Financial Data and Key Indicators Changes - In the first three quarters, the company achieved operating income of $611 billion, up 2% year on year, with net profit reaching $271.9 billion, up 0.5% year on year, indicating a recovery trend [3][4] - The annualized ROA and ROE increased to 0.71% and 9.3% respectively, while the cost to income ratio stood at 26.55%, maintaining strong efficiency [3][4] - The NIM decreased by 2 basis points from the first half, but the decline narrowed compared to Q2, providing stable support for revenue growth [3][4] Business Line Data and Key Indicators Changes - Customer loans reached JPY 30.45 trillion, up 77.3% from the end of last year, while bond investments totaled JPY 16.01 trillion, up 16.2% [4] - Fee-based income recorded a growth of 0.6%, supported by strong performance in wealth management and capital markets [12][30] - The domestic subsidiaries' operating income increased by 34.5%, contributing to a more diversified income structure [14] Market Data and Key Indicators Changes - Total assets exceeded JPY 52.81 trillion, up 8.2% from the end of last year, with customer deposits amounting to JPY 37.3 trillion, up 70.1% [4] - The number of corporate clients exceeded 14 million, and individual customers surpassed 17 million, further solidifying the customer base [4] Company Strategy and Development Direction - The company aims to strengthen its development foundation by serving the real economy, safeguarding stability through intelligent risk control, and fostering new momentum through comprehensive transformation [6] - Future strategies include enhancing fee-based income, optimizing asset structure, and increasing bond investments to build resilience in a low-rate environment [11][25] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving sustained and high-quality returns, citing a favorable external environment due to contained trade frictions between China and the U.S. [17] - The company anticipates that NIM will stabilize in the coming years, with a gradual reach towards an inflection point [24] Other Important Information - The NPL ratio stood at 1.33%, down 1 basis point from the end of 2024, with a provision coverage ratio of 217.21%, up 2.3 percentage points [5][16] - The company has implemented measures to enhance risk management and control, ensuring asset quality remains stable [15][51] Q&A Session Summary Question: Measures taken for positive growth and future outlook - Management highlighted cost reduction and income increase measures, including stabilizing NII fundamentals and enhancing fee-based income [9][12] Question: Current pricing for corporate and retail loans and NIM trends - The average interest rate on newly issued RMB corporate loans fell to 2.7%, while retail loans averaged 3.01%, with expectations for NIM to remain around 1.26% for the full year [20][21] Question: Drivers of fee-based income and bond investment outlook - Fee-based income growth was driven by wealth management and effective cost control, while bond investments will be managed flexibly to optimize returns [29][34] Question: Corporate loan performance and credit demand - Corporate loans rose significantly, with retail loans also increasing, indicating a solid credit demand despite some short-term softness [40][44] Question: Asset quality outlook and impacts of tariff policies - The NPL ratio for corporate loans was stable, with limited impacts from U.S.-China trade policies, and proactive measures are in place for debt resolution [47][49] Question: Inclusive loans and risk control - The balance of inclusive loans reached JPY 3.5 trillion, with a focus on enhancing risk management and adapting products to meet client needs [55][59] Question: Deposit competition and trends - Domestic RMB deposits reached JPY 38.5 trillion, with a growth rate of 8.5%, while the trend of deposit termization has eased [64][66]

China Oilfield Services (SEHK:02883) Q3 2025 Earnings Call October 30, 2025 04:30 AM ET Speaker0Dear ladies and gentlemen, investors and analysts, good afternoon. Thank you all for joining the twenty twenty five Third Quarter Earnings Call of China Oilfield Services Limited today. COSL, guided by the goal of building a world class energy service company with Chinese characteristics, continuously optimizes resource allocation and enhances the efficiency of capital operation. It focuses on five major developm ...

Financial Data and Key Metrics Changes - The company reported a 9% growth in profit before tax, supported by a 5% increase in income [2][3] - Operating income reached $5.1 billion, up 5% year-on-year, while operating expenses increased by 4% [3][4] - Profit before tax was $2 billion, reflecting a 9% increase, and tangible net asset value per share rose by $0.175 year-on-year [4][5] - The return on tangible equity is now expected to be around 13% in 2025, upgraded from previous guidance [3][11] Business Line Data and Key Metrics Changes - Corporate and Institutional Banking (CIB) income was $3 billion, up 2% year-on-year, driven by a 23% increase in global banking income [8][10] - Wealth and Retail Banking (WRB) income increased by 7% to $2.3 billion, with wealth solutions income up 27% [10][11] - The affluent business onboarded 67,000 new clients in the quarter, contributing to a total net new money of $42 billion year-to-date [11] Market Data and Key Metrics Changes - Underlying loans and advances to customers increased by 1% or $2 billion quarter-on-quarter, with a 4% growth year-to-date [6][7] - Underlying customer deposits rose by 2% or $11 billion quarter-on-quarter, primarily from WRB [7] Company Strategy and Development Direction - The company is focusing on servicing clients' cross-border and affluent banking needs, with a strategic emphasis on wealth management [3][11] - The company plans to present updated 2026 return on tangible equity guidance at the full-year results in February [12] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the future, highlighting strong performance in wealth management and the potential for continued growth [11][25] - The company is preparing for significant trends such as the digitization of money and the incorporation of AI into business models [26][27] Other Important Information - The company achieved $566 million in run-rate savings from the Fit for Growth program, with total expense guidance for 2026 remaining below $12.3 billion [5][50] - Credit impairment for the quarter was $195 million, with an annualized loan loss rate of 24 basis points [5][6] Q&A Session Summary Question: Discussion on wealth business margin pickup - Management noted that net new money is migrating into wealth products, and the return on assets has improved due to a conversion from assets under custody to assets under management [15][20] Question: Long-term outlook for wealth management in China - Management discussed the importance of AI and digitization in future growth, emphasizing the bank's strong position in China [25][26] Question: Clarification on net interest income expectations - Management indicated optimism for Q4 net interest income, citing better-than-expected performance and effective management of pass-through rates [34][39] Question: Insights on credit impairment and high-risk assets - Management reassured that there are no significant signs of stress in sovereign credit, despite some fluctuations in high-risk assets [56][60] Question: Future profitability in ventures - Management expects digital banks to turn profitable by 2026, with ongoing improvements in operating performance [75][78]

Financial Data and Key Metrics Changes - The company reported a 9% growth in profit before tax, supported by a 5% increase in operating income, reaching $5.1 billion [1][2] - Operating expenses increased by 4%, while credit impairment stood at $195 million, leading to a profit before tax of $2 billion [2][4] - The tangible net asset value per share rose by $0.175 year on year, and the return on tangible equity is now expected to be around 13% in 2025, a year earlier than previously guided [2][10] Business Line Data and Key Metrics Changes - Corporate and Institutional Banking (CIB) income was $3 billion, up 2% year on year, driven by a 23% increase in global banking income [7][9] - Wealth and Private Banking (WRB) income increased by 7% to $2.3 billion, with a record performance in wealth solutions, which saw a 27% rise [9][10] - Underlying loans and advances to customers grew by 1% or $2 billion quarter on quarter, primarily from wealth lending and mortgages [5][6] Market Data and Key Metrics Changes - Underlying customer deposits increased by 2% or $11 billion quarter on quarter, largely driven by WRB [6] - Risk-weighted assets decreased by $1 billion in the quarter, with a CET1 ratio of 14.2%, up 32 basis points quarter on quarter [6][7] Company Strategy and Development Direction - The company is focusing on servicing clients' cross-border and affluent banking needs, with a strategic emphasis on wealth management and digitalization [2][10] - The company plans to continue investing in its differentiated areas of strength to drive income growth and improve returns [10][11] - The management highlighted the importance of adapting to a multipolar world and the digitization of money as key trends for future growth [26][27] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the operating environment, noting strong performance across various business lines and a positive start to Q4 [10][11] - The company is tracking towards the upper end of its income growth guidance for 2025, with expectations of continued strong performance in wealth solutions [10][11] - Management acknowledged the potential challenges posed by interest rate fluctuations but remains focused on managing net interest income effectively [34][39] Other Important Information - The company achieved $566 million in run-rate savings from its Fit for Growth program and has taken $454 million in restructuring charges since its inception [4][5] - The company is committed to maintaining a cost cap of below $12.3 billion on a constant currency basis for 2026 [4][48] Q&A Session Summary Question: Discussion on wealth business margin pickup - Management noted that net new money is migrating into wealth products, and the return on assets has improved due to a conversion from assets under custody to assets under management [13][15][18] Question: Future trends in wealth management - Management discussed the importance of AI and digitization in shaping the future of wealth management, emphasizing the bank's preparedness for these changes [25][26][27] Question: Clarification on net interest income expectations - Management expressed optimism for Q4 net interest income, highlighting better-than-expected performance and effective management of pass-through rates [34][37][38] Question: Insights on Fit for Growth program - Management confirmed that the bulk of cost savings from the Fit for Growth program will be realized in 2026, with a commitment to the cost cap remaining unchanged [48][49] Question: CASA ratio stability - Management explained that the CASA ratio remains stable due to affluent customers moving funds into investment products, which is a positive trend [51][53] Question: Credit impairment and sovereign risks - Management reassured that there are no significant signs of stress in sovereign credit, despite some fluctuations in sovereign ratings [55][56]

Financial Data and Key Metrics Changes - In the first nine months of 2025, total volumes decreased by 7%, revenue decreased by 6.6%, while revenue per hectoliter increased by 0.4% [6] - Normalized EBITDA decreased by 7.7%, and the normalized EBITDA margin contracted by 37 basis points [6] - In the third quarter, total volumes and revenue decreased by 8.6% and 8.4%, respectively, with normalized EBITDA decreasing by 6.9% but the normalized EBITDA margin expanding by 46 basis points [6][10] Business Line Data and Key Metrics Changes - In APAC West, volumes and revenue decreased by 7.9% and 8.7%, respectively, while normalized EBITDA decreased by 9.7% [7] - In China, volumes in the third quarter decreased by 11.4%, and revenue decreased by 15.1%, with a normalized EBITDA decrease of 17.4% [7] - In APAC East, volumes decreased by 0.5%, while revenue and revenue per hectoliter increased by 1.8% and 2.3%, respectively [11] Market Data and Key Metrics Changes - In India, the company delivered double-digit revenue growth in the third quarter, with the Budweiser brand growing ahead of the industry [10] - In South Korea, volumes were flattish, with revenue and revenue per hectoliter growing by mid-single digits [11] - The contribution of the in-home channel to total volumes and revenue has continued to increase, with premium and super premium segments outpacing traditional channels [35] Company Strategy and Development Direction - The company is focused on improving top-line performance by enhancing route-to-market strategies, increasing investments in mega brands, and leading innovation in packaging and product offerings [8][10] - There is a clear priority to reignite growth and rebuild market share momentum, particularly in China [4][5] - The company aims to expand its footprint through targeted geographic expansion and restore excellence in execution [8] Management's Comments on Operating Environment and Future Outlook - Management acknowledged challenges in China due to a soft economic cycle but emphasized opportunities for improvement in inventory management and resource allocation [4][29] - The company remains optimistic about growth in India and South Korea, with a focus on premiumization and innovation to capture market share [10][12] - Management highlighted the importance of maintaining investments in both on-trade and off-trade channels to support brand building and consumer engagement [46][68] Other Important Information - The company is actively managing inventory levels, with current inventories lower than the previous year, and is focused on optimizing its route-to-market [29] - The company is committed to upholding compliance standards amid ongoing customs disputes in South Korea and Taiwan [72][74] Q&A Session Summary Question: Brand performance in China and mega brands' trends - Management discussed the impact of in-home consumption trends and innovations in product offerings, particularly for Budweiser and Corona [16][17] Question: Demand trends in South Korea - Management noted that while the industry remains soft, there are pockets of growth in non-alcoholic and flavored beers, with a strong performance from the core portfolio [21][24] Question: Outlook for the China market - Management confirmed proactive inventory management and expressed cautious optimism for a rebound in selling performance [28][30] Question: In-home channel penetration and expansion plans - Management indicated that the in-home channel currently accounts for about 60% of the industry, with plans to increase penetration closer to industry averages [31][32] Question: Strategies for low alcohol beer market - Management highlighted ongoing innovations in non-alcoholic and low-alcohol products, particularly in South Korea, where consumer interest is growing [52][55] Question: Update on Korean customs tax dispute and Taiwan anti-dumping duties - Management provided updates on ongoing customs disputes and adjustments in tariff rates in Taiwan, emphasizing the importance of market access [72][74]

Financial Data and Key Metrics Changes - In the first nine months of 2025, total volumes decreased by 7%, revenue decreased by 6.6%, while revenue per hectoliter increased by 0.4% [7] - Normalized EBITDA decreased by 7.7%, and the normalized EBITDA margin contracted by 37 basis points [7] - In the third quarter, total volumes and revenue decreased by 8.6% and 8.4%, respectively, with normalized EBITDA decreasing by 6.9% but the normalized EBITDA margin expanding by 46 basis points [7] Business Line Data and Key Metrics Changes - In APAC West, volumes and revenue decreased by 7.9% and 8.7%, respectively, with normalized EBITDA decreasing by 9.7% [8] - In China, volumes in the third quarter decreased by 11.4%, revenue decreased by 15.1%, and revenue per hectoliter decreased by 4.1% [8] - In APAC East, volumes decreased by 0.5%, while revenue and revenue per hectoliter increased by 1.8% and 2.3%, respectively [12] Market Data and Key Metrics Changes - In India, the company delivered double-digit revenue growth in the third quarter, translating into strong EBITDA performance [11] - In South Korea, volumes were flattish, with revenue and revenue per hectoliter both growing by mid-single digits [12] Company Strategy and Development Direction - The company is focused on improving top-line performance by enhancing route-to-market strategies, increasing investment in mega brands, and leading innovation within the industry [9] - The strategy includes expanding the in-home channel and premiumizing the product offerings to capture growth opportunities [9][10] - The company aims to restore excellence in execution and improve market share momentum [4][5] Management's Comments on Operating Environment and Future Outlook - Management acknowledged challenges in China due to a soft economic cycle but emphasized a clear view of improvement opportunities [4] - The company remains committed to operational excellence and is optimistic about long-term growth despite current market conditions [5][11] Other Important Information - The company continues to leverage technology to enhance commercial capabilities and optimize route-to-market strategies [11] - The performance in South Korea and India has been solid, with ongoing investments in marketing and product innovation [11][12] Q&A Session Summary Question: Insights on brand performance in China - Management highlighted the importance of aligning brand performance with channel strategies, particularly focusing on in-home consumption and innovations [18][20] Question: Demand trends in Korea - Management noted that while the overall industry remains soft, there are pockets of growth in non-alcoholic and flavored beers, and the company is well-positioned to capture these opportunities [25][27] Question: Outlook for the China market - Management confirmed proactive inventory management and a focus on maintaining healthy route-to-market strategies, with expectations for gradual improvements [30][31] Question: In-home channel penetration - Management indicated that the in-home channel currently accounts for over 50% of their mix, with plans to increase this closer to the industry average [32][34] Question: Branding strategy for Harbin - Management expressed confidence in the Harbin brand's ability to compete nationally, particularly in Guangdong, and emphasized the need for a diverse portfolio to meet local consumer needs [39][42] Question: Commercial investment allocation - Management stated that investments are being sustained in both on-trade and off-trade channels, with a shift towards in-home channels as consumer preferences evolve [66][68] Question: Updates on Korean customs tax dispute - Management confirmed that the dispute is ongoing, with non-underlying charges recorded, but emphasized that the potential penalty exposure is not expected to be material [72][74]

Financial Data and Key Metrics Changes - In the first nine months of 2025, total volumes decreased by 7%, revenue decreased by 6.6%, while revenue per hectoliter increased by 0.4% [8] - Normalized EBITDA decreased by 7.7%, and the normalized EBITDA margin contracted by 37 basis points [8] - In Q3 2025, total volumes and revenue decreased by 8.6% and 8.4%, respectively, with normalized EBITDA decreasing by 6.9% but the normalized EBITDA margin expanding by 46 basis points [8][9] Business Line Data and Key Metrics Changes - In APAC West, volumes and revenue decreased by 7.9% and 8.7%, respectively, with normalized EBITDA decreasing by 9.7% [10] - In China, volumes in Q3 decreased by 11.4%, revenue decreased by 15.1%, and revenue per hectoliter decreased by 4.1% [10] - In APAC East, volumes decreased by 0.5%, while revenue and revenue per hectoliter increased by 1.8% and 2.3%, respectively [14] Market Data and Key Metrics Changes - In India, the company delivered double-digit revenue growth in Q3, with the Budweiser brand growing ahead of the industry [13] - In South Korea, volumes were flattish, with revenue and revenue per hectoliter growing by mid-single digits [14] - The contribution of the in-home channel to total volume and revenue has continued to increase, with premium and super premium segments outpacing contributions from Chinese restaurants [42] Company Strategy and Development Direction - The company is focused on improving top-line performance through strengthening route-to-market, increasing investment in mega brands, leading innovation, and expanding geographic footprint [11] - The strategy includes enhancing the in-home channel and premiumizing the product offerings to capture growth opportunities [11][12] - The company is committed to leveraging technology to enhance commercial capabilities and optimize route-to-market [13] Management's Comments on Operating Environment and Future Outlook - Management acknowledged challenges in China due to a soft economic cycle but emphasized a clear view of improvement opportunities [6] - The company remains optimistic about growth in India and South Korea, with a focus on premiumization and innovation [13][30] - Management highlighted the importance of maintaining investments in both on-trade and off-trade channels despite current pressures [56] Other Important Information - The company is actively managing inventory levels, with current inventories lower than the previous year [35] - There are ongoing customs tax disputes in South Korea, with non-underlying charges related to these claims amounting to $84 million [82] - In Taiwan, a provisional tariff was slightly adjusted down to 31.3% [84] Q&A Session Summary Question: Can you provide more details on brand performance in China, particularly for mega brands? - Management discussed the impact of the in-home channel and innovations like larger packaging formats to improve brand performance [21][22] Question: What is the outlook for the South Korean market given the weak industry demand? - Management noted that while the industry remains soft, there are pockets of growth in non-alcoholic and flavored beers, and the company continues to gain market share [30][31] Question: What is the current penetration level of the in-home channel in China? - Management indicated that the in-home channel accounts for about 60% of the industry but only over 50% of the company's channel mix, highlighting significant growth opportunities [38] Question: How does the company allocate resources between on-trade and off-trade channels? - Management stated that while investments in on-trade channels are maintained for brand building, a larger proportion of spending is directed towards in-home channels [77] Question: What are the strategies for low alcohol beer products? - Management emphasized ongoing innovation in non-alcoholic and low-alcohol beers, with a focus on consumer needs and market maturity [64][66] Question: Can you provide updates on the Korean customs tax dispute and Taiwan's anti-dumping duties? - Management confirmed the ongoing customs tax dispute and the slight adjustment in Taiwan's tariff rate, emphasizing the importance of maintaining market access [82][84]

Financial Data and Key Metrics Changes - The company reported revenue of $468.0 million, an increase of 7.6% quarter-on-quarter and 9.5% year-on-year, primarily driven by growth in SMT [9][10] - Adjusted gross margin for the quarter was 37.7%, lower than typical levels due to a larger contribution from SMT and lower SEMI gross margin [10][11] - Adjusted operating profit was $124.4 million HKD, down 26.6% quarter-on-quarter and 30.3% year-on-year [11] - Adjusted net profit was $101.9 million HKD, down 24.4% quarter-on-quarter but up 245.2% year-on-year [11] Business Line Data and Key Metrics Changes - SEMI segment revenue was $240.5 million, down 6.5% quarter-on-quarter but up 5.0% year-on-year, with bookings of $207.8 million, down 1.7% quarter-on-quarter and 12.4% year-on-year [13][14] - SMT segment revenue was $227.5 million, up 28% quarter-on-quarter and 14.6% year-on-year, with bookings of $254.7 million, down 5% quarter-on-quarter but up 51.8% year-on-year [15][16] Market Data and Key Metrics Changes - The company noted strong demand in China driven by EVs and high factory utilization across all sectors [3] - The company expects Q4 2025 revenue to be between $470 million and $530 million, indicating growth supported by momentum in both SEMI and SMT [17] Company Strategy and Development Direction - The company aims to maintain its leadership in advanced packaging, particularly in TCB for HBM4 and advanced logic, driven by AI infrastructure demand [3][17] - The strategic restructuring, including the liquidation of the Sun Churn AEC plan, is expected to improve cost competitiveness and agility in global manufacturing operations [8] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the outlook for TCB demand and noted that the AI ecosystem investments will drive future growth [17] - The company acknowledged uncertainties in the operating environment but emphasized its global presence to navigate potential impacts [17] Other Important Information - The company achieved a book-to-bill ratio of 1.04 for the quarter, maintaining a ratio above one since Q1 2025 [10] - The company experienced an isolated bookings cancellation in Q3 for panel deposition tools, which was a one-off occurrence [9][10] Q&A Session Summary Question: HBM4 transition and market share - Management confirmed they are leading the transition to HBM4 and have secured orders from two major HBM players, indicating a strong market position [20][23] Question: Impact of technology roadmaps on demand - Management noted that demand for TCB is driven by the timing of key customers' technology roadmaps, with expectations for growth in Q4 [25][26] Question: OpEx and future estimates - Management indicated that OpEx will remain similar to prior years with some marginal increases due to ongoing R&D investments [36][37] Question: TCB fluxless application timeline - Management expects significant ramp-up for fluxless TCB applications in 2026, with ongoing progress in logic applications [38][40] Question: Customer concentration for TCB equipment - Management confirmed a broadening of TCB customer base beyond leading foundries to include top AI customers [64] Question: Gross margin outlook for SEMI solutions - Management expects slight margin accretion for SEMI's margin in Q4, with long-term expectations for recovery to mid-40% levels [59][60]

Financial Data and Key Metrics Changes - The company reported revenue of $468.0 million for Q3 2025, an increase of 7.6% quarter-on-quarter and 9.5% year-on-year, primarily driven by growth in SMT [9][10] - Adjusted gross margin for Q3 was 37.7%, lower than typical levels due to a larger contribution from SMT and lower SEMI gross margin [10][11] - Adjusted net profit was HKD 101.9 million, down 24.4% quarter-on-quarter but up 245.2% year-on-year [11] - The group achieved a book-to-bill ratio of 1.04 for the quarter, maintaining a ratio above one since Q1 2025 [10] Business Line Data and Key Metrics Changes - SEMI segment revenue was $240.5 million, down 6.5% quarter-on-quarter but up 5.0% year-on-year, driven by demand for wire bonders and die bonders [13] - SMT segment revenue was $227.5 million, up 28% quarter-on-quarter and 14.6% year-on-year, supported by AI servers and EV demand in China [15] - SEMI's adjusted gross margin was 41.3%, lower than normal due to a higher contribution from wire bonders and lower TCB revenue [14] Market Data and Key Metrics Changes - The company noted strong demand in China driven by EVs and high factory utilization across all sectors [3] - The group expects Q4 2025 revenue to be between $470 million and $530 million, indicating growth supported by momentum in both SEMI and SMT [17] Company Strategy and Development Direction - The company aims to solidify its leadership in TCB technology, particularly in HBM4, and anticipates a total addressable market exceeding $1 billion by 2027 [17] - The strategic restructuring, including the voluntary liquidation of the Sun Churn AEC plan, is expected to enhance cost competitiveness and operational agility [8] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the outlook for TCB demand, citing a strong AI tailwind and ongoing investments in AI infrastructure [31] - The company acknowledged uncertainties in the automotive and industrial markets but noted a stable demand from China [17] Other Important Information - The company experienced an isolated booking cancellation in Q3 for panel deposition tools, which was a one-off occurrence [9][10] - The group closed the quarter with a backlog of $867.7 million [10] Q&A Session Summary Question: HBM4 Transition and Market Share - Management confirmed they are a primary supplier for the HBM4 market, having secured orders from two major HBM players [20][23] Question: Advanced Packaging Demand Pause - Management indicated that the pause in demand was due to the timing of key customers' technology roadmaps, with confidence in future orders aligning with new architecture launches [25][26] Question: Operating Expenses and Future Projections - Management stated that operating expenses would remain similar to prior years, with ongoing investments in R&D and infrastructure [36][37] Question: TCB Fluxless Application Timeline - Management expects significant ramp-up for fluxless TCB applications in 2026, as the industry moves towards higher stacking [38][40] Question: Customer Concentration and Future Opportunities - Management noted a broadening of TCB customer base beyond leading foundries, engaging with top AI customers globally [64] Question: Gross Margin Outlook for SEMI Solutions - Management anticipates slight margin accretion for SEMI in Q4, with expectations for gross margins to return to mid-40% levels in the long run [59][60]

Financial Data and Key Metrics Changes - The company reported revenue of $468.0 million USD for Q3 2025, an increase of 7.6% quarter-on-quarter and 9.5% year-on-year, primarily driven by growth in SMT [9][10] - Adjusted gross margin for Q3 was 37.7%, lower than typical levels due to a larger contribution from SMT and lower SEMI gross margin [10][11] - Adjusted net profit was $101.9 million HKD, down 24.4% quarter-on-quarter but up 245.2% year-on-year [11] Business Line Data and Key Metrics Changes - SEMI segment revenue was $240.5 million USD, down 6.5% quarter-on-quarter but up 5.0% year-on-year, driven by stronger demand for wire bonders and die bonders [12] - SMT segment revenue was $227.5 million USD, up 28% quarter-on-quarter and 14.6% year-on-year, supported by AI servers and EV demand in China [14][15] - SEMI's adjusted gross margin was 41.3%, lower than normal due to a higher contribution from wire bonders and lower TCB revenue [13] Market Data and Key Metrics Changes - The company noted strong demand in China driven by EVs and high factory utilization across all sectors [3] - The group closed the quarter with a backlog of $867.7 million USD, indicating strong future demand [10] Company Strategy and Development Direction - The company aims to maintain its leadership in TCB technology and expects the total addressable market for TCB to exceed $1 billion by 2027, driven by AI infrastructure investments [17] - The strategic restructuring, including the liquidation of the Sun Churn AEC plan, is expected to enhance cost competitiveness and operational agility [8] Management Comments on Operating Environment and Future Outlook - Management expressed confidence in the outlook for TCB demand and noted that the timing of key customers' technology roadmaps will influence order volumes [25][30] - The company acknowledged uncertainties in the automotive and industrial markets but remains optimistic about mainstream demand, particularly from China [17][49] Other Important Information - The company experienced an isolated booking cancellation in Q3 for panel deposition tools, which was a one-off occurrence [9][10] - The group achieved a book-to-bill ratio of 1.04 for the quarter, maintaining a ratio above one since Q1 2025 [10] Q&A Session Summary Question: HBM4 Transition and Market Share - Management confirmed they are leading the transition to HBM4 and have secured orders from two major HBM players, indicating a strong market position [22][23] Question: Pause in Advanced Packaging and TCB - Management clarified that the observed pause in AP and TCB was driven by the timing of key customers' technology roadmaps, with expectations for growth in Q4 [24][25] Question: OpEx and AEC Liquidation Impact - Management indicated that the liquidation of AEC will primarily benefit COGS rather than OpEx, and OpEx is expected to remain similar to prior years due to ongoing R&D investments [35][36] Question: TCB Fluxless Application Timeline - Management anticipates a significant ramp-up in fluxless TCB applications for logic in 2026, with ongoing progress in the technology [37][39] Question: Customer Concentration and Future Opportunities - Management noted that TCB customer concentration has broadened beyond the top three memory makers, engaging with various AI customers globally [64][65] Question: Margin Outlook for SMT Solutions - Management explained that current SMT margins are influenced by market composition, with expectations for sustained low 30% margins unless market conditions change [69] Question: Total Addressable Market for TCB - Management projected that the total addressable market for TCB will be larger for HBM than for logic over time, with aspirations for a 35% to 40% market share [70][72]