO listing plan. Let's have our CFO to answer for this.

So we look forward to the optimistic growth in hospital. In 2022, revenue has exceeded TWD 10 billion. And even facing the challenge of China policy change, it is still profitable, and it's even accredited as level 1 hospital. So we look forward to the growth of hospital, and we are still expanding on the second phase establishment. So within the amount of TWD 0.235 billion, we want to increase the shareholding. And IPO plan. In the past years, we have been planning, but due to pandemic strikes, which lowered the progress, and we want to have a perfect timing for IPO. We also need to observe our profitability and capital market situation. So we slowed that plan down, and we keep investing in smart hospital strategy. And we have won a lot of awards. So we're still checking a suitable timing, and we will keep reporting to you. And yes, we do have the plan. So yes, you might think about the development of hospital. And last year, I have reported in our investor conference, Taiwan-founded hospital to operate in China to be profitable, it is very difficult. Our performance is relatively good, luckily upon the effort from our team. Under pandemic strike in the past 3 years, we have maintained healthy growth in operation. Even suffered from pandemic, people are afraid to go to the hospital because they don't want to get infected. But our revenue slightly remain on the upward trend. In general, since 2016, both of our hospitals in China are profitable and operating healthily. This is very rare and difficult. Since January and February, restriction in China has been lifted. We can see the growth momentum of hospital has returned to a faster growth trend. In general, we are looking forward to the promising growth in the future. We can see Qisda Corporation are enjoying market value potential in the future, contributed by hospital management. That's why we want to invest TWD 0.235 billion in hospital shareholding ratio. And in the future, we will actively arrange our IPO plan. And hospital in Taiwan are mostly managed by legal persons, and they cannot become listed company, but it's different in China. So we are looking forward to proceed with that plan and to add value in the future.

And the next question regarding private placement, I would like to have our CFO to answer this question.

As a matter of fact, we have been discussing this every year, and this is our backup plan. We are enjoying financial growth each year, and we are looking seriously at our capital situation. As to corporation operation, if the leverage remains balanced, then we will not go to that route. We will not have private placement.

And the last question about the decline in inventory level. We have down by TWD 9.5 billion in the fourth quarter, and on a Y-o-Y basis down by TWD 627 billion. I would like to have our GM to answer this question.

Hi, everyone. Inventory level, I think all business group is enjoying the lowering trend, mainly ITG. It has went down since the second quarter. For ITG, the inventory level was TWD 32 billion. And since last year, it has down by TWD 10 billion to TWD 20 billion. We assume in the first quarter, it should return to the level before pandemic in 2019. As a matter of fact, benefiting from alleviation of material shortage, we're enjoying a lower level of inventory.

Okay. So now it is 3:30 p.m. now. We have finished this conference per our plan. If you have other questions, maybe we can answer them in future events. Each year, we have one in-person investor conference that we can communicate with you in person. So we still have many opportunity to see you and to answer your question. Next, I will return the microphone to our MC.

All the questions have been compiled. Our investor conference has finished. Thank you for joining our 2022 Fourth Quarter Online Investor Conference. The audio will be uploaded afterward. Thank you again for joining. You may leave the conference room. [Statements in English on this transcript were spoken by an interpreter present on the live call.]