Financial Highlights

The following table sets out the key financial highlights of our Group for the Financial Years and Period Under Review:

• The revenue grows from RM 20 mil (FYE 2019) to RM 47 mil (FYE 2021). This shows that the company is still growing.
• The gross profit margin grew from 18.54% (FYE 2019) to 41.64%. The GP margin increased due to the high sales of its product. (FYE 2021). (Generally, a GP margin of 20% is considered high/ good).
• PAT margin declined from -20.91% (FYE 2019) to 17.64% (FYE.2021).
• The gearing ratio is 0.17 times (FYE 2021), which is under the healthy range. The company may plan to add some loans to fully leverage and reach the reasonable range of 0.25 ~ 0.5. (A good gearing ratio should be between 0.25 – 0.5).

Major customer and Supplier

Major Customers

The Group’s top 5 major customers for the Financial Years Under Review are as follows:

The company’s top 5 customers contributed 87.26% of total revenue. And the top 2 customers contributed 69.32% of total Revenue. This shows that the company is too dependent on certain customers and will be involved in high-concentration customer risk. Either one of the top 2 clients plans to terminate the product/service from the company, which will affect the company's financial result.

Major Suppliers

The Group’s top 5 major suppliers for the Financial Years Under Review are as follows:

According to the details, the top 5 suppliers are 44.52%. The company mentioned they are not dependent on any suppliers for purchases of materials or subcontracted services as they can be sourced from other suppliers.

Industry Overview

Between 2019 and 2021, global sales of semiconductor manufacturing equipment grew at a CAGR of 31.1%. Semiconductor manufacturing equipment sales grew by 44.2% from USD 71.2 billion in 2020 to USD 102.6 billion in 2021, where China recorded the highest sales of USD 29.7 billion. The growth in the sales of semiconductor manufacturing equipment was mainly driven by the expansion of production capacity by the semiconductor manufacturers amidst the shortage of semiconductors. The shortage of semiconductors started sometime in the second quarter of 2020 and continued into 2022. This was mainly due to the increase in demand for electronic products caused by the COVID-19 pandemic as well as the increased use of semiconductors in the automotive industry. In the first half (H1) of 2022, the global sales of semiconductor manufacturing equipment grew by 5.5% to USD 51.1 billion compared to USD 48.4 billion in H1 2021.

Imports and exports also provide indicators of the demand for semiconductor manufacturing equipment. The tables below present both the global and domestic trade flows of semiconductor manufacturing equipment:

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 import and export 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 by 62.9% and 69.0% respectively compared to the previous year, mainly due to the expansion in production capacity by the semiconductor manufacturers. The growth in the external trade of semiconductor manufacturing equipment augurs well for operators in this said industry.

The market size and market share of TTVHB Group within the manufacture of specialized machinery and equipment in Malaysia are estimated below

Source: Vital Factor Consulting

Business strategies and plans for TT VISION HOLDINGS BERHAD

Moving forward, the company will continue to strengthen and leverage its core competency in building construction as well as continue the expansion into the design and build projects to support the business growth. The strategies and plans are as set out below

1. The company plans to strengthen its R&D capabilities and focus on product development.
2. Marketing Activities

MQ Trader View

Opportunities

1. The company has good financial results from year to year. According to the financial results, the company's revenue is growing and the GP margin is also growing. This also means that despite the expansion of the company, the management is able to control costs, which is a good sign for the company.
2. The company has R&D capabilities to carry out product innovation and development. The company leveraged its strengths in carrying out continuous product improvement and development as part of its R&D activities.

Risk

1. The company might be involved in high-concentration client risk. As the company is dependent on the top 5 major customers (especially the top 2 customers). And also because the company does not have any long-term contracts with the customer. Therefore, any significant reduction and/or cancellation in the purchase orders from these customers or the loss of any of the major customers, if not replaced in a timely manner, would materially and adversely affect the financial performance.

Click here to refer the IPO -TT Vision Holdings Berhad (Part 1)

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