© Reuters.
ChipMOS TECHNOLOGIES INC. (ticker: IMOS) reported strong earnings for the fourth quarter of 2023, with a notable 22.2% improve in income from the identical quarter of the earlier 12 months. The corporate’s web earnings noticed a major soar, tripling to NT$0.66 per share. Regardless of the sturdy quarter, full 12 months income for 2023 witnessed a decline of 9.2% in comparison with 2022. The semiconductor service supplier highlighted the automotive sector and OLED panels as main contributors to its development. ChipMOS additionally introduced an anticipated Q1 seasonality, attributing it to fewer working days and the Lunar New Yr celebrations.
Key Takeaways
- This autumn income surged by 22.2% year-over-year, with web earnings per share tripling to NT$0.66.
- Full 12 months income for 2023 declined by 9.2% in comparison with 2022.
- Automotive and OLED panels have been important development drivers within the quarter.
- The corporate ended the 12 months with whole property of TWD46,161 million and a money stability of TWD12,354 million.
- ChipMOS plans to spend money on Inexperienced Vitality, Automation, Robotics, and AI within the upcoming 12 months.
- A dividend of TWD1.8 per share is proposed, pending shareholder approval on the Might AGM.
- The corporate is optimistic about income development in 2024, with a give attention to the second half of the 12 months.
Firm Outlook
- Constructive income development is anticipated for 2024, with a stronger efficiency anticipated within the latter half.
- Capital expenditures (CapEx) for 2024 are projected to be round 15% of annual income.
- The depreciation charge is anticipated to rise by 1-3% quarterly.
- An efficient earnings tax charge of 17% to 19% is projected for 2024.
Bearish Highlights
- The total 12 months 2023 noticed a 9.2% drop in income and a 43.8% lower in web revenue in comparison with 2022.
- Automotive market demand is projected to stay flat year-over-year in 2024.
Bullish Highlights
- ChipMOS expects to proceed investing in R&D and core applied sciences to spice up its aggressive edge and broaden into high-end product markets.
- Capability enlargement for high-end testers in 2024 will align with buyer demand and help.
Misses
- Regardless of a powerful fourth quarter, the corporate’s full 12 months 2023 efficiency was weaker than the earlier 12 months, with a major lower in web revenue.
Q&A Highlights
- The corporate addressed questions on its strategic investments, indicating a give attention to Inexperienced Vitality, Automation, Robotics, and AI for 2024.
- It was confirmed that the high-end tester utilization charge stays excessive post-Lunar New Yr.
- Reminiscence merchandise are anticipated to outperform DDIC product momentum within the first quarter of 2024.
ChipMOS is positioning itself for a 12 months of strategic investments and anticipates optimistic income development, significantly within the second half of 2024. With plans to boost its product choices and capitalize on high-end market demand, the corporate is making ready for a 12 months that balances cautious optimism with strategic planning for future development.
InvestingPro Insights
ChipMOS TECHNOLOGIES INC. (IMOS), whereas showcasing a powerful fourth quarter efficiency, has a combined outlook in response to current metrics and InvestingPro Ideas. Analysts expect a gross sales decline within the present 12 months, which aligns with the corporate’s full-year income lower of 9.2% in 2023. Regardless of this, ChipMOS has been a outstanding participant in its business and has constantly rewarded shareholders, sustaining dividend funds for 11 consecutive years.
InvestingPro Knowledge highlights a present Market Cap of 20.73B USD, indicating the corporate’s substantial presence out there. The P/E Ratio, adjusted for the final twelve months as of Q3 2023, stands at 20.53, which may be enticing to traders on the lookout for development alternatives. Moreover, the corporate has a strong observe report of profitability over the past twelve months and has delivered a powerful return over the past 5 years.
For readers thinking about a deeper dive into the monetary well being and future prospects of ChipMOS, InvestingPro presents extra insights. With 9 extra InvestingPro Ideas obtainable, subscribers can achieve an enhanced understanding of the corporate’s place. To entry the following tips and extra, use the coupon code PRONEWS24 to get a further 10% off a yearly or biyearly Professional and Professional+ subscription at https://www.investing.com/professional/IMOS.
Full transcript – ChipMOS Applied sciences Inc (IMOS) This autumn 2023:
Operator: Greetings, and welcome to the ChipMOS Fourth Quarter and Full Yr 2023 Outcomes Convention Name. Right now, all contributors are in a listen-only mode. An issue-and-answer session will observe the formal presentation. I might now like to show the convention over to Dr. G.S. Shen, of ChipMOS TECHNOLOGIES Technique and Investor Relations crew to introduce the administration crew of the Firm in Convention. Dr. Shen, it’s possible you’ll start.
G.S. Shen: Thanks, operator. Welcome everybody to ChipMOS’ fourth quarter and full 12 months 2023 outcomes convention name. Becoming a member of us as we speak from the corporate are Mr. S.J. Cheng, Chairman and President; and Ms. Silvia Su, Vice President of Finance and Accounting Administration Middle. We’re additionally joined on the decision as we speak by Mr. Jesse Huang, Spokesperson and Senior Vice President of Technique and Investor Relations. S.J. will chair the assembly and evaluation enterprise highlights and supply shade on the working setting. After Silvia’s evaluation of the Firm’s key monetary outcomes, S.J. will present our present enterprise outlook. All Firm executives will then take part in an open Q&A session. Please notice, we’ve posted a presentation on the MOPS and in addition on the ChipMOS’ web site www.chipmos.com to accompany as we speak’s convention name. Earlier than we start the ready feedback, we remind you to evaluation our forward-looking statements disclaimer, which is famous because the Protected Harbor Discover on the second web page of as we speak’s presentation and within the outcomes press launch we issued. As a reminder, as we speak’s convention name is being recorded and a replay can be made obtainable later as we speak on the corporate’s web site. Right now, I might prefer to now flip the decision over to our firm’s Chairman and President, Mr. S.J. Cheng. Please go forward, sir.
S.J. Cheng: Sure. Thanks, G.S. We admire everybody becoming a member of our name as we speak. We’re more than happy with our sturdy leads to the face of broader business headwinds and market challenges. We proceed to fastidiously add capability, broaden our management, and construct worth for shareholders. When it comes to This autumn and full 12 months highlights, our This autumn income elevated 22.2% in comparison with This autumn 2022, and was up 2.6% from Q3 2023. Full 12 months 2023 income declined 9.2% in comparison with 2022 reflecting business headwinds and stock corrections. This autumn gross margin elevated 560 foundation factors to twenty.1% from 14.5% in This autumn 2022, and elevated 420 foundation factors in comparison with Q3 2023. General, gross margin decreased 430 foundation factors for 2023 to 16.6% in comparison with 2022. Internet Earnings tripled to NT$ 0.66 in This autumn 2023 from NT$ 0.22 in This autumn 2022 however decreased NT$ 0.14 in comparison with NT$ 0.8 of Q3 2023. General, 2023 is NT$ 2.60. Our general utilization charge was 62% in This autumn 2023. Meeting utilization elevated to 57% and Testing common was 61%. DDIC was at 71% and Bumping UT stage decreased to 53%. Concerning our manufacturing enterprise, our meeting represented 23.2% of This autumn income. Combined-signal and reminiscence Testing represented round 19.9% and wafer bumping represented round 20.4% of This autumn income. On a product foundation, our DDIC product represented round 37.1%, with gold bumping representing about 18.9%. Income from DRAM and SRAM represented round 17.2% of This autumn income. Our Combined-signal merchandise represented about 7.8%. As extra shade on our enterprise, our reminiscence merchandise represented about 36.2% of whole This autumn income. Reminiscence product income was up about 9.5% in comparison with Q3 2023, and elevated 9.9% on a year-over-year foundation. That is inline with broader business traits as prospects alter stock ranges. DRAM income elevated up 28.4% in comparison with Q3 and represented about 16.9% of whole This autumn income. The numerous development got here from home prospects restocking and rising DRAM rush meeting orders in This autumn to fulfill demand. Flash income represented about 19% of This autumn income, which down simply barely 2.2% in comparison with Q3. NAND Flash additionally benefitted considerably from prospects restocking and elevated about 22.4% in comparison with Q3, and represented about 37.8% of This autumn whole Flash income. Transferring onto Driver IC and gold bump income, this represented about 56% of whole This autumn 2023 income and was up considerably round 40.5% on a year-over-year foundation, however decreased 2.6% in comparison with Q3 2023. Sturdy development offset some pockets of softness. Of notice, Gold bump income was down 9% in comparison with Q3 2023 and DDIC income was little up about 0.9% in comparison with Q3 2023. Consistent with what we’ve mentioned on prior calls, Automotive has been a powerful marketplace for us over the previous 12 months. This continued in This autumn with income from Auto panels rising about 11.8% from Q3 and accounting for greater than 25% of our This autumn DDIC income, and greater than 23% of 2023 full 12 months DDIC income. We proceed to view Automotive as an essential mid and long-term development marketplace for us. For instance, we benefited from Automotive panels and OLED, which led to a 7.7% improve in our COG income in comparison with Q3, and represented about 64% of This autumn DDIC income. Concerning TDDI, it represented round 17.1% of This autumn DDIC income, with OLED at about 17.2% of This autumn DDIC income, which is considerably up 20.5% in comparison with Q3 OLED income. On an end-market foundation, whole income from Automotive and Industrial was up 6.9% in comparison with Q3 and represented about 21.2% of This autumn income. Smartphones represented about 35.2% of This autumn income, and elevated 7.3% in comparison with Q3. Shopper represented 24% of This autumn income, and elevated to 4.3% in comparison with Q3. Lastly, TVs and Computing as an finish market, accounted about 14.7% and 4.9%, respectively. Now, let me flip the decision to Ms. Silvia Su, to evaluation the fourth quarter and full 12 months 2023 monetary outcomes. Silvia, please go forward.
Silvia Su: Thanks S.J. All greenback quantities cited in our presentation are in NT {dollars}. The next numbers are based mostly on the trade charges of TWD30.62 in opposition to $1 as of December 29, 2023. All of the figures have been ready in accordance with Taiwan-Worldwide Monetary Reporting Requirements. Referencing presentation Web page 12 consolidated working outcomes abstract. For the fourth quarter of 2023, whole income was TWD5,725 million. Internet revenue attributable to the corporate was TWD482 million in This autumn. Internet earnings for the fourth quarter of 2023 have been TWD0.66 per primary widespread share or $0.43 per primary ADS. EBITDA for This autumn was TWD1,872 million. EBITDA was calculated by including depreciation and amortization along with working revenue. Return on fairness of This autumn was 7.8%. Referencing presentation Web page 13 consolidated statements of complete earnings. In comparison with 3Q 2023, whole 4Q 2023 income elevated 2.6% in comparison with 3Q 2023. 4Q 2023 gross revenue was TWD1,150 million, with gross margin at 20.1% in comparison with 15.9% in 3Q 2023. This represents a rise of 4.2 ppts. Our working bills in 4Q 2023 have been TWD445 million or 7.8% of whole income, which elevated 1.3% in comparison with 3Q 2023. Working revenue for 4Q 2023 was TWD715 million, with working revenue margin at 12.5%, which is a few 3.8 ppts improve in comparison with 3Q 2023. Internet non-operating bills in 4Q 2023 have been TWD 137 million in comparison with web non-operating earnings of TWD 231 million in 3Q 2023. The distinction is especially as a result of improve of the international trade losses of TWD 362 million to the international trade losses of TWD 195 million in 4Q 2023 from the international trade good points of TWD 167 million in 3Q 2023 and the lower of rental earnings of TWD 9 million. Revenue attributable to the Firm in 4Q 2023 decreased 17.0% in comparison with 3Q 2023. This primarily displays a rise of web non-operating bills of TWD 368 million and partially offset by the rise of working revenue of TWD 227 million and the lower of earnings tax expense of TWD 42 million. Primary weighted common excellent shares have been 727 million shares. In comparison with 4Q 2022, whole income for 4Q 2023 elevated 22.2% in comparison with 4Q 2022. Gross margin at 20.1% elevated 5.6 ppts in comparison with 4Q 2022. Working bills elevated 6.7% in comparison with 4Q 2022, nonetheless effectively under the income development charge. Working revenue margin at 12.5% elevated 5.9 ppts in comparison with 4Q 2022. Internet non-operating bills elevated TWD 7 million in comparison with 4Q 2022. Revenue attributable to the Firm elevated 211.2% in comparison with 4Q 2022. The distinction is especially attributable to a rise of working revenue of TWD 404 million and partially offset by the rise of earnings tax expense of TWD 70 million and web non-operating bills of TWD 7 million. Referencing presentation Web page 14 Consolidated Statements of Complete Earnings. In comparison with final 12 months, whole income for 2023 was TWD 21,356 million, which decreased 9.2% in comparison with 2022. Gross margin at 16.6%, decreased 4.3 ppts in comparison with 2022. Our working bills in 2023 have been TWD 1,727 million, which decreased 5.4% in comparison with 2022. Working revenue margin in 2023 was 8.9%, a lower of 4.8 ppts in comparison with 2022. Internet non-operating earnings in 2023 was TWD 360 million. The distinction was primarily attributable to a lower of the international trade good points of TWD 370 million, share of revenue of associates accounted for utilizing fairness methodology of TWD 234 million and partially offset by a rise of curiosity earnings of TWD 136 million. Internet revenue in 2023 was TWD 1,893 million, which decreased 43.8% in comparison with 2022. The distinction attributable to a lower of the working revenue of TWD 1,308 million and web non-operating earnings of TWD 451 million and partially offset by the lower of earnings tax expense of TWD 281 million. Internet earnings for the total 12 months 2023 have been TWD 2.60 per primary widespread share in comparison with TWD 4.64 per primary widespread share for the total 12 months 2022. Referencing presentation Web page 15 Consolidated Statements of Monetary Place & Key Indices. Whole property on the finish of 4Q 2023 have been TWD 46,161 million. Whole liabilities on the finish of 4Q 2023 have been TWD 21,307 million. Whole fairness on the finish of 4Q 2023 was TWD 24,854 million. Accounts receivable turnover days in 4Q 2023 have been 86 days. Stock turnover days was 53 days in 4Q 2023. Referencing presentation Web page 16 consolidated statements of money flows. As of December 31, 2023, our stability of money and money equivalents was TWD 12,354 million, which represents a rise of TWD 2,457 million in comparison with the start of the 12 months. Internet free money influx for the total 12 months 2023 was TWD 1,339 million in comparison with web free money outflow of TWD 818 million for the total 12 months 2022. The rise was primarily as a result of lower of working revenue of TWD 1,308 million and partially offset by the lower of CapEx of TWD 1,690 million, money dividend paid TWD 1,454 million and earnings tax expense of TWD 281 million. Free money stream was calculated by including depreciation, amortization, curiosity earnings along with working revenue after which subtracting CapEx, curiosity expense, earnings tax expense and dividend from the sum. Referencing presentation Web page 17 capital expenditures and depreciation. We invested TWD 1,499 million in CapEx in This autumn and TWD 3,228 million in CapEx in 2023. The breakdown of CapEx in This autumn was 4% for bumping, 61.6% for LCD Driver, 15.5% for meeting and 18.9% for testing. Depreciation bills have been TWD 1,158 million in This autumn. Depreciation bills have been TWD 4,779 million in 2023. As of January 31, 2024, the corporate’s excellent ADS quantity was roughly 4.2 million items, which represents round 11.5% of the corporate’s excellent widespread shares. That concludes the monetary evaluation. I’ll now flip the decision again to our Chairman Mr. S.J. Cheng for our outlook. Please go forward, sir.
S.J. Cheng: Thanks, Silvia. As we come off a powerful This autumn, we anticipate the traditional Q1 seasonality from fewer working days and the Lunar New Yr. We’re additionally seeing indicators that stock changes from This autumn will proceed into Q1. We’re very assured in our long-term enterprise and any fluctuations can be extra short-term in nature. We anticipate Q1 to be the trough quarter for 2024, which is inline with regular seasonal patterns. We anticipate our working momentum will enhance as we transfer by means of the 12 months with the second half of 2024 coming in higher than the primary half. That is additionally according to what we’ve heard from a few of the largest semiconductor firms. In our reminiscence product, regardless of meeting and take a look at UT are impacted by the continued destocking and softer demand at sure prospects. Nonetheless, we’re nonetheless benefiting from rebounding NAND Flash demand. Due to this fact, we expect reminiscence will outgrow DDIC product momentum in Q1. In our DDIC product, the UT stage of TV and sensible cellphone merchandise is impacted by softness in finish product demand. That mentioned, we anticipate Automotive panel and OLED demand to stay secure in comparison with different merchandise. A part of that is underlying business demand. The opposite essential driver continues to be new buyer packages ChipMOS has been ramping. This results in the excessive UT stage of high-end DDIC take a look at platforms. Within the meantime, we additionally stay optimistic on Automotive and OLED panels, that are nearly all of our buyer’s new DDIC tasks. We’re taking a conservative method with our CapEx finances in 2024, much like 2023. We plan to fastidiously spend money on Inexperienced Vitality, Automation, Robotics and AI. Concerning to the brand new added capability, together with the DDIC high-end take a look at platform can be based mostly on additional buyer demand and UT stage in help of our prospects, as we drive sturdy free money stream and keep our aggressive benefit and power. Lastly, by way of our capital allocation, our Board accredited one other dividend. This displays our stability sheet power, sturdy market place and our give attention to constructing shareholder worth. We prioritize returning capital to shareholders as a part of our general shareholder-friendly capital allocation plan. Pending shareholder approval at our Might AGM, we’ll distribute TWD1.8 per widespread share. Operator, that concludes our formal remarks, we are able to now take questions.
Operator: Thanks. Right now, we can be conducting a question-and-answer session. Our first query comes from Angela Dai from UBS. Chances are you’ll start.
Angela Dai: Why did gross margin go up a lot in This autumn?
S.J. Cheng: Margin is a continuing focus for us. In This autumn, a number of components impacted gross margin, together with combine and variable prices. We noticed a lot decrease electrical energy costs in Q423, together with a decrease charge charged and consumption decreased TWD86 million in comparison with 3Q23, and decrease gold materials costs by about TWD45 million, in comparison with 3Q23. In the meantime, the depreciation in Q423 decreased round TWD53 million, in comparison with Q323.
Angela Dai: Might you present a extra detailed outlook about 1Q24, for income and gross margin?
S.J. Cheng: We anticipate Q124 to be the traditional trough quarter for 2024, which is according to typical seasonal patterns. We anticipate our working momentum will enhance as we transfer by means of the 12 months with the second half of 2024 coming in higher than the primary half. General we’re concentrating on optimistic annual income development in 2024.
Operator: Our second query comes from Stanley Wang from SinoPac.
Stanley Wang: What’s your CapEX, depreciation and efficient earnings tax charge for 2024?
Silvia Su: In response to our finances, we’re taking a conservative method with our CapEx in 2024 anticipated to much like 2023 or round 15% of annual income. On the premise of 4Q23, the depreciation charge would improve round 1% to three% quarterly. The efficient tax charge can be round 17% to 19% in 2024.
Q – Stanley Wang: Please give me extra shade on the CapEx improve QoQ from DDIC?
Jesse Huang: The CapEx was used primarily for high-end testers in Q423.
Q – Stanley Wang: What’s the DDIC high-end tester utilization charge after Lunar New Yr vacation?
S.J. Cheng: The high-end tester utilization charge nonetheless maintains at a excessive stage. Nonetheless, the mid to low finish tester utilization charge declined.
Q – Stanley Wang: Please give us extra shade about income for the primary half and second half of 2024?
Silvia Su: A tough estimation for the primary half can be round 46% to 47% and the second half can be round 53% to54%.
Q – Stanley Wang: Evaluating income and gross margin for the expansion momentum of 2024, which one might carry out higher?
S.J. Cheng: We see optimistic income development. Nonetheless, we’d even be impacted by value will increase of inexperienced vitality necessities and electrical energy costs.
Q – Stanley Wang: Please give me extra shade about wafer financial institution digestion by product line.
Jesse Huang: We expect reminiscence will outgrow DDIC product momentum in Q124. The extent of reminiscence, NAND flash demand from module prospects seems to be higher than the others.
Q – Stanley Wang: The Firm benefited from automotive market demand in 2023, nonetheless, the top demand appears to be slowing down. What are you able to touch upon this phase in 2024?
Jesse Huang: We expect it might be flattish YoY in 2024.
Q – Stanley Wang: We see extra of your prospects inserting orders at foundries in China. What’s the competitors from China OSATs?
S.J. Cheng: We stay dedicated to investing in R&D and creating core applied sciences to fulfill prospects’ evolving necessities whereas enhancing our competitiveness and enterprise power. And we’ll proceed to enhance our high quality, operational competitiveness, and broaden the penetration charge of high-end merchandise akin to OLED, automotive panels, and high-end TVs to keep up our Firm’s aggressive benefit. We additionally anticipate to profit from the next high quality stage requirement for European and American finish manufacturers.
Q – Stanley Wang: Is there any plan for prime finish tester capability enlargement in 2024?
S.J. Cheng: Concerning to the brand new DDIC excessive finish tester capability, it is going to be based mostly on additional buyer demand and UT stage in help of our prospects as we drive sturdy free money stream and keep our aggressive benefit and power.
Operator: Thanks. And I’m not exhibiting any additional questions within the queue. I wish to flip the decision backover to G.S. Shen.
G.S. Shen: That concludes our question-and-answer session. Thanks for taking part. I’ll flip the ground again to Mr. S.J. Cheng for any closing feedback.
S.J. Cheng: Thanks everybody for becoming a member of our convention name. Please e mail our IR Group you probably have any extra questions. We admire your help. Goodbye.
Operator: Girls and gents, this concludes as we speak’s convention name. Thanks for taking part. Chances are you’ll now disconnect.
This text was generated with the help of AI and reviewed by an editor. For extra data see our T&C.