Qisda Corporation (2352) Earnings Call Transcript & Summary

Hello, investors. Good afternoon. Welcome to Qisda Corporation, the First Quarter Results of 2025 Investor Conference. This conference is chaired by Chairman, Peter Chen; President, Joe Huang; and our CFO, Jasmin Hung. Co-Chaired by GM of each business groups, respectively, GM of Information Technology Business Group, Daniel Hsueh; GM of Commercial and Industrial Business Group, Yuchin Lin; GM of Medical Business Group, Harry Yang; GM of Business Solutions Business Group, Joshua Tzeng; GM of Networking and Communications Business Group, April Huang; and our CIO, Michael Wang. This conference is estimated to take 1 hour. The agenda is as follows: First, our CFO, Jasmin, will bring us the first quarter of 2025 financial results and business summary; followed by Chairman, Peter, and President, Joe, to bring us the business update and outlook, followed by GM of each business group to briefly share the update and outlook of each business group. Later, we will enter a Q&A session. [Operator Instructions] Before we commence, we want to remind you to pay attention to the safe harbor notice as there are forward-looking statements in the presentation subject to risk and uncertainty. Please pay some time to read through the Slide 4 safe harbor notice. Thank you. Next, I will hand over to our CFO, Jasmin Hung, to bring us the first quarter of 2025, the financial results and business summary.

Hello, investors. Good afternoon. I'm Jasmin. First, I will bring you the financial summary. First, we will go through the brief introduction of Qisda Group. What you may concern is the U.S. tariff. Our manufacturing site was Taiwan and China. In recent year, we have added Vietnam for U.S. tariff. We're also seeking other manufacturing sites. We have more than 20 (sic) [ 200 ] sales offices worldwide and R&D sites located in Taiwan and China. We have 26,000 employees worldwide. And our revenue breakdown in the recent year, through M&A of Qisda Grand Fleet, the revenue mainly located in Asia accounted for 52% of total revenue; Americas, 30%; Europe, 17%. Let's take a look at Qisda Group business group performance. On this chart, you can see the purple blocks are the high value-added business groups developed in recent years. We have 4 major business groups. First, IT, revenue in the first quarter was NTD 27 billion and the product mainly was displays. The revenue was around NTD 19.2 billion. And we also developed high value-added business in IT sector. We have professional display module and integration solutions. And the second business group is BSG. Revenue was NTD 8.1 billion, focused on 3 areas. First, IT Intelligence Partner, AI computing, cybersecurity and edge to cloud integration and digital transformation. And for OT Intelligence Partners focusing on green energy, automation and industrial computer. And the third one is OMO online and offline solution. And medical revenue was NTD 7.2 billion, accounted for 14%. We have 2 BenQ Hospital in Suzhou and Nanjing. And we have the third one, equity method hospital, Donghui Hospital located in Guangxi, Guigang. Other than hospital, we also invested in pharmaceutical health care channels, which is Ding Ding Drugstore and medical management consulting services provided by Concord. So from hospital to health care channel to consulting, we have one package services. And for equipment and consumable, we have products such as surgical tables and lights and dialyzers. We have 3 major categories. And NCG revenue was NTD 4.5 billion, accounted for 9%. The product was mainly LAN/MAN, data switch and small cells. And our major key investment through equity method, we have Darfon, low earth orbit satellite Rapidtek and Topview and through FVOCI, we have AUO. Let's take a look at financial results of the first quarter this year. In the first quarter compared to last year, on revenue, OP income amount and net profit attributable to Qisda grew compared to the same period last year. Revenue was NTD 49.7 billion, up by NTD 2.8 billion, up by 6% Y-o-Y. OP income amount was NTD 0.9 billion, up by NTD 0.07 billion, up by 8% Y-o-Y. Net profit attributable to Qisda was NTD 0.48 billion, up by NTD 0.23 billion, up by 88% Y-o-Y. EPS was NTD 0.25, up by NTD 0.12 Y-o-Y. Gross margin was 17.3%, hit historical high, up by 1.3 percentage point Y-o-Y. Operating margin was 2% remained flattish. Net profit margin attributable to Qisda was 1%, up by 0.5 percentage point Y-o-Y. Based on the financial results, let's take a look at breakdown of each business group. IT, either on revenue or gross margin or OP income margin grew Y-o-Y. Revenue up by NTD 1.8 billion, up by 7%. And the display revenue grew 10% Y-o-Y. Gross margin, OP income margin and OP income amount increased Y-o-Y. In the IT business group, we have high value-added sector. Revenue grew 6% Y-o-Y. Gross margin, OP income margin, OP income amount increased Y-o-Y. So the entire IT business group, both on revenue or OP income margin went up. Let's take a look at high value-added business groups. In this part, revenue and gross margin both increased, but OP income amount slightly decreased. And in high value-added business group, we have BSG, it has better performance. Revenue grew 8%. Gross margin, OP income margin and OP income amount increased Y-o-Y. The OP income amount decreased slightly in high value-added business groups. The major reason located in medical and NCG. For medical, the entire revenue grew 21% Y-o-Y through acquiring Ding Ding Drugstore and the original business group also went up. And the entire gross margin increased Y-o-Y. However, OP income amount decreased. And we can explain the reason is due to investment because BenQ Hospital, Nanjing hospital in the past 2 years was establishing the second phase operation. And we have to invest some costs, for example, infrastructure and health care, human resources. We have to put this investment in order to see the future outcome. So we think this is the sweet burden for starting this new development and to be listed in capital market. Last April, we have finished the filing process. So we have this expense in the first quarter this year. So the OP income amount slightly decreased, and we think the impact is short term, but the future outcome should be positive. And we also hope to see the contribution to the capital market. For NCG, the revenue decreased 13% Y-o-Y. The revenue scope and industrial need, the gross margin and OP income margin and OP income amount declined Y-o-Y. And due to the decrease on revenue for NCG, the entire HVA business group OP income amount ratio went down. And this year, April 11, we have posted relevant information after the hearing on Hong Kong Exchange News website. Those content could only be posted after hearing. So if you are curious and if you're interested in the content, you can go to the Hong Kong Exchange News website to see the prospectus. And the subsequent action is that we want to put effort in offering and roadshow and communicate with our investors about the offerings. Let's take a look at consolidated statement of comprehensive income. The revenue in the first quarter was NTD 49.7 billion, up by NTD 2.8 billion, up by 6% Y-o-Y. Gross margin was 17.3%, up by 1.3 percentage points. The increase was benefited from the first quarter compared to the same period last year through M&A. Those companies increased gross margin for the company. And the second point is BenQ. In the past years, including the first year, the gross margin is increasing. So the entire Grand Fleet also went up to 17.3%. OP expense NTD 7.6 billion, up by NTD 1 billion. The NTD 1 billion comes from M&A. It brought positive impact to revenue, but also increased OpEx. Our M&A focusing on channels enjoy higher gross margin, but also increased the OpEx. It also brought positive impact to OI percentage. And the second, increasing OpEx comes from BenQ. BenQ enjoys a higher gross margin and spent more on e-commerce and commercials in the first quarter. However, the OP income amount also increased. Therefore, the OP income amount was NTD 72 million, up by 8%. And we have mentioned gross margin went up, OP income percentage remained flattish. That was the impact of short-term medical investment and the decrease on NCG. OP income remained flattish. Net income attributable to Qisda was NTD 483 million, up by NTD 226 million, up by 88% Y-o-Y. EPS was NTD 0.13. We won't compare with the fourth quarter last year due to the seasonal factors. You may refer to the content on the slide for the comparison on Q-o-Q basis. Let's take a look at consolidated balance sheet highlights. As a matter of fact, this quarter compared to the end of last year remain unchanged. What you may focus on should be inventory. At the end of March, that was NTD 44.6 billion, up by NTD 2.6 billion Q-o-Q, up by NTD 8 billion on a Y-o-Y basis. Inventory at the end of the year, there would be some year-end inventory effect for Qisda and BenQ, especially for shipment to America. Compared to last year same period, up by NTD 8 billion. This is mainly due to Qisda and BenQ, the entire increase for the original business. The revenue growth in the first quarter compared to last year increased and also other subsidiary have the same effect. Other liabilities up by NTD 1.9 billion. Equity down by NTD 2.7 billion. This is the result of reclassification. In the first quarter, we have to remove the cash dividend payable from equity and to include them in other liability payable, and this is the result of the reclassification. Let's take a look at financial ratios. Let's take a look at inventory turnover days, both on Q-o-Q and Y-o-Y increased around 10 days. This is to respond to the U.S. tariff and to stock up in advance. This is the financial trend, quarterly trend. As a matter of fact, the first quarter revenue was NTD 49.7 billion and last year fourth quarter was NTD 54 billion. And compared to the first quarter last year, the revenue increased. OP income amount NTD 1 billion, also up on a Y-o-Y basis. For the financial trend, the performance of the first quarter, you can refer to the content of the slide. Let's take a look at business group revenue trend, quarterly trend. The purple block, high value-added business groups. The revenue was up by 7% Y-o-Y. Medical, revenue is over NTD 7 billion for 2 consecutive quarters, up by 21% Y-o-Y. BSG, the revenue also exceed NTD 8 billion for 2 consecutive quarters, up by 8% Y-o-Y. NCG revenue was NTD 4.5 billion, met trough in the past quarters. For IT HVA remain around more than NTD 3 billion scope. For IT original, revenue was NTD 23.5 billion, up by 7% Y-o-Y. Let's take a look at financial highlights by business group, the gross margin range. Let's look at the yellow column, the gross margin range. Medical, BSG gross margin range was around 20% to 25%. NCG was around 15% to 20%. IT HVA was around 20% to 25%. IT original was around 10% to 15%. On Y-o-Y performance, BSG gross margin range went up and other remain unchanged. On a Q-o-Q basis, the first quarter gross margin range remain unchanged on Q-o-Q basis. And the next slide is the detailed revenue breakdown by business. You can also refer to the content on the slide on your own. And we have listed all the listing companies of Qisda Groups in Taiwan. Let's look at the IT, for SIMULA, we have controlled the loss. Medical, we have 4 companies. The entire net income went up on a Y-o-Y basis, especially Norbel Baby, up by NTD 23 million. Concord hit highest in the past 4 years. BSG, we have more listing companies. The entire net income, DFI, both revenue and net income increased and hit highest in the past 2 years. AEWIN revenue went up by 18%, net income down by NTD 4 million. Ace Pillar revenue went up, net income up by NTD 26 million hit highest in the past 3 years. Partner Tech, both revenue and net income went up. MetaAge, revenue slightly went down by NTD 24 million. Net income down by NTD 136 million. It was affected by gain from financial assets revaluation. And same period last year, we enjoyed one major gain, but not the first quarter this year. So it brought a major impact. For NCG, Alpha revenue down by NTD 656 million, down by 13%. Net income down by NTD 173 million. BenQ Materials, net income went up on a Y-o-Y basis. Next, we will welcome Chairman, Peter, to bring the outlook for the second quarter.

Okay. Investors, friends from press, media, good afternoon. I remember in our previous conference, I have mentioned that the entire performance this year, the entire economic outlook, we have seen the first quarter results brought by our CFO, both revenue and net income went up on a Y-o-Y basis. And all of us pay great attention to the second quarter so far, revenue-wise, supposed to be optimistic. So far, we have -- we are in the 90-day pause for reciprocal tariff. So what we can anticipate that more or less, we should have more willingness and momentum for stock up on our production line in the second quarter, supposed to have a growth on a Y-o-Y basis. Revenue-wise, we have encountered more uncertainties and mainly comes from the 90-day pause on reciprocal tariff, estimated to see a change in mid-July, around July 8 or July 9. What will be the new policy for the reciprocal tariff? We will have to wait until mid-July to see a clear result, through the negotiation of multiple countries to the United States. What would be the change? It all depends on, after the 90-day pause, we will see a clear policy change and the impact. And the other element comes from the impact of exchange rates. In recent days, we have seen the U.S. dollar depreciation, and other currencies are enjoying the appreciation, especially the NT dollar went from NTD 33, lowest was NTD 29. In recent days, it remained around NTD 30. And it will bring impact to the profitability, especially when encountering the rapid depreciation and appreciation, it would cause influence to our profitability. And of course, the geopolitical conflicts factor in recent news in India, in Pakistan, due to the political conflicts, the small-scale conflicts, these are not something that we are happy to see, and the major impact would be expressed on our profitability. However, we will put our greatest effort to maintain our big picture in our future development. In response to all kinds of changes in our previous conferences, I have also mentioned our major development located in the 3 major high value-added business groups. You might have noticed that this competition is undergoing a change. Previously, BSG and NCG accounted for a major part revenue-wise. And this time, AIoT, in the first quarter, NTD 8.1 billion accounted for 16% of total revenue. NCG is still undergoing the trough, was NTD 4.5 billion accounted for 9%, but medical had NTD 7.2 billion accounted for 14% already. And in our previous investor conference, I have forecast, our entire group will focus on the Medical Business Group development and the growth speed. This is the business group development that could cause a difference between us to other ICT industries. That is why we're different from other ICT industry. This is our growth pattern because we focus on the medical channel development in width and in depth, and we will accelerate the augmentation and put more effort in it. And we have forecasted it. The growth scope of Medical Business Group will be the major growth driver. The growth scope on Medical Business Group will be more evident. In response to the tariff policy, this is also benefiting us. We -- I have checked the question posed by the investors. In Americas, revenue accounted for 30%. And what is the percentage of the United States? To be precise, it takes around 26% and the other 4% comes from South Americas and Canada. So America accounted for 26%, accounted for around 1/4 of the total revenue. The medical performance in America, the ratio is relatively low, around 1%. So the impact of the tariff will be relatively low as well. So in the future, we want to enhance and augment the medical development. So the policy is actually benefiting us. We won't be impacted much by the U.S. tariff because the policy has changed multiple geopolitical portfolio, and it would consume a lot of investment and take time to change. The medical sales in America, the ratio is relatively low as well. So we have more opportunity to be benefited by this. And in the second quarter investor conference, you might see the ratio of Medical Business Group in the entire HVA business group should increase. Among the 3 HVA business group, medical is in the second place. It is supposed to be the first place very soon. And it played a major role to Qisda Group and also bring a difference for us to other ICT industry. And this is the overall outlook and our development for Qisda Group. And later in Q&A session, we will bring much detailed content to you. And next, I will hand over to President, Joe Huang, to bring us the business update and each business group explanation. Thank you.

Hello. I'm President, Joe Huang. And our Chairman has brought us detailed information about the overall economic status, and hence, I won't repeat here. What you might pay great attention to should be the U.S. tariff and the appreciation of NCD (sic) [ NTD ], and we have adopted natural hedge for the NTD appreciation to lower the position of USD and to lower the impact of the tariff. Regarding the U.S. tariffs, this is also what we pay great attention to because of the uncertainty brought by the policy, especially in the U.S. market, it will influence global supply chain and momentum of economic recovery. Despite a shaky external environment, building a resilient supply chain remain to be the key to respond to this issue. We will continue to seek out other manufacturing sites and bring you a clear information in the future. IT Business Group and Medical Business Group expressed the most evident growth momentum. Due to the U.S. tariff, the 90-day pause also brought us a gap to respond to it and to ship more products. In the second quarter, we estimated to enjoy the growth on a Y-o-Y basis. Medical, our Chairman also shared are enjoying the growth. And BBHC has post hearing process. And next, we will continue the preparation of roadshow and going listing and also expanding the capability of our businesses. BSG focusing on computing power, software and service and core intelligence business. In response to the U.S. tariff, we have planned to build capability of manufacturing and service in the U.S. As to NCG, the project of emerging market are entering mass production phase and should brought -- should bring new growth momentum. And we are also actively preparing for the possible impact brought by the U.S. tariff and to seek out other manufacturing sites. And next, I will hand over to GM of each business group for the brief summary of the outlook of the second quarter.

Hello, everyone. I'm Daniel Hsueh, here is to bring you the ITG, the first quarter highlight and second quarter outlook. Global display market in the first quarter is less active than expected, especially in commercial display sales declined Y-o-Y. Home display demand remained flattish. Although Qisda display sales in the first quarter went down, through our better product portfolio, our revenue went up. In the second quarter outlook, the uncertainty of global display market demand in the second quarter, especially in the United States market will massively increase due to the U.S. tariff. Qisda commercial display customers occupy leading positions in the market due to our China Plus One strategy. However, due to the austerity measures of the U.S. government and conservative needs of private sectors, sales uncertainty of the second quarter remained high. Home display customers will face greater impact brought by U.S. tariff. We will proactively transfer to and expand the shipment volume in Vietnam. Qisda display sales amount and revenue is expected to grow Y-o-Y. We're accelerating in evaluation of other manufacturing sites.

Next, GM of CIG, Yuchin Lin.

Hello, investors. Next, I will bring you the first quarter highlight of 2025 and outlook of the second quarter. For the first quarter, demand for projector customers were conservative and were mostly for tenders and urgent orders. We had 2-digit decrease Y-o-Y. New product demand for industrial and commercial products customer remained good amid conservative inventory control. So we should enjoy a growth -- a 1-digit growth on a Y-o-Y basis. Automobile customers continue to place orders and delivery were beyond expectation. Revenue grew in double digits compared to the same period last year. In the second quarter outlook, due to the 90-day pause on reciprocal tariff, projector orders in the second quarter increased 30% compared to the first quarter. We will transfer our manufacturing sites, purchase materials and add more shifts per customers' needs. For industrial and commercial customers, after conservative inventory control and observed market demand in the first quarter, so far, we have seen a positive growth. In the second quarter, we have seen 30% more orders being placed in the second quarter. Demand for automobile industry will turn conservative in the second quarter due to the 25% tariff and will prudently observe market needs. However, our plan to increase our expenditure in new model mass production, augmentation and testing for the second half of this year remain unchanged. Thank you.

Next, let's have GM of Medical Business Group, Harry Yang.

Hello, investors. I am GM of Medical Business Group, Harry Yang. Here is to bring you the highlight of the first quarter. The overall medical growth was around 21%, reached NTD 7.2 billion. For medical devices, up by 81%. Major contribution comes from Ding Ding Drugstore. And in Medical Business Group, we have 2 categories. First, health care retail businesses. It includes Ding Ding Drugstore, BenQ healthcare brick-and-mortar channels and BenQ hearing aid stores. And our strategy remains the same. We will actively expand businesses. Other than increase our stores through M&A, our strategy will not be after the number of the stores. We want to be more precise and more efficiently to increase the synergy of our original business. Other than that, we're also actively working with the Korean and Japanese drugstores for the in-shop collaboration and also work with other domestic industry on in-shop development. For medical devices, other than our original dialyzers, we also entered Korean, Japanese and pet dialysis markets and gradually received more orders from centralized procurement system in China. And for image, based on our original technology, we have activated innovative products, ODM collaboration, hope to expand international markets. As to the equipment and consumables, we have acquired a certificate to manufacture in China and began manufacturing in China as well. That was the highlight of the first quarter. And the outlook of the second quarter, we expect a growth in the second quarter and a positive performance in Medical Business Group. Thank you.

Next, let's have GM of BSG, Joshua Tzeng.

Hello, investors and friends from press, media. I am GM of BSG, Joshua Tzeng. The first quarter revenue grew 8% Y-o-Y, and our major strategy focused on the computing power, software and smart automation, and we continue to optimize our original businesses. And among our business -- original businesses, we will continue to improve the overseas subsidiary synergy and performance. For industrial PC, we will expand investment in edge AI and hope to gain and improve in overall performance. For cybersecurity, we have received urgent orders and delivery to the United States and China. And in responding to the U.S. tariff, we are expanding the delivery volume. And in Chinese market, we are accelerating the ODM project development and domestic manufacturing. As to smart automation core business, we have entered automatic control and semiconductor markets, and we have received more order in the first quarter. As to OMO online and offline virtual and physical integration, for -- we have actively participating in the NRF Convention & EXPO and EuroCIS trade fair. And we have enhanced AI-enabled retail SEO and diner kiosk solution implementation. As to the second quarter, AIoT, we will continue to provide advanced smart solution to assist customers in digital transformation and AI implementation and optimize and adjust overseas businesses. And in the second quarter, we will be more actively in developing the collaboration opportunity and accelerate M&A progress.

Next, GM of NCG, April.

Hello, everyone. I'm April. I have shared this before. Alpha Network, the enterprise customer, they are still undergoing inventory regulation. Therefore, in the first quarter, revenue compared to the same period last year, down by 13% due to a much smaller economic scale. Therefore, the profitability decreased compared to the same period last year. As to expense, remained roughly the same. As to the R&D expenses, we have seen a slight growth. That is majorly because of the acquisition at the end of last year, the Fiber Logic Communication company. Other than that, the management expense went down. So the entire expense was not impacted much. For the second quarter outlook, we estimate to see a growth in the second quarter. This is majorly because of the Indian market begin to -- begin shipment in April, and that would contribute to our revenue. Also, wire broadband, the growth momentum is evident. Therefore, it should bring contribution in the second quarter. Overall, the second quarter should enjoy around 10% to 20% growth on Q-o-Q basis. On a Y-o-Y basis, it might not be fully recovered. So it might be a decrease. That is the outlook of the second quarter. In response to the tariff policy, the shipment should increase due to the business model. The product is supposed to reach the destination for the revenue to be included. So it might not reflect in the second quarter. However, for the third quarter, the revenue might be expressed. That was under the scenario without the impact of the U.S. tariff.

These are the first quarter results and second quarter highlight of 2025 of each business group. We will enter the Q&A session. [Operator Instructions]

Hello, everyone. I'm Chairman of Qisda, Peter Chen. For the Q&A session, thank you very much for the many feedbacks. I will -- after compiling the question, I will ask our executive to answer. First, how much is the IPO expense for the hospital IPO? And what exactly is the hearing? And also, what is the agenda after the hearing? What is the listing-related status of the hospital? And also the hedging policy, the 3 major questions. I will have our CFO, Jasmin, to answer these questions in all. Thank you.

All right. I'm Jasmin. First, for BBHC, the IPO progress, in our previous quarter, we have shared that it has completed the filing process to China Security Regulation Commission (sic) [ China Securities Regulation Commission ] and waiting for the hearing process and then enter the offering process. And we have finished the hearing process of Hong Kong Exchange. And after hearing, we will post the prospectus content on Hong Kong Exchange News website. And next, we will focus on communication with the investors and also the offering pricing. And we are accelerating the offering speed and hope to bring you good news in the future. This is the first highlight. And second, as a matter of fact, to apply -- to go listing in Hong Kong Exchange, the sponsor expense is relatively high and mostly go to the legal expenses, and they have very rigorous examination process. This is to protect the investors. And that is the major difference than that in Taiwan. In the first quarter, the IPO expense was around NTD 20 million. And in the second quarter, we might still have this expense before officially going listing. And before that, we will accelerate the progress, and this is the BBHC-related information. We hope to gain your support in this procedure. And if you want to know more information, you may go to the Hong Kong Exchange News website. You can see the 2 hospitals performance and results. And second, the recent appreciation scope of NTD is massive. Actually, the hedging policy of our group, the policy that we adopt for Qisda Group has always been natural hedge. We want to purchase and sell product in the same currency. That is the so-called natural hedge. And for the risk exposure in position for our group, we want to hedge that parts by adopting spot or forward deal to hedge those parts. So for risk exposure in position, we want to hedge that parts. However, the rapid appreciation of NTD and depreciation of USD, the impact will continue to our original businesses if it is to continue. For Qisda Groups, we have more than 200 sales offices worldwide. So we use multiple currencies in material procurement. We have used euro and RMB. And as a matter of fact, there will still be impact on original business revenue because most of our OpEx are in NTD. For example, if the exchange rate change from NTD 30-something to NTD 30, it will impact our revenue and OP income amount. It might benefit some of our subsidiaries. It might impact some of our subsidiaries as well. And we hope to minimize the impact of the exchange rates by natural hedge policy.

Next, focusing on the tariff-related issue. What's the impact to our company and our business groups? What is the overall situation? And are we also considering to establish a factory in the United States? This question, I would ask our President to answer it all. Thank you.

I think I have mentioned earlier for U.S. tariff, we have some countermeasures. We will enter a country that has lower tariff, for example, Mexico due to the USMCA agreement and other AI or supply chain product might go to the United States. Which area? We have smaller processing plants in California in response to U.S. tariff, we will have some manufacturing there. If we receive massive orders, that might not be an ideal option. So we will find other place for manufacturing. Thank you.

And I want to supplement on this topic for the -- because of the diverse production line of each business group and the exported ratio to Americas as well. Through the Qisda Grand Fleet, we have various arrangements for each business groups. This is also the benefit of our Grand Fleet. We have 2 to 3 companies that has manufacturing sites in California. So that could assist us in responding the manufacturing in the state and to integral the overall synergy. And also what is the impact after all? I have also explained earlier, the revenue in the United States accounted for only 26%. Through the Qisda Grand Fleet, we will integrate the resources and to minimize the impact of the U.S. tariff policy. And this is what I want to supplement. And I also want to answer partial questions that I have seen so far. One question is that the format of the investor conference remain unchanged. And I think that's actually a good thing. The style remain consistent. And also the topic that we should cover, the question that we should answer, we have answered them all. And some investors also questioned that we didn't really mention figures on our performance. However, in the document we have posted, there are actually many figures. We were worried that if we offer too many figures that might confuse you. Through standardizing the format of the investor conference, we want to make sure we bring consistent and clear information. And through the same format, we want to convey the logic and clear information to our investors. The other question, our investor also suggested that we should mention about our technology more. I want to express gratitude to the person who posed this question. Of course, we can talk about our technology more. We actually own lots of technologies. We have many business groups. We own a lot of technologies. And it might seem like we focus on M&A. However, it does not conflict with the fact that we own lots of technologies. For the new businesses, we can invest research and development like the conventional industry. But this kind of approach for ICT industry, it is fastly shifting. You might be used to this approach when investing in such industry. However, for medical or AIoT, through investing research and development, we will be too slow in keeping up with the pace of development. Through Qisda Grand Fleet via M&A, we can include hidden champions based on Qisda technology, manufacturing and marketing channels through integrating these resources, we can acquire and maximize the technology and most importantly, to market those technologies. So the 2 approaches do not conflict with each other. For medical, we have one principle called channels ahead. What's the most difficult part in medical is to sell our technology to hospital, to clinic. This is the most valuable part and the most difficult part. Through channel ahead approach, we can apply such technology in health care and to apply those technology effectively and rapidly and see the outcome of the application. And most importantly, we want to convert those technology to dollar signs, convert them into revenue. Slowly, you can observe that medical industry and medical devices development here in Taiwan. In the past years, those major companies, we don't really see them invest more than NTD 10 billion in medical. So we want to change such industrial ecosystem. We want to effectively and rapidly convert the investment into revenue and further convert them into profitability. And through channel ahead policy, this is our major strategy in investing in Medical Business Group. So this is the further explanation I provided. As to the suggestion that we should talk more about technology, I have spent more than 10 years in R&D and production line. I graduated from the Department of Electrical Engineering. If in the future, we have such opportunities, we should talk more about the technology and share more highlights in our technology development. Thank you very much for this opinion. And we will gradually and improve the content that we shared about the technology development. So it is almost 3:00 p.m. now. Most of the questions we have answered. Next, how are we going to face the uncertainty in 2025, especially the impact brought by the U.S. tariff and exchange rates and also the geopolitical conflicts. We are facing greater challenges with the prudent attitude, we hope to see a better performance this year than last year. Our entire team has been dedicated in providing such outcome. We hope to conquer all the obstacles that we're facing and bring you an outstanding performance. Next question, what is our further policy on capital deduction? My answer is clear. We will proceed this procedure. We will continue to make this capital reduction arrangement and hope to bring a better return to all of our shareholders. So I won't further elaborate. However, the major development for the capital reduction would remain the same and hope to gain your support and also expect us to bring you a much better return and contribution to our shareholders. Thank you very much. We should wrap up our Q&A session. Thank you.

So far, all the questions posed has been answered. Today's investor conference is coming to an end. Thank you very much to participate in Qisda Corporation, the First Quarter Results 2025 Online Investor Conference. After this conference, we will upload the audio and video documents. Thank you very much for your participation again. You may disconnect now. [Statements in English on this transcript were spoken by an interpreter present on the live call.]