Screen Holdings Co U/Adr

Hello everyone, it's time to start the earnings call for the financial year that ended in March 2024 of Screen Holdings. Thank you very much for taking the time to attend today. My name is Chiho Otobie and I'm an Executive Officer and Head of the Corporate Communications Department. Thank you very much again for being here today. The documents for presentation today will be announced on the website at half past three or have already been posted. And we will also post a recording of today's earnings call later on. Please use it for your convenience. This earnings call is also being interpreted into English. So we have an English conference room set up on Teams. We would use English interpretation to have people from other countries and other languages follow the conference. There are three things in terms of housekeeping that I'd like to mention ahead of the conference. First of all, your cameras and microphones are muted by the organiser on Teams. And when it comes to doing Q&A, we will enable your microphone so that you can switch it on. This is just a measure of precaution to ensure a smooth progression of the conference. Please also refrain from mentioning specific customers or specific products of competitors or names of competitors. And please understand that we can't make comments on the situation of specific other companies. We will have time for questions and answers at the end of the presentation, and we will mention details on that later. So let me briefly introduce the participants on the side of screen holdings. First of all, Mr Toshio Hiroi, the representative director, president and CEO of Screen Holdings. Thank you very much for taking the time today. Mr. Yoichi Kondo, Representative Director and CFO. Hello, my name is Kondo. Thank you very much for being here today. Mr. Akihiko Miyagawa, Senior Executive Officer and Head of the Financial Strategy Division. Hello, everyone. Thank you very much for attending. So we will start this by a presentation from Mr. Kondo about the financials of the year that just ended. Mr. Kondo, you have the floor. Thank you very much. I'd like to give you the details of our business results and the forecast for the year that ended in March 2024. We've increased our revenue, operating income, operating profit margin, ordinary income and net income and we've also exceeded the forecast that were presented in January. We were paying out another ¥140 of dividend at the end of the term, which is ¥448 before split. We've reached record highs for sales and profits, also for OP Income and OP Margin, for SP, For GA, both sales and profits increased year-on-year, and we achieved a record high OP margin. For FT, sales decreased year-on-year, managed to reduce loss. And for PE, both sales and profits decreased year-on-year. Net sales for the full year were 504.9 billion, operating income 94.1 billion, operating margin 18.6%, ordinary income 94.2%, and net income 70.5%. Net sales up 9.6% or 44 billion, the OP income up 17.7 billion, ordinary income up 60.8 billion and net income up 13 billion. Sales revenue, operating income and operating margin are shown here. And these are the results of value up 2023. So we've improved the profitability, we've improved revenue as well. Next page, please. This is the revenue proportion by region. 82.4% overseas, Japan 17%, China 12%, and so on. So we see that China has reached a very high level. Next page, please. This is the composition of the group sales by segment. SP has reached a very high level at 82.7%. These are the results for the fourth quarter. SP, 129.6 billion. Operator income, 32.5 billion and operating margin, 25.1%. GA net sales, 11.7 billion. OPE income, 7 billion and OP margins 6.7 billion. FT, net sales 10.7 billion, 0.2, operating income and OP margins 2.2%. And PA, net sales 4.1 billion. On the right-hand side, you find the numbers for the full year. SPE, 417.6 billion. GA, net sales of 47.7 billion. FT, net sales of 23.2 billion. and negative 0.4 billion operating income for FT, OP margin minus 1.8% for FT. PE net sales of 14.6 billion, OP margin of 1.8 billion, OP income 1.8 and 12.7% margin. This is the year-on-year comparison by segment. For SP, Q and Q, both sales to profit increased, sales to foundries increased as well as those to China and North America. And this exceeded our expectations in terms of profitability because we drove down fixed cost. And some of the evaluation equipment was moved into this period. So operating income was higher than expected. Year-on-year is also an increase for sales and profits. Sales to foundries increased while sales to memory applications declined. It is similar to the Q&Q situation. For GA, both sales and profits decreased. The recurring business, however, remained solid. In terms of year-on-year, both sales and profits increased. POD and other equipment sales, as well as recurring business, remained solid. And we also had some help from FX. For FT, both sales and profits increased. And we are profitable for the first time on a quarterly basis since two years. We've returned to profitability on a quarterly basis. sales decreased year-on-year and managed to reduce loss for business restructuring. For PE, both sales and profits increased and OP margin improved to the 10% range. In terms of year-on-year, both sales and profits decreased and due to the sluggish investment in packaged substrates. This is the financial standard for our balance sheet. The total assets are 676.8 billion. And the cash is still quite abundant. Some of it is included in other current assets. But the figures I've seen. This is the cost of the cash flow. Minus 31.0 operating cash flow. For the fourth quarter, we've decreased the payment cycle, 60 days cash. And so this is just a temporary decrease of financial cash flow. And it's going to improve going forward. Financial cash flows and others are seen. This is the analysis of operating income growth. From the 76.4 billion in FY23 March, plus 18 billion for sales and capacity utilization, plus 13 billion for profitability, and minus 15 billion for fixed cost, plus two for exchange rates, taking us to 94.1 billion. Increase in sales and capacity utilization mainly to SP and profitability, SP and FT. labor costs, and R&T, that is what is being used. Exchange rates mainly impacted GA and PE. This is all the presentation from my side. Thank you very much, Mr. Condor, for the presentation. Mr. Hideaway will now talk about the business environment and the outlook. Mr. Hideaway, our CEO, you have the floor. Yes, I'd like to say a few words about the business environment and the outlook. for the business environment, for SVE, the market for semiconductors, for PCs, smartphones, and sort of applications we see expected growth, especially for servers on a monetary basis. The WFE outlook forecasts a growth of investment in China, and the dealers also say that, the DRAM also expected to recover in the second half, Taiwan is going to take the lead in leading edge node investments. So we see a positive outlook here. Power devices investment could become weaker going forward. For GA, in May there will be the Drupa exhibition. And for that, some customers have remained their purchases. We are going to announce new products at the Drupa and we expect to recover afterwards. For displays, the demand has improved as expected. And we are going to turn profitable this period. OLED is increasing gradually this financial year. And for PE, the memory demand print circuit boards has seen a slightly weaker demand and we expect the recovery in the later half.

So overall focus of the business for the full year In comparison with the previous year, we expect the increase in sales and profit. So we will be aiming for renewing the record high for the four years in a row for the profit as well as the sales. And then for the year dividend, then we will be achieving the record high. That would be 224 yen. And this year, so the value of further 2026 and the new midterm business management plan will be started, which will be explained later. As for the SPE business, so WFE, as I mentioned previously, so calendar year 2023 will be minus 5%. That is a landing of the calendar year 2023. And as for the 2024, the market will be growing by the mid-single-decent percentage. And the fund logics and for the leading edge, so then those investments, this will be accelerated so this would be accelerated further as for the memory so the DRAM investment and it would be restarted in the latter half of the year as for the application as the investment as for the fund tree so that due to the increase of the demand of the AI application and the mass production would be front loaded as for the logic and then installation of the new factories and it would be a progress in accordance with that plan as for the memory So related to the AI application in the second half of the year and the GLM CapEx, so that would be restarted. And then we are expecting the recovery as for the land. So gradually the market will be recovered. As for the image device and the power devices, so they are relatively slowing down. As for the image element, investment in China will go up. So as for the power device, it's a little bit sluggish. As for the Chinese market, so the existing and the emerging foundries and the memory combined, so the investment for the mature nodes application will become active. So on this page, so this is about the sales by the application, queue-on-queue. So deal and flush will increase, driven by China. year-on-year for Q4, so that the foundry made a significant increase, and the increase happened in Jiram, driven by China as well. And then, so that the 129 billion SBE sales was a record high, and SQ4, so that it's making a production to the production productivity, so that the free year, year-on-year, So the foundry made a significant increase, and for the dealer, there was an increase, and driven by China as well. And the post sales services and sales increased. However, relatively, the proportion or share decreased. So at the end of the last year, it was the 18% that is the share of the post sales service. Next, please. So this is by the forecast by region. So queue on queue. so that the sales to China will increase, and so is the sales to North America. So year-on-year, and the sales to China as well as sales to United States doubled. So that the full year-on-year, so that the sales to China, so that the more than doubled, and then the sales to North America made a significant sales, so the trend is very similar to the full Q year-on-year, So next page is about the focus of the H1 of this year. So as you can see, the situation is very similar to the H2 of the last year. So the DRAM and the logic is slightly increasing, but the picture is very similar to the picture of the H2 of the previous year. So this is by region. And again, so that dependency on China, Taiwan, excuse me, so the dependency in China will be continued in the H1 this year, and the ratio of the China goes up, and then the ratio of Taiwan goes up. So this is our expectation. So this tendency, so that will be the same in comparison between the H2 and the H1 of the previous year and this year. As for the GA, I mentioned about the droop-up in the ink business. The recurring business has been starting up and this is going to be stabilized. For the free year, OP margin will be the same as the last year. This is our target. As for the FTE, the display demand made a turnaround as we expected. so that the order of the audit will be gradually increasing. But the sales is mainly coming from the LCD for this year. So for the first year, we expect a return to profitability as for the BE, so that the investment in package will be recovered in the second half of the year, and the post-sales service is solid, and the OP margin of the 10% will be maintained. Next, please. So this is about the forecast of the business on the H1, so that the overall H1, so that 276 and the 48, so that the billion operating income and the 17.4% is the margin. And then the second half is the 52 billion, 18.3% for the free year, so that the 560 billion yen of the sales and operating income is the 100%. So the billion, this is the first time for us. And the margin is 17.9%. And then current ordinary profit is 100 billion. And the net income is 72. By segment, SPE is driving So that is the 460 billion yen of the sales and the operating income is 106 billion at 23% and the GA is 48 billion and the 3 billion and the 6.3% of the margin. And the FT, 36 billion of the sales and the profit that will be happening, 1 billion at 2.9 percentage. And the PE and the sales will be 15 billion and 2% of the OP income and at the 13.3 percentage. And the others, so there will be 3 percentage and a minus and the 12 billion. This is adjustment of the growth investment. As for the CAPEX, So some of the capex have been already completed, and the R&D, so that will be $27 billion, and the capex will be $39.8 billion, and then depreciation will be $10.8 billion. And then January, our forecast is for the capex. So this, as we explained, this will be 30 billion, but there is an increase by 9.8 billion, as you can see at the commentary at the bottom. So this is due to the acquisition of the building and the land in order to expand the capacity of the production of SBE. So in anticipation of the next mid-term business plan, starting in March of 2028, we made a strategic investment. And this year, so this fiscal year, So R&D, so that's 33 billion, and the capex is the 30 billion, and then depreciation would be 13 billion yen. As for the R&D, it's coming from the SPE, strategic investment, as well as the investment in the new business. This is our plan. As for the capex... So the centering around the SPE, so that we will establish the facilities for the R&D and then as well as the manufacturing, and then we will build new buildings for the SPE. So this is for the CAPEX plan. So FY20-24-00, as well as the forecast of the 2025-03, So and sales and capacity utilization, there will be a plus of the 28 billion and the profitability improvement is 1 billion and the fixed cost will be going up at the minus 22 billion and exchange of the exchange rate is a minus 1 billion. And then overall end will be 100 billion. As for the sales, as well as the capacity utilization increase is driven by the SPE. Improvement of the profitability is coming from the SPE and the FT. As well as the increase of the fixed assets, this is due to the growth investment in the SPE. And then as the GE and the PE are influenced by the exchange rate. So as for the dividend, so that the FY202403, we will be renewing the record high. As Mr. Kondo has already explained, I will be skipping the explanation. So the FY2025 March, so our forecast will be renewing the record high. So the ¥224 was already explained. So that before and converting it into the split, this is going to be the 448 yen. It is going to be increasing the record high by one yen. So later I will be explaining. So that the and then 30 percent of the payout ratio has been the policy. And then so that we are. So that's continuing this policy of the 30 percent or above of the payout ratio. So next is the Value App Father 2026, and the outline will be explained. Please go on.

First of all, let's look at the highlights of Value App 2023. In July 2022, we revised the targets, but we've achieved all the new targets. And I'm not going to read all the figures, but you can see for yourselves. And looking at it by segment, the values by segment, SPE far exceeds the original target. For GA and PE, we have still reached the target. FT had the issue that the display industry saw lower investment, so it's under the target. However, we see a recovery or we are targeting recovery within this period, the current running period and the new MCP. Let's take a look at the economic value outcome. We have three basic strategies, one of which is creating innovation and increasing corporate value through a same cycle. And we've rolled this out within the company and innovation management was introduced. We've selected the topics and we've revised the R&D strategy. So we've ingrained this in the company culture and for the existing markets, increasing the market share and working on the new scale of new businesses. It's still lagging behind in terms of the results, so this is the challenges that we see. We are going to continue investing in this part. On the bottom, generating cash flow is equivalent to profits by improving both profitability and efficiency. It's a target that we've worked on. We've introduced RIC management and it has penetrated the company. We have a RIC hurdle rate. for our portfolio management, which is the x-axis. And the y-axis is the revenue growth rate. So we see how the different businesses are performing. And we've established this new framework and it has taken root in the company. We've also leveraged SQ3 and SQ4 investments. SQ3 is now fully operational. And it helps us to improve profitability. We've also restructured underperforming businesses. And currently, most of the businesses are turning a profit in the last year of the plan. And we've also shifted the focus to cash flow management based on RIC. And this new structure has also been rolled out over the company and is taken up. On the next page, we talk about the social value. I'm not going to go into the details, but you can see this at your own convenience. And let's look at the major markets during the next mid-term plan. This is the prerequisite for our plans. And this will, of course, have an impact on our own results for WFE. The compound annual growth rate is expected to be 5.8% for GA. The digital printing market is expected to exhibit a growth rate of 3.3% annually. FT is somewhat difficult. 2023 had little investment, so we hopefully can jump on the recovery in 2024-2025. GA is 21%. In 26, we expect to see a normalization for PA circuit boards. The annual growth rate, compound growth rate is 0.6% as of the forecast. So we want to leverage our market share and new products to expand new markets. As for our basic initiatives, main initiatives in the next mtp the current value app 2023 uh when we've uh stabilized our financial foundation this will be the springboard to go to one trillion revenue and this is the growth path for this uh for business growth um as i've said uh we've introduced portfolio management and we're going to do this by product, portfolio management by product on a product basis and also broaden our RIC management approach. For business growth, we'd like to increase our presence in the industry and show new value to the customer with our technological capabilities. So we need products that can make this appeal and also help us increase our market share. That's our goal to receive this evaluation and to increase market share by that. In terms of innovation management, it says new technologies, new products on the market. Of course, putting new technologies, new products on the market is important for us. We are also going to use our new developments, new technologies for our existing businesses as well. And the results will be creating new businesses worth 10 billion yen in terms of sales. In terms of the intellectual property, we want to use it with the technology strategy and the R&D strategy. On the right hand side, you see the Business Foundation. Our approach to human resources in terms of strategy is to create a vibrant corporate culture and make people feel rewarded. These kinds of measures are going to make the whole company more vibrant. And so the key element here is to be a solution creator. For our financial strategy, we want to build a risk resilient financial standing that supports our endeavours in the business growth sphere. For digital strategy, information security has been an important topic in recent years and months, and we're going to work on this as well as DX to drive productivity. In terms of the facilities strategy, it's about developing facilities that support our business growth and also that support R&D This time, we also have a common strategy, which is the sustainability strategy and the brand strategy, which are centered here at the middle of the page. The products that we provide and the services that we provide with our businesses have to make a contribution to sustainability by their performance, and they have to drive our brands, our solutions. So these two things are also contributions to business growth and they are also part of the business growth and the business foundation. This talks about the financial targets. On a community basis, we have introduced the targets of one point trillion or more in terms of revenue over three years. and an average OP margin of 19% or above, RIC 15% or above, and the shareholder return policy is more than 30% dividend to payout ratio, and also a flexible share buybacks based on how Broker's investment in growth plays out. The left-hand side is a four-term programme, so that's something you have to keep in mind during the comparison. This is for each individual segment. Regarding SPE, it's 1.5 trillion over a term of three years, 1.5 trillion yen, average OP margin 23 to 25%. This is the range that we are aiming for. And for GA, we are aiming for 150 billion or more in Sayers community. average OPE margin of 6 to 9%. For FT, we are targeting the cumulative sales of 100 billion yen or more and average OPE margin of 3 to 5%. For PE, a cumulative sales of 50 billion yen or more and an average OPE margin between 12 and 15%. This cumulative approach is based on the fact that in the mid and long term, we have certain growth stages. Value-up further 2026 is where we see this as the first step and then to extend it to the next mid-term plan. So I hope I can benefit from your understanding regarding this.

So those are the non-financial targets. If you have time, please look at those targets. So engagement survey will be started this year. And the score of the 70% or higher would be our target as the KPI for the engagement score of the employees. So next page, please. So on this page, so that you can see the cash allocation. So at the previous midterm year, 44-year cumulatively, so the investment fund was the $406.3 billion. This is a combination of the R&D and the CAPEX. And then we can, so that the 90 video yen, 97.3 billion for the R&D and a capex of the 90 billion for the growth investment. And we paid out the 56.8 billion and then expecting for the advance increase of the 136.4 billion. we returned the debt by the 31.3 billion. So this is a cash allocation over the past four years. On the right-hand side, you can see the current, the sort of mid-term plan. So combining the R&D and the CapEx and the strategic sort of strategy, so that we have 360 sort of billion, R&D would be allocated 110, and the CapEx and the 100, and the strategic investment would be 80 billion yen, so which includes an M&A, in order to grow our business. And the dividend will be 70 billion yen. But depending upon the progress of the growth investment flexibility, we will conduct the share buyback. So I'd like to ask for your kind understanding. So next page, please. So the value of father 2026. So this is business growth and strategy as for the SBE. so that we try to increase the market share of the cleaning equipment. And then we want to provide the body to body, and we want to expand the R&D capacities as well as an acquisition of the new POR. And then we have to enhance the production capacity, so that we have to enhance the production engineering in order to reduce the lead time. so that we'd like to enhance the production capacity and the efficiency will be going up, suppressing the investment, but we'd like to expand the production capacity. As for the reinforcement of the business foundation, so that with the DX utilization, we want to make our business efficient and we have to acquire top talent. So those are the themes of the reinforcement of the business focus. As for the GA, so that POD equipment sales should be expanded, and we have to expand the regarding business, and the package printing business has to be established. And so here, so that the soft packaging initiative will be reinforced, and we are launching a label printing, so combining that, so we try to implement those initiatives for the GA. As for the FT, this business profitability has to be improved. At the same time, so the new coating technology and the new application of the coating application should be expanded. Road-to-road product technology needs to be expanded, as well as the internal OEM business needs to be expanded. The advanced package, as well as the hydrogen-related products will be the target of the internal OEM business. As for the PE, so that direct patterning equipment, In this area, we try to enhance the presence in the industry so that we are working on the direct patterning for the solar register. There is an ongoing initiative that we try to go to the circuit pattern register, direct patterning, and we have to enhance the application of the direct patterning. As for the new business, of the 110 billion yen or further, advanced package and the hydrogen, they are promising As for the life science, so over the past three years, and the next three years, we will be still in the investment phase, as I will be skipping the details. So if you have a question, please ask a question later on. As for the group news and the topics, so that I will be skipping the explanation of the group news, and I'd like to go into the question and the answers. So if you have a question about the related topics, then please do ask your questions. As I mentioned at the beginning, so this mid-term business plan, so there will be the transition to the next mid-term business plan, and we will be in the strategic investment phase. So we will be taking, implementing necessary initiatives. So I'd like to ask for your kind understanding and cooperation. Thank you very much. So Mr. Akira, thank you very much.

We're now going to move on to Q&A. If you have a question, please raise your hand on Teams by clicking the raise hand button. One person can ask two questions and I will appoint you to ask questions. When you're not asking questions, please mute your mics. So I'd like to start with Siti Bhamasan from Siti Group. Thank you very much for the explanation. My name is Shibano from Citigroup Securities. I have two questions. The first question is about the tendencies for the Chinese market. In January, at the earnings call, you said that in the next year, the forecast was pretty solid for 2025-3. So how does it look now, three months onward? What kind of momentum do you expect for the current and next financial year? And what will be the colour for the market? Yes, so right now you will see our first half revenue expectation. China's proportion is 49%, so it's even higher than in the second half. It might go a little a bit downward in the second half of FY25, but we do receive many inquiries from Chinese customers and demand from Chinese customers is going to make a significant contribution and continue to do so in the current financial year. Thank you very much. About the MTP targets. You are doing the MTP over three years. Maybe I shouldn't ask this kind of question. the 1.8 billion at 19%. It looks like OP should be 340. And then you say 100 and so on, and a billion. I think it does make sense. It doesn't seem to be much off. But do you think there's something that you can achieve even beyond that? And what would be the drivers? For example, simply put, will it be just a WFE expansion or high profitability in SPE or share gains? What would be the main contributors, the main factors that came into play here? Well, in terms of revenue segments, the SPE would be the driving segment here. And I mentioned that for WFV, the CATR is 5.3%. So we've calculated on that basis, but there might be a little bit more margin, depending on how initiatives play out. And we've added that, basically. For OP margin, It was a bit above 23% in the last financial year. So we see that as the starting point. And based on this, we'd like to take it to 25%. That's our outlook or our aim. Thank you very much.

Yeah, thank you very much. I am Shimamoto from the Okasan Security. So the WFE outstroke is my question. So that from the previous year, so that the figures has been a little bit changed. So your comments are changed as well. So that what are the, so that the previous, so that the forecast was the lower, so that the single digit percentage. So what made so that this kind of change this time? So in the previous forecast, So that the calendar year 2023 will be going down further, but at the end of that day, so that this is slowing down, the reduction of the market was not so bad. So that is a reason for the revision of the forecast. So that the single digit, mid-single digit is our expectations, but so that the immediately, so that this will be 4%. So this is reflected by the result of the 2023. That is a reason for the change of the outlook of the WFE. I see. So the minus 10% was the previous sort of forecast, but the minus 5% was the current situation. That is why the, that the, how about the comment of the power device? So there is a change. And the foundry was stronger than expected. So how do you see the changes in each of the segments? So that's for the power devices. So I think they are in the adjustment phase, so that my impression has not been changed since the last three months as for the foundry, so that the investment was loaded. So over the past three months, and this is a new topic for the foundry, so that they are combined, so some are better, some are worse. But the current momentum strength, so that this overall tone is the same, yes. So my direct feeling has not been changed so much. There is a swapping of the factors among the business segments, but the overall tone is the same. The second question, As for the mid-term business plan, SBE, capacity is my question. So the next three years, what will be the increase of the capacity of the production of the SBE? What is your target so that you have a plan to construct new factories? So SQ5, so that investment has been completed, so that we have to make it 100% in full operation. so that the 500 billion yen of the consolidated sales would be possible. So that with this initiative, so that the production engineering technology would be enhanced and the capacity would go up. But it's a little bit too early for me to mention, but during this business plan of the three years, so that productivity would be our main initiative. and then production engineering capability and the automatization would be enhanced. And then I will try to increase the production capacity by the 10% or 20%. So this is my target. So let me confirm, SQ6. So do you have a plan of the SQ6 so that this is going to be incorporated into this MIT sort of business plan? So is this the case or that you are not able to make a comment about the SQB6? So I think that this is a very dedicated question. So as for the SQB6, the SPE capacity, so that this will not be making for contribution to the capacity of the SPE. So FT and the hydrogen will be the target of the SQB6. So engineering space. so that there will be, so that the purpose of the S-Cube 6, but that doesn't make a contribution to the capacity enhancement of the SPE, so that the crude oil facility, so the production, so that that needs to be improved. By doing so, we try to increase the capacity. So thank you very much. I understand. That's all. Thank you.

Thank you very much, Minister Shimada. Let's move on to Yoshio Okasan from Nomura Securities. Hello, can you hear me? Yes, yes, I can. Thank you very much for giving this presentation. I have two questions. The first one is about the MTP, the market approach. On page 33, you say the WFE market, you say what the premises are. And this is just WFE numbers. So what about the total addressable market for cleaning equipment? Is there a difference in terms of the way you see the markets? You said before that the term for cleaning would go up higher or more quickly than WFE. What kind of premises have you been taking? Yes, as you said, The annual growth rate, WFE, is one of the places that we look at. And we expect an increase of the TAM for cleaning and opportunities of cleaning for advanced packaging areas that we can capture. So in terms of that part, for us, it would be something that we would try to capture properly. But this is included in the figures that we've talked about. Do you have any specifics on that? What the specific figures look like for the term of cleaning and so on? Nothing to disclose at this point, unfortunately. But maybe during the Investor Relations Day or from SPE, there might be some details on that. As a follow up to that, for the cleaning equipment, the market share you mentioned uh share increase in the medium term plan currently what is for 2023 2024 what's the trends been like and uh what kind of share increase opportunities do you see in the future well the market share let me say this gartner uh publishes that And according to that, as of May, late May, we will end the analysis and make an announcement. I think that's more suitable. Currently, mostly 2020, 2023, the market share hasn't changed a lot in these years for our set screen. However, terms of what we have now what we see we see an increase in market share that the way we understand it but um we also have the weak land yen playing a role and the gardener is being calculated in dollars so we might be discounted for that in the gartner evaluation but there will be an official announcement at the end of may i see thank you very much and then i'm going to the second question Currently, 23% SPOP margin is where you came in. In the end of March 2025, you see it being stable, more or less stable, flat. Maybe because of the evaluation equipment. But maybe, do you see any productivity increases for SQ5? Why? the way you forecast it to be for the end of March 2025. The development cost is included in our strategic investment that we have to make and this goes for talent for people and these strategic investments have to be made early on in order to really be able to communicate our added value to the customer. So in that sense, the 23% is what we have disclosed now, but we'd like to use this as a starting point for next period and the one beyond to make further improvements. But this is where we see it standing right now. I see. Thank you very much.

Thank you very much. So thank you very much, Mr. Yoshioka. So next, let's go to, so, from the Morgan Sunday. So please unmute yourself. So thank you very much for the opportunity. Thank you. So my first question is about the prospect of China. So there are two approaches. so that the United States is tightening the restrictions. So maybe your sales will be affected because of that. This is one way of thinking. There are some cancellations increasing so that you might be affected by the cancellation. So what is your view about the trend in China going forward? So as for the China restriction regulation in July, So there is this restriction and we have to follow the restriction in order to conduct the trade. And then going forward, very difficult to make the comments. We are not in the position to make a comment so that we want to keep watching the ongoing trend. And we have to follow the restrictions and the regulation in order to do the trading with China. So the other point is about the cancellation. This is another question. So that the timing of the increase of the, so that the order is that the way we start the production after the delivery date is fixed. So this is the timing. So in that process, so the cancellation and no cancellation happened in that process. So it is depending upon how to increase the order received. Thank you very much. My second question goes about the operating profit margin. Talking about your capability and position, I think you are not ambitious enough. so that the 25% of the OP margin was achieved over the previous year, and that you have a greater technology as well as the, so that you are going to make the investment of this strategy. I hope that you will be aiming for the 30% of the OP margin. So we expected to hear very positive and ambitious target of the OP margin. But what is the reason you are not that ambitious about your OP margin projection? So I am not satisfied with the current projection of the OP margin, but through the strategic investment, so that the next stage we have to target at the higher growth. Of course, so that we want to compete against the competitor and we want to deliver the added values more than the competitors. So this will be proceeded strategically. So this is our activities in the coming three years of this mid-term management plan. So additional question. So that means, so what is your vision in the operating profit personally? I hope this should be 30% or higher. I have no comment. Sorry about that. So understand. Thank you very much.

Thank you. Thank you very much for the questions. We'd now like to move on to Mr Yoshida from CLSA Securities. Please unmute yourself. Hello, my name is Yoshida from CLSA. On pages 19 and 20, you show the breakdowns of sales for SPE. I understand that you talked about this downtrend for China and what about the regional breakdown for the second half and maybe for the calendar year 25 or for the next period? What are the directions per application on an application basis? Well, for the first half, the orders will be what decides our revenue in the second half so it all depends on the kind of orders that come in now as I've said we have the feeling that China is still very strong going very strong maybe less intense but DRAM and other investment is also picking up again so overall Maybe the breakdown might be different, but all the volumes should be the same kind of strength, the same kind of volume in the second half. So the revenue itself should be on the same kind of scale that continues. Let me just ask, So for China, it would be the same in both halves. But then we were talking about DRIM and Foundry. This gives the impression that 240 for both halves, it looks like there should be more investments in the first half and more revenue. And China should account for lower parts. that something that's not definite yet or haven't you included it well as you've pointed out the orders are now coming in and the first and second quarter depending on the orders we see there i would like to update our views i see the second question um You have a framework of 80 billion yen for strategic investment. What kinds of investments are you interested in when it comes to M&A? And with my shareholder's return, you mentioned 30% dividend payout ratio. And you're also saying that you act flexibly on buybacks depending on the investment. If you don't find... good strategic investment M&A opportunities for 80 billion. Are you going to allocate that to shelter returns? We haven't made that disclosure yet, but in our grant design, we are saying these are the growth areas that we identified. So these will be the main focus areas that we search for opportunities in. Of course, the existing business areas will also be candidates. I hope you understand that. And furthermore, about share buybacks. the image or the rough idea that you expressed, I think hits the point. And Mr. Kondo will speak about this. Yes, this is the implication that we intend. Right. Regarding M&A, are you targeting SPE as a segment or is it just the new businesses, including SPE? How should I think about that? What kinds of areas, if you can speak more broadly, including SPE? Because we as the areas that we think about digital transformation and also mobility are areas that we focus on life science, or shall I say, what's it again? Sorry. Four areas, four strategic areas. that we are aware of or that we focus on in terms of the opportunities. Thank you very much. That's all from my side.

So thank you very much, Mr. Yoshida. So next question, we're going to the question from the English conference room. So that conference room will be changed. So please give me some time. So please wait for a moment. So Adrian-san, please ask your question. Yeah, it looks like there is a technical difficulty of the unmuting. So I tried to go to the next person first. So please wait for a moment. The Adrienne is speaking something. Please wait. Okay, let's go to Mr. Nakamura from J. Goldman Sachs. Due to the time limit, Nakamura-san's question will be the last question for today. Yeah, thank you very much for this opportunity. So due to the time limit, I tried to ask a question very briefly. So fixed cost, so that this would be increased by the 25 billion. What is a breakdown? So after the FY26, what is the view of the allocation of the fixed assets? So that the $100 billion will be spent for the strategic, so that's the management, and the SPE, so the investment will not be so large, but then what would it be so that you are a breakdown of the strategic investment in the next three years? So ROIC with a 15% or higher, 15.9%, was the previous four year, there will be the decrease down to this next three year. But when is the timing to enhance the stage of the ROIC? So this is my question. So as for the fixed assets, Mr. Miyagawa will answer your question. So Miyagawa is speaking, so I have to answer your question. So FY25 and the fixed cost increase, what is the reason for that? So SPE is the main reason. And then when it comes to the breakdown or the contents, so that the capacity of the production is one of the reasons because we have to hire more people and the labor costs will go up and the SQ3 and SQ4 and SQ5 depreciation will go up and And then as a competitive new product development is needed, that is why we want to allocate more money for the R&D. So those are the factors of increase of the fixed cost. So thank you very much. So during the mid-term management plan and the strategic growth investment, I'd like to talk about my image. So first of all, SPE, so that the managerialization is happening in the entire industry and for the package and so that there is a movement in the package so r d capability has to be revisited by screen so and together with the spe business units so that we are developing the development strategy And we are reviewing our position and our direction so that the CAPEX as well as the R&D, we try to allocate more money. So this is the main reason for the increase of the fixed cost. And the CAPEX or the equipment for the R&D equipment and the facility will be needed. So please understand this. Of course, we have other so that the target, which requires some cash allocation, but the main target is allocation of the facility of the R&D. Yeah, thank you very much. I want to make one more comment. In the Hikone area, so that we don't have the, so that we are really full, we don't have the, any, so that the available, so that the area, And we have to look for the other sodata lands other than Hikone. So this is our plan in the future. So thank you very much. So thank you very much, Mr. Nakamura. So you might have more questions, but due to the time limit, I try to close the meeting. We are a little bit behind the schedule. I'm so sorry for that. But with this, so we try to close. the 2024 March financial briefing meeting will be finished for the screen holdings. Thank you very much for your attendance. Thank you very much for your kind participation. Please support our company in the future. Thank you.