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R e t a i l M a r k e t M o n i t o r Tuesday, 17 January 2023

MONEY TALK

TT Vision Holdings (TTVHB MK) BUY

Spearheading State-of-the-art Technology For Tomorrow’s Vision (Initiate Coverage)
TTV, a specialist in machine vision equipment for the inspection of optoelectronics,
solar cells, semiconductor parts and robotic products, is listing at an undemanding Share Price RM0.34
10.1x 2023F PE. We see multiple legs of growth that can supercharge a three-year Target Price RM1.08
revenue/core net profit CAGR of 21%/32% from 2021, riding on a robust products
pipeline, huge untapped market potential and structural growth in strategic Upside 217.6%
portfolio exposure. Initiate coverage with BUY and target price of RM1.08.
INVESTMENT HIGHLIGHTS COMPANY DESCRIPTION
 Strong products pipeline to spearhead growth through 2025. TT Vision Holdings TTV is principally involved in the development
(TTV) has earmarked RM8m (or 28%) of gross proceeds for utilisation within 24 months and manufacturing of machine vision
to strengthen its R&D capabilities, enhance existing product offerings and spearhead equipment and provision of related products
new product development. These would result in the introduction of more new products and services.
and enhancement of existing products for its solar, optoelectronics, semiconductor and
robotic segments respectively, with commercialisation expected from 1H23-2025. Note STOCK DATA
that the group incurred 5-6% of total revenue for R&D from 2019-2021 which led to a
GICS sector Factory Automation Equipment
two-year revenue CAGR of 51%. Should the allocated RM8m R&D costs yield the same
historical R&D/revenue ratio, an annual revenue target of RM67m-80m could be Bloomberg ticker TTVHB MK
achieved annually from 2023-24 on such extrapolation.
Shares issued (m) 468.0
 Blue ocean market with huge untapped potential. The market size in Malaysia for
the manufacturing of specialised machinery and equipment stood at RM6.03b in 2021, Market cap (RMm) 159.1
with TTV’s market share only at a meagre 1% based on its 2021 revenue. Country Market cap (US$m) 36.7
wise, TTV’s growth engines are riding on the structural growth trends in Malaysia (US-
China trade diversion) and China (Made In China 2025). In particular, TTV is benefitting 3-mth avg turnover (US$m) n.a.
from the emergence of MNC players in Malaysia in the solar segment (Jinko Solar,
Hanwha Q Cells, Maxeon Group), semiconductor and optoelectronics companies
(Customer A, D&O) and China’s initiative in promoting its own semiconductor,
locomotive and optoelectronics industries (Shenzhen Brightsemi, Customer B), as
reflected in its strong earnings CAGR from 2019. Most of its new products pipelines
cater for these customers which are still growing organically in its respective segments.
 An attractive proxy to booming tech sector on low PEG ratio. TTV recorded a two-
year revenue CAGR of 51% in 2021 with 2021 net profit of RM8.3m from 2019’s losses.
It is on track to resume its growth momentum in 2022 (+20% yoy in 1H22). As of end-
Nov 22, the group had an unfulfilled order of RM20.8m. We are forecasting a three-year
revenue/net profit CAGR of 21%/32% respectively, stemming from new automated
optical inspection equipment and modules commercialisation from its R&D initiatives,
alongside higher utilisation on its existing capacity. Note that the segments in which
TTV is involved (solar, optoelectronics, semiconductor and robotic) are still seeing
healthy growth, driving the needs for equipment for inspection and testing.
 Initiate coverage with BUY and target price of RM1.08, based on 32.0x 2023F PE or
1x PEG, which is at a 15% discount to its semiconductor production equipment peers’
five-year average forward PE. Listing at 10.1x 2023F PE with an IPO price of RM0.34,
TTV should ample upside from here on a three-year net profit CAGR of 32% from 2021,
while such undemanding PE represents a 50-72% discount from its peers. Blue-sky
valuation if pricing at 41x 2023F PE (+1SD above SPE’s average 5-year forward PE)
suggests a potentially higher target price of RM1.38.
KEY FINANCIALS
Year to 31 Dec (RMm) 2020 2021 2022F 2023F 2024F
Net Turnover 24.9 47.3 53.8 67.2 84.0
EBITDA 4.7 12.2 16.4 18.1 26.9
Operating Profit 2.3 10.4 14.6 16.6 25.5
Net Profit 1.5 8.3 10.7 12.6 19.2
Net Profit (Adjusted) 1.5 8.3 10.7 15.8 19.2
EPS (sen) 0.3 1.8 2.3 3.4 4.1
PE (x) 105.0 19.1 14.9 10.1 8.3
P/B (x) 3.6 3.0 1.9 1.9 1.9
EV/EBITDA (x) 35.0 13.4 7.6 6.2 3.5
Dividend Yield (%) 0.0 0.0 0.0 0.0 0.0
Net Margin (%) 6.1 17.6 19.8 23.4 22.8 ANALYST
Net Debt/(Cash) to Equity (%) 0.1 0.1 (0.4) (0.6) (0.8) Desmond Chong
Interest Cover (x) 29.0 64.1 145.7 166.5 254.9 +603 2147 1980
ROE (%) 3.4 15.7 13.0 15.4 23.5 desmondchong@uobkayhian.com
Source: TTV, Bloomberg, UOB Kay Hian

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INVESTMENT HIGHLIGHTS
Strong products pipeline to anchor three-year revenue/net profit CAGR of 21%/32%. 28% of total gross proceeds raised to be
TTV has earmarked RM8m (or 28%) out of the RM28.7m gross proceeds raised, to be allocated to development of new products
utilised within 24 months to strengthen its R&D capabilities and spearhead new product and enhancement of existing products
development. These include purchase of materials and components for the development
of prototypes and product demo, alongside R&D supporting tools, equipment, software
and additional R&D personnel to spearhead growth.
As part of TTV’s R&D activities, the group has undertaken or plans to undertake new
product development as well as enhancement of existing products (details as below) and
marketing alongside products commercialisation from 1H23-1H25.

FIGURE 1: DEVELOPMENT OF NEW PRODUCTS

Source: TTV

FIGURE 2: ENHANCEMENT OF EXISTING PRODUCTS

Source: TTV

To put things in perspective, the R&D expenditure incurred for 2019-21 and Jun 22 was Assuming historical R&D/revenue ratio of 5-
hovering around RM1.8m-2.2m and RM0.6m respectively, representing 5-6% of total 6%, the RM8m R&D costs to be utilised
revenue for each year respectively. This includes salaries, wages and training expenses within 24 months could contribute to annual
for its R&D employees, as well as purchases of parts and materials for the development of revenue target of RM67m-80m in 2023-25
prototypes and products demo. Should the allocated RM8m R&D costs spent within two
years yield the same historical R&D/revenue ratio, an annual revenue target of RM67m-
80m could be achieved annually based on the ratio computation.

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In terms of marketing activities, the group participated in exhibitions for the semiconductor More aggressive sales and marketing
and solar sectors in China, Taiwan, Malaysia and China from 2019-2021. Going forward, activities to push product sales
TTV intends to carry out proactive marketing activities by participating in more exhibitions
and conferences in 2023 and 2024 and expect more sales and marketing activities
following the border reopening globally. The markets where the group intends to have its
exhibitions and conferences include China, Taiwan, Malaysia, Germany and the US.

FIGURE 3: PERFORMANCE OF SEMICONDUCTOR MANUFACTURING EQUIPMENT INDUSTRY

Source: TTV

Blue ocean market with huge untapped potential. According to the Department of Huge untapped potential for TTV given a
Statistics Malaysia, the market size in Malaysia for the manufacturing of specialised meagre market share of only 1%.
machinery and equipment in which TTV operates stood at RM6.03b in 2021. Relative to
TTV’s revenue size of RM43.5m, TTV’s market share was only a meagre 1%. Only a
handful of listed semiconductor production equipment (SPE) players in Malaysia with
decent profitability are operating in the semiconductor and sub segments, ie the consumer
electronics, healthcare, automobile, energy and medical segments, due to relatively
medium-to-high barriers of entry. Note that these listed companies achieved a two-year
revenue/net profit CAGR of 27%/30% from 2019 (vs TTV’s two-year revenue CAGR of
51% and turnaround from 2019’s net loss of RM4.3m to 2021’s net profit of RM8.3m), vis-
a-vis global sales of manufacturing equipment that grew at a CAGR of 31%. With TTV’s
strong products pipeline alongside execution, we believe the growth potential could be
meaningful given its relatively small earnings base.
Country wise, TTV’s growth engines are riding on the structural growth trends in Malaysia Benefiting from structural growth trends in
(US-China trade diversion) and China (Made In China 2025). In particular, TTV is Malaysia (US-China trade diversion) and
benefitting from the emergence of MNC players in Malaysia in the solar segment (Jinko China (Made In China 2025)
Solar, Hanwha Q Cells, Maxeon Group), semiconductor and optoelectronics companies
(Customer A, D&O) and China’s initiative in promoting its own semiconductor, locomotive
and optoelectronics industries (Shenzhen Brightsemi, Customer B), as reflected in its
strong earnings CAGR from 2019. Most of its new products pipelines cater for these
customers which are still growing organically in its respective segments
In terms of TTV’s production capacity and output for the manufacturing of its machine Ample space for expansion
vision equipment and modules (based mainly on the production floor space), ample
capacities are available as shown below:

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FIGURE 4: ESTIMATED PRODUCTION CAPACITY, OUTPUT AND UTILISATION RATES 

Source: TTV

Spearheading growth in high-growth industries. TTV services two key markets, Malaysia and China still the main growth
namely Malaysia (2021 revenue contribution: 81%, 1H22: 24%) and China (2021 revenue engines for TTV
contribution: 24%, 1H22: 73%) whereby Malaysia is expected to resume its strong FDI
following the US-China trade diversion (3Q22: RM860.8b with manufacturing sector
having the largest share of 43.5%) and China is driving 70% self sufficiency on “Made in
China 2025”. In terms of segmental exposure, the group has >2/3 of revenue exposure in
the semiconductor segment (discrete component and IC inspection) while having the lion’s
share of the solar segment (inspection and sorting) in 2019-21.

FIGURE 5: SEGMENTAL BREAKDOWN

Source: TTV

Huge untapped potential in solar energy. Solar is expected to account for 22% of global Solar energy to gain more traction from 2020
electricity generation in 2050 from about 2% in 2019 (Figure 6), according to Bloomberg. onwards
This is underpinned by the global decarbonisation policy and falling levelised cost of solar,
which is expected to fall 60% by 2050. Furthermore, global installed photovoltaic (PV)
capacity reached 609GW in 2019 and is expected to double in the next five years.

FIGURE 6: GLOBAL POWER GENERATION MIX FORECAST

Source: BNEF, UOB Kay Hian

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Diverted from impact of import tariffs. In Jan 18, the US government imposed a tariff on Sheltered from impact of US import tariffs on
the import of certain crystalline silicone solar cells and modules (excluding thin film solar certain solar cells and modules
cells and modules) into the US effective Feb 18. Subsequently, the US on Sep 18 and Feb
22 exempted some types of crystalline silicone solar cells and modules which cover
interdigitated back contract (IBC) solar cells and modules as well as bifacial solar panels.
TTV manufactures solar cell inspection equipment mainly for IBC solar cell manufacturing
and the group’s customers include solar cell manufacturers. While the above import tariffs
would affect the group’s customers who are exporting their products to the US, we
observe that the focus in 2022 was diverted to discrete component and IC inspection
equipment – the same type of inspection equipment as its optoelectronic inspection
equipment, ie automated optical inspection (AOI) equipment such as wafer and packaging
AOI equipment, wire bond AOI equipment and vision inspection modules.

FIGURE 7: TYPICAL WAFER-LEVEL ASSEMBLY AND PACKAGING PROCESS AND RANGE OF AOI
EQUIPMENT

Source: TTV

5x revenue jump for sales of discrete component and IC inspection equipment. Note Meaningful jump in revenue on recorded
that the group’s AOI equipment is used in the: a) assembly and packaging process sales of wire bond AOI equipment to China
including inspection of wafers after dicing, wire bonding and encapsulation; and b) wafer and Malaysia customers
level assembly and packaging process including inspection of package singulation for the
usage of optoelectronic inspection equipment and discerte component and IC inspection
equipment. Meanwhile for its vision inspection module, which is similar to an AOI
equipment, the functions are solely to carry out vision inspection without any post-handling
inspection fuction. It is noteworthy that in Jun 22, the discrete component and IC
inspection equipment segment contributed 71.1% of the total revenue (or 5x growth vs Jun
21), with recorded sales of 23 units of wire bond AOI equipment to customers in China
and Malaysia, compared with four units of wire bond AOI equipment in 2021.

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COMPANY HIGHLIGHTS
TTV is an investment holding company. Through their subsidiaries, they are principally
involved in the development and manufacturing of machine vision equipment and
provision of related products and services. TTV’s machine vision equipment is primarily
used for the inspection of optoelectronics, solar cells, discrete components and ICs, as
well as used in vision guided robotic equipment. TTV’s business activities typically entail
equipment design, software development, manufacture, assembly and installation of
equipment and/or modules. Their equipment is usually incorporated in their customers’
manufacturing lines while some are standalone equipment.

FIGURE 8: OVERVIEW OF TTV’S PRODUCTS AND SERVICES

Source: TTV

A small proportion of the group’s business provides other related products and services.
These include upgrading of machines, sale of spare parts, manufacture of other industrial
automated equipment, provision of repair and maintenance services, sale of software as
well as provision of training services.
Generally, customers purchase their machine vision equipment either as part of their
capital expenditure plans, ie new manufacturing lines, for retrofitting and/or upgrading of
existing manufacturing lines, or for the replacement of existing equipment.
The general lifespan of their machine vision equipment ranges from five years to 10 years.
However, the lifespan of the equipment would also depend on new technologies in
machine vision such as improved capabilities in increasing vision inspection throughput,
changes in the technical specifications including level of tolerance as well as usage and
maintenance of the equipment which would contribute to wear and tear.
The group’s machine vision equipment is primarily designed to inspect semiconductor
parts, components and devices to assess material and/or manufacturing defects or for
sorting purposes. Their machine vision equipment can detect surface defects,
contamination, breakages in circuits; undertake measurements; or differentiate colours.
Once an item has been inspected, identified or measured, the result is transmitted to a
controller which is a computer processor to initiate the next action steps. Some of their
equipment also incorporates reject handling, testing and sorting functions as the next
action step after the visual inspection or identification process.
The need to ensure product quality is paramount as defects must be detected early in the
manufacturing process before more time and costs are incurred further down the
manufacturing process. Machine vision equipment is the only practical manner to check
for product quality at the speed and accuracy which is required with the miniaturisation of
semiconductor parts, components and devices.
In addition, machine vision equipment that is used for guidance purposes is commonly
incorporated into robotics to guide a robot or robotic arm to a specific location or position
with the aim of carrying out specific tasks such as picking and placing of semiconductor
parts or components.

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FIGURE 9: OVERVIEW OF TTV’S PRODUCTS AND SERVICES

Source: TTV

FIGURE 10: KEY MILESTONES

Year Key Milestones
2001  TTV incorporated as a private limited company.
2002  Commenced initial business operations in Sungai Ara, Penang as a manufacturer of vision inspection modules serving mostly semiconductor manufacturers based in
Penang.
 TTV secured an order for their first vision inspection module for post solder paste inspection for an IC manufacturer in Penang.
2004  TTV commences the exports of vision inspection modules to semiconductor manufacturers in China, the Philippines and Singapore.
 They further expanded their coverage to the optoelectronic sector, mainly LED, where they designed and supplied vision inspection software to Customer A.
 TTV was granted MSC Malaysia status by MDEC including Pioneer Status from MITI which entitled the company to 100% corporate tax exemption for five years from Aug
04 to Aug 09, which was later extended for an additional five years up to Aug 14.
2006  TTV acquired current two-acre land (which houses their current head office and principal manufacturing facility) in Bayan Lepas Industrial Park, Penang.
 They started the construction of a 22,800-sf factory on the said land in the same year.
2007  TTV sold their first post taping AOI equipment to a trading company based in Hong Kong.
2008  After the construction was completed, they moved from their previous operational facility in Sungai Ara, Penang into their current head office and manufacturing facility in
Bayan Lepas Industrial Park, Penang.
2009  TT Innovation (which was incorporated in 2006) commenced business operations in the development and manufacture of machine vision equipment with a primary focus
on R&D-related activities, particularly in solar cell inspection equipment.
 TT Innovation was awarded a grant of RM3.2m from the Ministry of Science, Technology and Innovation for the development of a solar cell sorter.
 TTV was awarded a grant of RM1.8m from Malaysia External Trade Development Corporation (MATRADE) for the promotion of the branding of ‘TT Vision’ to the China
market.
2009/2010  TTV and TT Innovation obtained ISO 9001:2008 accredited by TÜV Rheinland Cert GmbH. This was later renewed and replaced with ISO 9001:2015 which is valid up to
Jul 24.
2010  TTV secured a venture capital investment from MTDC totalling RM8.75m through the issuance of 8,750,000 RCCPS.
 They expanded into the solar industry when they developed and commercialised their first solar cell sorter to a solar cell manufacturer in China.
2013/2014  TTV was awarded the following grants:
 MIDA - RM5.47m for the R&D of solar and optoelectronic inspection equipment, training as well as modernisation of their facilities in 2013.
 SME Corporation Malaysia - RM0.40m for innovation development in 2013.
 MTDC - RM1.65m for the commercialisation of a solar wafer sorter in 2014.
2014  In 2014, they expanded their customer base in the solar industry where they signed an agreement with SunPower Philippines Manufacturing to jointly develop and
manufacture a solar cell sorter for IBC solar cells (“IBC solar cell sorter”).
2015  On 1 Oct 15, TTV entered into a master supply agreement with SunPower Corporation which formalised the general terms and conditions relating to purchases of the IBC
solar cell sorter. As at 30 Nov 22, the said agreement is subsisting and has been assigned to Maxeon Solar due to SunPower Corporation’s restructuring exercise.
 TT Innovation was granted a patent for “Solar Cell Sorting Conveyor and Methodology Thereof” from MyIPO and the patent is valid up to 2031.
2016  TTV was granted a patent for “Multiple Scan Single Pass Line Scan Apparatus for Solar Cell Inspection and Methodology Thereof” from MyIPO and the patent is valid up to
2031.
2017  TTV developed vision-guided robotic equipment using a third-party robotic system which is integrated with their vision inspection module. This was for an EMS customer in
Penang.
2018  TTV was awarded a grant of RM1.00m from MDEC for the development and commercialisation of solar cell sorter for high efficiency solar cells.
2019  TTVHB was listed on the LEAP Market of Bursa Securities, raising total gross proceeds of RM7.20m.
 They expanded their manufacturing facility to incorporate a new wing in their existing operational facilities with an additional built-up area of 30,200sf to house their
extended manufacturing operations as well as their expanded office.
2020  TTV entered into a master supply agreement with Hanwha Malaysia for purchases of solar cell inspection equipment.
 They commenced their business relationship with Dominant Opto through sales of optoelectronic inspection equipment.
2021  TTV undertook a voluntary withdrawal from the Official List of LEAP Market to facilitate their intention to pursue the listing.
2022  TTV received a purchase order for their first X-ray automated inspection (AXI) equipment and it is targeted to be delivered by end-23.
 They were delisted from the Official List of LEAP Market.
Source: TTV

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FIGURE 11: ALLOCATION OF IPO SHARES

Allocations No. of Shares (m) %*
Public Issue
Malaysian Public 23.4 5.0
Eligible Directors & Employees 18.1 3.9
Private Placement to Selected Investors 53.5 11.4
Enlarged No. of Shares Upon Listing (m) 468.0
IPO Price Per Share (RM) 0.34
Market Capitalisation (RMm)# 159.1
* Based on enlarged capital of 468.0m shares upon listing
# Based on the IPO price and enlarged capital of 468.0m shares upon listing
Source: TTV

The gross proceeds from the public issue amounting to RM28.7m are expected to be used
in the following manner:

FIGURE 12: UTILISATION OF IPO PROCEEDS

Utilisation of Proceeds (RM’000) (%) Estimated Timeframe for Utilisation*
Repayment of Bank Borrowings 6.0 20.9 Within 6 months
R&D Expenditure 8.0 27.9 Within 24 months
Marketing Activities 0.9 3.0 Within 24 months
Working Capital Requirements 10.7 37.2 Within 24 months
Estimated Listing Expenses 3.2 11.1 Immediate
Total 28.7 100.0
* From the date of listing of shares on the ACE market
Source: TTV

FIGURE 13: GROUP STRUCTURE AFTER LISTING

Source: TTV

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INDUSTRY OUTLOOK
Machine vision equipment is used for four main functions, namely inspection, Machine vision equipment plays a critical
identification, measurement and guidance. Machine vision equipment comprises a role in the manufacturing of E&E products
combination of hardware and software and is based on capturing and processing images.
The key hardware is the camera with its lenses, shutter mechanisms and light source to
capture images. Once the images are captured, the software is used to process them and
subsequently issue actionable instruction. The key benefits of machine vision compared
with human vision include faster speed, higher quality, higher productivity and lower cost
throughput in examining objects. In situations where objects being handled are in
microscale or throughput of several tens of thousands of units per hour, machine vision is
the only practical means to undertake such tasks.
Semiconductor equipment plays a critical role in the manufacturing of electrical and
electronics (E&E) products as most high-volume operations involve highly-automated
processes. This is due to the need to reduce per unit product costs, attain high volume
output within a short time frame, increase product quality, and in some situations handle
very small items at high speed.

FIGURE 14: INDUSTRIES TTV GROUP INVOLVED IN

Source: TTV

Vision inspection is an important process in the manufacturing of E&E products such as

light emitting diode (LED) and solar cell components. This is because the production
process of E&E products involves many complex manufacturing steps. If defects occur
early in the process, all subsequent work undertaken would be wasted. Therefore, vision
systems are set up to inspect defects at critical points in the manufacturing process to
ensure that a certain yield of acceptable products can be confirmed and maintained.
Strong growth in Malaysia E&E industry and its importance to Malaysia exports. In Malaysia’s E&E GDP recorded a CAGR of
2021, the real GDP of Malaysia’s economy, the manufacturing industry and the E&E 8.4% from 2019-21 and registered as the
sector grew 3.1%, 9.5% and 14.6% respectively compared with 2020. The real GDP main contributor to Malaysia’s total exports
growth in the E&E sector was supported by robust external demand for semiconductor
components. According to Department of Statistics Malaysia (DOSM), the E&E sector is
the largest manufacturing sector in Malaysia, accounting for 31.1% of the real GDP of
Malaysia’s manufacturing industry, and earning an export revenue of RM455.7b in 2021.
For 9M22, the real GDP of Malaysia’s economy, the manufacturing sector and the E&E
industry grew 9.3%, 9.7% and 16.0% compared with 9M21 respectively.
Malaysia’s E&E industry is the largest contributor to the country’s overall manufacturing
sector and a major growth driver for Malaysia’s economy. In 2021, E&E exports accounted
for 42.7% of Malaysia’s total exports of manufactured goods. For 9M22, E&E exports
accounted for 44.9% of Malaysia’s total exports of manufactured goods. Semiconductor
manufacturing equipment plays a major supporting role in E&E manufacturing.

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FIGURE 15: REAL GDP

Source: Department of Statistics Malaysia (DOSM)

Performance of global E&E products and semiconductor industry. The exports of Global exports of E&E products and
E&E products from a global perspective recorded a CAGR of 6.5% in 2017-21. Between semiconductors sales recorded a CAGR of
2019 and 2021, global exports of E&E products grew at a CAGR of 10.0%, in line with the 6.5% and 7.8% between 2017 and 2021
recovery of the global economy from the COVID-19 pandemic. In 2021, the top three
largest exporters of E&E products were China, Hong Kong and the US.
Global sales of semiconductors grew 6.8% to US$440.4b in 2020, mainly driven by
sensors, memory and integrated circuit products. In 2021, global sales of semiconductors
grew 26.2% to US$555.9b, mainly driven by significant growth across major product
categories, particularly integrated circuit products, sensors and discrete semiconductors.
For 9M22, global sales of semiconductors grew 9.9% compared with 9M21. However, in
July, August and September 2022, the global sales of semiconductor declined 1.8%, 4.8%
and 2.5% respectively compared with the corresponding periods in 2021. (Source: Vital
Factor Analysis) In 2021, semiconductor sales in Asia Pacific including Malaysia and
China accounted for 61.7%, or US$343.0b, of global semiconductor sales. TTV mainly
serves the markets in Malaysia and China.

FIGURE 16: INDUSTRIES TTV GROUP INVOLVED IN

Source: TTV

Overview of optoelectronics market segment. The optoelectronics segment includes Global sales of optoelectronics grew at a
LED displays and lamps, and other opto-sensing and emitting semiconductor devices CAGR of 2.2% between 2019 and 2021
such as laser pick-up and transmitters, image sensors, infrared emitters and detectors,
and light sensors. Between 2019 and 2021, global sales of optoelectronics grew at a
CAGR of 2.2% from US$41.6b in 2019 to US$43.4b in 2021. In 2021, global
optoelectronic sales grew 7.4% compared with 2020
Overview of solar cell and module segments. Global production of solar cells and Global production of solar cells and
modules recorded a CAGR of 29.4% and 31.3% respectively between 2019 and 2021. In modules recorded a CAGR of 29.4% and
2020, global solar cell and module production grew 35.4% and 34.8% respectively 31.3% respectively in 2019–21
compared with 2019. Based on the latest available information, in 2021, China was the
largest producer of solar cells and modules, having accounted for 81.2% and 75.0% of the
global production of such products respectively. In the same year, Malaysia was the
second- and third-largest global producer of solar cells and modules, having accounted for
5.4% and 3.7% of the global production of such products respectively.

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The higher production of solar cells and modules between 2019 and 2021 indicates
growth in demand for solar cells and modules. This will continue to create opportunities for
manufacturers of semiconductor equipment who are serving the solar cell and module
segments. Between 2019 and 2021, the global cumulative PV installed capacity grew at a
CAGR of 19.9%, from 591.1 gigawatt (GW) in 2019 to 849.5GW in 2021. The continuing
growth in solar installed capacity and electricity generation will provide opportunities to
manufacturers of semiconductor equipment serving the solar industry, including machine
vision equipment.

FIGURE 17: GLOBAL SOLAR CELL/MODULE PRODUCTION AND CUMULATIVE PV INSTALLED CAPACITY

Source: TTV

Performance of semiconductor manufacturing equipment industry. Between 2019 Global sales of semiconductor
and 2021, global sales of semiconductor manufacturing equipment grew at a CAGR of manufacturing equipment grew at a
31.1%. Semiconductor manufacturing equipment sales grew 44.2% from US$71.2b in CAGR of 31.1% in 2019-21
2020 to US$102.6b in 2021, where China recorded the highest sales of US$29.7b. The
growth in the sales of semiconductor manufacturing equipment was mainly driven by the
expansion of production capacity by semiconductor manufacturers amid a shortage of
semiconductors.
Between 2019 and 2021, the global import and export of semiconductor manufacturing
equipment grew at a CAGR of 23.0% and 23.9% respectively. Between 2019 and 2021,
Malaysia’s imports and exports of semiconductor manufacturing equipment grew at a
CAGR of 18.5% and 49.7% respectively. In 2021, the import and export value of
semiconductor manufacturing equipment in Malaysia grew 62.9% and 69.0% respectively
compared with 2020, mainly due to the expansion of production capacity by
semiconductor manufacturers. The growth in the external trade of semiconductor
manufacturing equipment augurs well for operators in this industry.
Medium to high barriers to entry for manufacturing of machine vision equipment Technical skills and high concentration
industry. This is predicated by the need for technical and specialised skills in terms of of key players are the key barriers to
machine vision equipment to be able to capture the images of micro-sized circuits and machine vision equipment industry
components at high processing speed and accuracy as well as quality of processing in
terms of low error rates. From the market perspective, the barriers to entry are supported
by the high concentration ratio of players where the revenue of the top three operators
represents approximately three-quarters of the revenue from a selection of operators. The
high concentration ratio would continue to exert competitive pressure on new entrants that
have yet to establish a track record in the industry. However, machine vision equipment is
not subject to any import or export tariffs and there are no special licences, regulations or
restrictions governing the entry of new players into this industry. In addition, the capital
requirement to enter the industry is low and the input materials required for the
manufacturing of machine vision equipment are widely available.
The short- to medium-term prospects of the semiconductor manufacturing industry Weak demand for consumer electronics
are expected to be subdued mainly due to lower demand for consumer electronics such is near-term headwind for
as laptops and personal computers, as well as inflationary pressure and lower global semiconductor manufacturing industry
economic growth. The lower demand for consumer electronics is mainly due to the cyclical
nature after the high sales volume during the COVID-19 period. Nevertheless, demand for
optoelectronics and solar within the semiconductor industry is expected to continue
growing, mainly supported by increasing adoption of renewable energy including solar PV
systems as well as the use of energy-efficient lighting such as LED lighting.

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R e t a i l M a r k e t M o n i t o r Tuesday, 17 January 2023

KEY RISKS
Dependency on major customers. In FPE 2022, Shenzhen Brightsemi Technology Co, Portfolio diversification to reduce customer
Customer B and Dominant Opto contributed 43.10%, 20.52% and 13.76% to TTV’s concentration risk
revenue respectively. Meanwhile, in FYE 2021, revenue contributions from Dominant Opto
and Hanwha Malaysia and its related companies grew from 16.96% and 6.90% in FYE
2020 to 36.17% and 33.15% respectively. However, in FPE 2022, the revenue contribution
from Dominant Opto decreased to 13.76% as some of the sales orders are only expected
to be fully fulfilled in 2H22 whilst the revenue contribution from Hanwha Malaysia and its
related companies fell to 2.60% as a result of the deferment of its capital expenditure plan.
Prior to FYE 2021, Maxeon group contributed substantially to TTV’s revenue at 57.58%
and 59.50% in FYE 2019 and FYE 2020 respectively. However, the revenue contribution
reduced to 3.88% in FYE 2021 and 4.90% in FPE 2022. Similarly, Customer A, which
contributed 12.84% to TTV’s revenue in FYE 2019, saw the contribution reduced to
5.65%, 4.78% and 5.55% in FYE 2020, FYE 2021 and FPE 2022 respectively. The drop in
revenue contribution from Maxeon group and Customer A was mainly due to the
deferment of their internal capital expenditure plans which resulted in lower purchase of
certain machine vision equipment. The downtrend in revenue contribution from both of
them indicates decreasing dependency on this group of customers.

FIGURE 18: MAJOR CUSTOMER PROFILE

Customer Business/Industry Segment Relationship Tenure Revenue Contribution
Dominant Opto LED 2 years FY20 : 16.96%
FY21 : 36.17%
FYE22 : 13.76%
Hanhwa Malaysia and Solar 5 years FY20 : 6.90%
its related companies FY21 : 33.15%
Customer A LED 18 years FY19 : 12.84%
FY20 : 5.65%
FY21 : 4.78%
FPE22 : 5.55%
Maxeon Group Solar 9 years FY19 : 57.58%
FY20 : 59.50%
FY21 : 3.88%
Customer B Semiconductors 2 years FY20 : 5.18%
FY21 : 9.28%
FYE22 : 20.52%
Shenzhen Brightsemi Trading 1 year FPE22 : 43.10%
Technology Co., Ltd.
Source: TTV, UOB Kay Hian

Subject to risk of foreign exchange rate fluctuations. The group is exposed to foreign Foreign exchange rate fluctuations may
currency risk as a result of sales to both domestic and international clients and purchases pose a risk to the group
of imported raw materials. In 2019, 2020, 2021 and FPE2022, the group recorded 72.76%,
66.00%, 20.59%, and 75.58% of its sales in US dollars, while 48.84%, 41.78%, 45.46%,
and 39.85% of its purchases were made in foreign currencies. They are susceptible to
foreign currency exchange gains or losses as a result of timing discrepancies between
billings/invoices and actual receipts from customers/payment to suppliers. Consequently,
any unfavourable movements in these foreign currency rates could have a negative effect
on the group's financial performance and profitability.
Risk of inadequate insurance coverage. As at 30 Nov 22, the total sum insured Inadequate insurance coverage may
amounted to approximately RM27.3m. However, the group’s current insurance coverage severely hurt the group’s financials if there
may be inadequate to cover all losses, damages or liabilities. For instance, floods, fires, is any unexpected accident
storms or other events may cause damage to their production facilities in excess of the
insurance coverage and may lead to significant costs incurred in connection with remedial
and repair work that must be borne by them. If they suffer any losses or incur liabilities
arising from insufficiently insured risk or any uninsured risk, their business and operating
results may be adversely affected. In addition, their insurance premiums may also
increase due to the insurance claims made. In such circumstances, the group’s financial
results may be materially and adversely affected.

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Material shortage. The group’s manufacturing operations are dependent on certain Material shortage not only hinders their
materials including vision components such as camera, lenses, lightings and sensors, growth, but also affects their reputation
computer-related devices, and mechanical, electrical and pneumatic parts. They source and may subject them to LAD claims
these materials from suppliers in Malaysia as well as other countries. While the group is
not dependent on any single supplier, any serious and prolonged global shortage of or
supply disruptions to such materials may lead to a loss of business opportunities and
delays in the group’s production. Furthermore, they do not enter into any long-term supply
agreements with their suppliers for a continuous supply of materials. As such, there can
be no assurance that they will be able to consistently source their materials at the quality
and quantity required and at competitive prices. Any delay in production could result in a
delay in delivery to their customers which may affect their reputation and/or subject them
to LAD claims, which would adversely affect their financial performance.
Absence of long-term contracts with its customers. The group’s sales are secured Absence of long-term contracts could
based on confirmed purchase orders placed by customers on an as-needed basis as it disrupt growth in revenue and earnings
does not have any long-term contracts with its customers. The absence of long-term
contracts with its customers is due to the nature of the industry in which its customers
operate, which is susceptible to technological advancement, market trends and rapid
improvements in industry standards, all of which would result in frequent modifications to
product designs and specifications. The absence of long-term contracts may pose a risk
as customers are not obliged to purchase products from Nationgate.
The loss of any customer or reduction in any sale order or quantity from any customer,
particularly from the group's major customers, if not promptly replaced with new customers
or additional orders from other existing customers, may result in a loss of revenue and
negatively impact the financial condition and operating results. In some situations, the
group may proceed to build the equipment based on customers’ sales forecasts and
letters of intent without any confirmed purchase orders. There is a risk that customers may
not proceed with the purchase order as agreed upon completion of the equipment. If the
group is unable to sell the equipment to another customer, they may have to write off this
equipment after a certain duration from their inventory as part of their accounting policy,
which may adversely affect their financial performance.
For FYE 2019, they wrote off inventory of RM0.69m pertaining to a wire bond AOI
equipment which was manufactured for a long-term customer who did not proceed with a
confirmed purchase order in FYE 2018. This equipment was included in the group’s
inventories in FYE 2018. Certain parts and components of the same equipment were
subsequently recovered and used in the production of another equipment which was sold
to another customer in 2020.

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R e t a i l M a r k e t M o n i t o r Tuesday, 17 January 2023

FINANCIALS
Recorded stellar two-year revenue CAGR of 51.3% from 2019-21. Revenue grew FIGURE 19: REVENUE BY BUSINESS SEGMENT
consistently in 2020 (+21%) and subsequently improved by leaps and bounds thereafter to
2021 (two-year revenue CAGR of +51%).
Notably, the sharp improvement in 2020-21 was largely contributed by growth from a rise
in orders from machine vision equipment related to: a) increase in sales volume for AOI
equipment and vision inspection modules for optoelectronics applications (30 units of wire
bond AOI equipment and 27 units of vision inspection modules in 2021 vs 7 units of wire
bond AOI equipment and 12 units of vision inspection modules in 2020), b) increase in
sales volume for AOI equipment for semiconductor applications (12 units of wire bond AOI
equipment in 2021 vs 1 unit of wire bond AOI equipment in 2020), and c) increase in sales
Source: TTV
volume of vision inspection modules for solar cell applications (125 units of vision
inspection modules including FRV-AOI vision modules and PL-AOI vision modules in 2021 FIGURE 20: STATEMENTS OF PROFIT AND LOSS
vs 1 unit of quad solar cell sorter and 16 units of vision inspection modules in 2020).
Meanwhile, other related products and services grew 46% due to an increase in the
provision of upgrading of machines for some existing customers.
On a geographical basis, Malaysia contributed the strongest growth of 80-90% from
2019-21, due to the overall boom related to optoelectronic inspection equipment, solar cell
inspection equipment, as well as discrete component and IC inspection equipment.
However, China contributed 78% in FPE 2022 due to the difference in capex cycle but
management expected contribution from Malaysia to overtake China’s again in 2022. (Part
of the sales orders from D&O are only expected to be fulfilled in 2H22) On the other hand,
foreign markets contributed 10-20%, predominantly driven by foreign customers in China. Source: TTV

Core PATAMI grew by a wider 450% from 2020-21 on margin expansion despite
incurring losses in 2019. The group recorded a decent core PATAMI margin range of
6.1-19.0% with a superior margin recorded in FPE 22. The decent core PATAMI margin of
19.0% evidenced in FPE2022 was related to: a) higher gross margin for manufacturing of
machine vision equipment, b) lower R&D expenses, and c) gain in forex. The group
recorded a loss in 2019 mainly due to the adverse effect from the China-US trade tiff and
delay of major customers’ capex plans.
No dividend policy. While TTV does not have any formal dividend policy, it is the board’s
policy to recommend dividends to allow its shareholders to participate in the profits of the
group. The payment of dividends by TTV’s subsidiaries is dependent upon various factors,
including but not limited to its distributable profits, financial performance, and cash flow
requirements for operations and capital expenditures, as well as other factors that its
respective boards of directors deem relevant. There is no dividend restriction being
imposed on the group currently.

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R e t a i l M a r k e t M o n i t o r Tuesday, 17 January 2023

VALUATION
Initiate coverage with BUY and target price of RM1.08, based on 32.0x 2023F PE or 1x Blue-sky valuation if pricing at 1x PEG ratio
PEG, which is at a 15% discount to its SPE peers’ five-year average forward PE. Listing at suggests a potentially higher target price of
10.1x 2023F PE with an IPO price of RM0.34, we see ample upside from here on a three- RM1.38 (at 41.0x 2022F PE)
year net profit CAGR of 32%, while such undemanding PE represents a 50-72% discount
from its peers. Blue-sky valuation if pricing at 41x 2023F PE (+1SD above SPE’s average
five-year mean PE) suggests a potentially higher target price of RM1.38.
An attractive proxy to booming tech sector on low PEG ratio. TTV recorded a two- Still in high-growth phase with outstanding
year revenue CAGR of 51% in 2021 and recorded 2021 profit of RM8.3m from 2019’s purchase orders of RM20.8m to be fulfilled
losses. It is on track to resume its growth momentum in 2022 (+20% yoy in 1H22). As at
end-Nov22, TTV had outstanding secured purchase orders amounting to RM20.8m which
are expected to be recognised in its revenue progressively.
Forecasting a three-year revenue/net profit CAGR of 21%/32%, stemming from new Expects three-year revenue/core net profit
AOI equipment and modules commercialisation from its R&D initiatives, alongside higher CAGR of 21%/32%
utilisation on its existing capacity. Note that segments in which TTV is involved (solar,
optoelectronics, semiconductor and robotic) are still seeing healthy growth, hence driving
the need for equipment for inspection and testing. In terms of margins, we are expecting
margin improvement in 2023 and 2024 on better operational efficiency alongside the
higher ASPs of its new products launching in the AOI segment.
Gearing ratio to fall below 0.03x after IPO. Net gearing was in the range of 0.09-0.19x Gearing ratio to improve to 0.03x after
in 2019-21. After the IPO, the group intends to utilise RM6.0m (or 20.88%) of its IPO to repayment of term loans
partially repay its term loans which were mainly drawn down to finance factory expansion
and to redeem an outstanding term loan from a financial institution. Upon reducing the
group’s total borrowing of RM8.77m as at 30 Jun 22 by the proposed repayment in the
prospectus, the group expects to achieve annual interest savings of about RM0.28m. The
low net gearing provides leverage headroom for TTV to further raise funds through debt
for future expansion and growth.

FIGURE 21: REVENUE MIX ASSUMPTIONS

(RMm) 2019 2020 2021 2022F 2023F
Manufacturing of Machine Vision Equipment 17.8 22.3 43.5 48.7 60.9
Other Related Products and Services 2.9 2.6 3.8 5.1 6.4
Total Revenue 20.7 24.9 47.3 53.8 67.2
Source: TTV, UOB Kay Hian

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R e t a i l M a r k e t M o n i t o r Tuesday, 17 January 2023

BUSINESS BACKGROUND
In 2001, the group was co-founded by Executive Directors Goon Koon Yin, Wong Yih
Hsow and Jennie Tan Yen-Li with the incorporation of TTV in the same year. They
commenced business operations in 2002 as a manufacturer of vision inspection modules
serving mostly semiconductor manufacturers based in Penang. Subsequently, they
incorporated TT Innovation in 2006 to originally focus mainly on R&D-related activities on
new products. In 2010, TTV secured a venture capital investment from MTDC totalling
RM8.75m through the issuance of 8,750,000 RCCPS which were later converted into
197,039 new ordinary shares in TTV in 2018. The holding company, TTV, was
incorporated in 2018 as the listing vehicle to undertake their listing on the LEAP Market
where it acquired 100.0% equity interests in both TTV and TT Innovation pursuant thereto.
The listing on the LEAP Market was completed in May 19 and they raised total gross
proceeds of RM7.20m through the issuance of 40,000,000 new shares of RM0.18 each to
investors who fall within Part I of Schedule 7 of the CMSA. The entire RM7.20m gross
proceeds have been fully utilised within 12 months from their listing on the LEAP Market
where RM5.00m, RM1.00m and RM1.20m have been allocated to part finance the
expansion cost of their existing manufacturing facility, for working capital requirements and
to defray listing-related expenses respectively.
In order to facilitate the listing, they voluntarily implemented a delisting exercise in May 22
which involved the withdrawal of the entire issued share capital of TTV from the Official
List of the LEAP Market.
The group’s sole principal place of business is at Plot 106, Hilir Sungai Keluang 5, Bayan
Lepas Industrial Zone, Phase IV, 11900 Bayan Lepas, Penang. It is a double-storey
detached factory used as the group’s main office building and principal manufacturing
facility with land/built-up area of 89,394/53,000sf. The production capacity and output is
shown below:

FIGURE 22: PRODUCTION CAPACITY AND OUTPUT

Annual Capacity Output Utilisation Rates (%)
P1 213 163 77
P2 163 68 42
P3 52 0 0
Total 428 231 54
* P3 is an extension to the production areas that was completed in 2019 and as at the 30 Nov 22, the space was not utilised during FYE 2021.
Source: TTV

FIGURE 23: REVENUE BY BUSINESS ACTIVITY AND PRODUCT

Source: TTV

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FIGURE 24: REVENUE BY GEOGRAPHICAL LOCATION

Source: TTV

FIGURE 25: COST BREAKDOWN

Source: TTV

FIGURE 26: BREAKDOWN OF DISTRIBUTION CHANNEL

Source: TTV

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R e t a i l M a r k e t
BOARD OF DIRECTORS AND KEY PERSONNEL
FIGURE 27: DIRECTORS AND MANAGEMENT PROFILE
Key Personnel
Dato’ Seri Wong Siew Hai
Independent Non-Executive
Chairman
Nadiah Wong Binti Abdullah
Independent Non-Executive Director
Dr Khoh Soo Beng
Independent Non-Executive Director
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M o n i t o r Tuesday, 17 January 2023
Experience and Background
Dato’ Seri Wong Siew Hai, a Malaysian aged 71. He was appointed to the Board on 1 Jun 22.
He graduated in 1974 with a Bachelor of Science in Mechanical Engineering from University of Leeds, UK. He obtained a Master of
Science in Management Science in 1975 from Imperial College of Science and Technology, University of London, UK. In 2015, he
was awarded the ASEAN Outstanding Engineering Achievement Award by the ASEAN Federation of Engineering Organisations.
He started his career in 1976 with Intel Technology (Intel) as Quality Assurance Engineer and left his last position as General
Manager in 1996. During his time with Intel, he was responsible for, among others, quality assurance for assembly operations of
semiconductors and Intel’s 8-bit micro-controller business unit. Thereafter, he joined Dell Incorporated’s Asia Pacific Customer Centre
as Managing Director and Vice President where he was mainly involved in the management of their operations. In 1998, he re-joined
Intel as Managing Director of Assembly Test Manufacturing in Malaysia and was later promoted to Vice President of Technology and
Manufacturing Group and General Manager of Assembly Test Manufacturing, where he was responsible for all of Intel’s assembly test
factories worldwide. He retired from Intel in 2004.
He was a Director of Invest-In-Penang, an agency incorporated by the Penang State Government to promote investment in Penang
from 2004 to 2008. From 2005 to 2017, he was a board member of Malaysia External Trade Development Corporation (MATRADE),
a division under MITI, and was Chairman of the Audit Committee of MATRADE’s board in 2011-17. He was Chairman of the
Malaysian American Electronics Industry, an industry committee under the American Malaysian Chamber of Commerce, in 2005-21.
Currently, he has been President of the Malaysia Semiconductor Industry Association since 2021 and Chairman of Electrical and
Electronics Productivity Nexus since 2017. He has over 30 years’ experience in the E&E industry in Malaysia and the Asia Pacific
region.
Nadiah Wong Binti Abdullah, a Malaysian aged 52. She was appointed to the Board on 17 Oct 18. She is Chairwoman of the
Nomination Committee and member of the Audit and Risk Management Committee and Remuneration Committee.
She obtained a Bachelor of Laws (Hons) from the University of London in 1992 and a Certificate of Legal Practice in 1993. She was
admitted as an Advocate and Solicitor of the High Court of Malaya in 1994. She practised as Legal Assistant at Messrs Azalina Chan
& Chia in 1994. In 1998, she left to join Messrs Murad & Foo as Legal Assistant and left as Partner in 2021 to join Aspen (Group)
Holdings.
During her tenure with Messrs Murad & Foo, she handled acquisitions of and investments in companies, businesses and properties,
and JVs including financing and security-related documentations. She also provided various advisory and legal solutions including
drawing up legal frameworks and corporate structures, regulatory compliance, legal risk mitigation as well as strategies and litigation
management to companies ranging from start-ups to JVs and corporations. She has over 25 years of experience in legal practice.
She is currently Divisional Director of Corporate for Aspen (Group) Holdings where she is responsible for providing legal and
compliance advisory to the group. She also oversees the corporate affairs, corporate administration and matters related to corporate
communication of the group.
Dr Khoh Soo Beng, a Malaysian aged 54. He was appointed to the Board on 1 Jun 22. He is Chairman of the Remuneration
Committee and member of the Audit and Risk Management Committee and Nomination Committee.
He graduated in 1992 with a Diploma in Technology (Electronic Engineering) from Tunku Abdul Rahman College and completed the
UK Engineering Council Part II examination in 1994. He obtained his Master of Science in Information Technology for Manufacture in
1993 and Degree of Doctor of Philosophy (PhD) in Engineering in 1996, both from University of Warwick, UK. He has been a member
of the Institution of Engineering and Technology (IET) UK since 2002, a graduate member of Board of Engineers Malaysia (BEM)
since 2010, a member of the Institution of Engineers Malaysia (IEM) since 2012 as well as a senior member of the Institute of
Electrical and Electronics Engineers (SMIEEE) USA since 1994.
He started his career with Sony Electronics (M) as Assistant Engineer in 1992 and left in 1992 for further studies. Between 1997 and
2014, he worked in the Penang Design Centre of Motorola Solutions Malaysia where he progressed through the ranks of Senior
Engineer, Staff, Principal Staff, Consultant Black-Belt, Inventor Mentor and Innovation Champion at their R&D department. In 2014,
he joined Collaborative Research in Engineering Science and Technology Centre as Vice President and Research and Program
Director where he was in charge of driving IoT-enabled innovation programmes in digital health and intelligent transport cluster
development before he left in 2018. He then set up PMO Innovations, which is involved in providing training, coaching and
consultancy in programme management, innovation management and organisation development. He has served as a member of the
board of advisors (2021 to 2022) of International Association of Innovation Professionals (IAOIP), USA and the board of directors
since 2022.
18

R e t a i l M a r k e t
Key Personnel
Everlyn Lee Suan Sim
Independent Non-Executive Director
Mohammad Farish Nizar Bin
Othman
Independent Non-Executive Director
Source: TTV
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M A L A Y S I A
M o n i t o r Tuesday, 17 January 2023
Experience and Background
Everlyn Lee Suan Sim, a Malaysian aged 55. She was appointed to the Board on 1 Jun 22. She is Chairwoman of the Audit and Risk
Management Committee and member of the Remuneration Committee and Nomination Committee.
She has been a member of the Malaysian Institute of Certified Public Accountants since 1999, member of the Malaysian Institute of
Accountants since 2001 and member of the Chartered Tax Institute of Malaysia since 2005. She is currently Director of Germane Tax
and REMS Tax Services where she is actively providing tax consultancy and tax planning services. She has over 30 years of audit
and tax experience covering a wide range of taxation matters.
She started her career in 1987 with Coopers & Lybrand (now known as PriceWaterhouseCoopers) as Audit Trainee and left the firm
in 1999 as Senior Consultant. Prior to her career break from Dec 01 until Jan 04, she joined Hwang-DBS Securities in 1999 as
Finance Assistant Manager and left in 2001. In 2004, she joined Horwath Teoh Yap Tax (now known as Horwath Penang Tax) as
Senior Tax Manager and left in 2006 as Associate Director. She joined Deloitte KassimChan Tax Services (now known as Deloitte
Tax Services) (Deloitte) in 2006 as Tax Director and left in 2019 to set up her own tax consulting firms.
During her tenure with Deloitte, she was responsible for marketing, service delivery for tax-related services of the firm and also in-
house training on tax matters for Deloitte’s clients. She led her teams in providing a broad spectrum of tax advisory and consultancy
services, from corporate tax planning, corporate tax compliance, personal tax to transfer pricing. She has had a wide range of
experience in customs matters, sales and service tax as well as goods & services tax (GST), and has helped many clients with their
GST implementation and resolving issues during the time GST legislation was in place in Malaysia. She is a regular speaker at tax
sseminar organised by Deloitte and oversees the in-house training on tax matters.
Mohammad Farish Nizar Bin Othman, a Malaysian aged 51. He was appointed to the Board on 1 Jun 22 and is MTDC’s corporate
representative.
He graduated in 1995 with a Bachelor of Accounting from International Islamic University Malaysia. He has been a member of the
Malaysian Institute of Accountants since 1999 and a member of the Chartered Institute of Management Accountants since 2016.
He started his career in 1996 with PriceWaterhouseCoopers as Audit Assistant and left in 2000 as Assistant Manager. In 2001, he
joined Konsortium Lord-Saberkat as Finance and Administration Manager and left in 2003. In the same year, he joined KPMG as
Audit Manager and left the firm in 2004 to join MTDC as Senior Manager, Finance before leaving in 2010 as Senior Vice President,
Finance and Corporate Services cum Company Secretary. In 2010, he joined Scomi Engineering as General Manager, Business
Development and Tender Coordination until 2012 before joining Saifudin & Co as Director.
In 2014, he re-joined MTDC as Director, Advisory and Value Added Services cum Company Secretary. He has held various positions
within MTDC prior to being appointed to his current position as Director, Technology Development Division.
19
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R e t a i l M a r k e t M o n i t o r Tuesday, 17 January 2023

FINANCIAL STATEMENTS

PROFIT & LOSS BALANCE SHEET

Year to 31 Dec (RMm) 2020 2021 2022F 2023F Year to 31 Dec (RMm) 2020 2021 2022F 2023F
Net Turnover 24.9 47.3 53.8 67.2 Fixed Assets 1.5 1.1 1.2 1.2
EBITDA 4.7 12.2 16.4 18.1 Other LT Assets 36.1 34.5 32.7 31.2
Depreciation & Amortisation 2.4 1.8 1.8 1.5 Cash/ST Investment 2.7 5.5 39.6 51.1
EBIT 2.3 10.4 14.6 16.6 Other Current Assets 10.2 16.0 17.5 22.5
Net Interest Income/(Expense) 0.1 0.2 0.1 0.1 Total Assets 67.9 81.2 115.1 130.1
Pre-tax Profit 2.2 10.2 14.7 16.7 ST Debt 2.0 2.9 1.9 0.9
Tax (0.7) (1.9) (4.0) (4.2) Other Current Liabilities 5.5 7.6 16.7 37.8
Minorities 0.0 0.0 0.0 0.0 LT Debt 5.1 6.9 3.9 3.9
Net Profit 1.5 8.3 10.7 12.6 Other LT Liabilities 0.4 0.1 0.1 0.1
Net Profit (Adjusted) 1.5 8.3 10.7 15.8 Shareholders' Equity 44.6 53.0 81.7 81.7
Minority Interest 0.0 0.0 0.0 0.0
Total Liabilities & Equity 67.9 81.2 115.1 130.1

CASH FLOW KEY METRICS

Year to 31 Dec (RMm) 2020 2021 2022F 2023F Year to 31 Dec (%) 2020 2021 2022F 2023F
Operating 6.0 2.8 12.8 13.2 Profitability
Pre-tax Profit 2.2 10.2 14.7 16.7 EBITDA Margin 18.9 25.8 30.5 26.9
Tax (0.2) (0.4) (4.0) (4.2) Pre(tax Margin 8.9 21.7 27.3 24.9
Depreciation & Amortisation 2.4 1.8 1.8 1.5 Net Margin 6.1 17.6 19.8 23.4
Associates 1.0 2.0 3.0 4.0 ROA 2.2 10.3 9.3 9.7
Working Capital Changes 0.7 (10.5) (1.0) (2.5) ROE 3.4 15.7 13.0 15.4
Other Operating Cashflows 0.2 1.1 0.0 0.0
Investing (13.0) (0.6) (0.1) (0.1) Growth
Capex (Growth) (1.3) (0.0) (0.1) (0.1) Turnover 20.7 89.6 13.8 25.0
Investments (9.5) 0.0 0.0 0.0 EBITDA (268.0) 159.2 34.4 10.3
Proceeds from Sale of Assets 1.0 2.0 3.0 4.0 Pre(tax Profit (148.5) 363.9 43.2 14.2
Others 0.0 (0.4) 0.0 0.0 Net Profit (135.1) 450.1 27.8 17.9
Financing 4.3 0.5 21.4 (1.6) Net Profit (Adjusted) (135.1) 450.1 27.8 47.9
Dividend Payments 0.0 0.0 0.0 0.0 EPS (135.1) 450.1 27.8 47.9
Issue of Shares 0.0 0.0 28.7 0.0
Proceeds from Borrowings 4.6 2.6 0.0 0.0 Leverage
Loan Repayment (0.2) (2.0) (6.0) 0.0 Debt to Total Capital 12.2 10.8 5.0 3.7
Others/Interest Paid 0.0 0.0 (1.3) (1.6) Debt to Equity 18.6 16.6 7.1 5.9
Net Cash Inflow (Outflow) (2.6) 2.7 34.1 11.5 Net Debt/(Cash) to Equity 12.4 6.2 (41.4) (56.7)
Beginning Cash & Cash Equivalent 5.4 2.7 5.5 39.6 Interest Cover (x) 29.0 64.1 145.7 166.5
Changes Due to Forex Impact (0.0) 0.0 0.0 0.0
Ending Cash & Cash Equivalent 2.7 5.5 39.6 51.1
Source: TTV, UOB Kay Hian

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R e t a i l M a r k e t M o n i t o r Tuesday, 17 January 2023

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R e t a i l M a r k e t M o n i t o r Tuesday, 17 January 2023

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