Screen Holdings Co U/Adr

Hello, everyone. Now it's time to start the Green Holdings 2025 March. The third quarter's financial results reporting session will begin now. Now I would like to introduce our presenters.

Representative Director, President, CEO, Toshio Hiroe. This is Hiroe. Thank you for having me today. And representative director CFO, Yoichi Kondo.

I am Kondo. Thank you. And on top of CEO and CFO, we have relevant two directors. Senior corporate strategy officer, Masato Goto. I am Goto.

Thank you. Senior financial strategy officer, Akihiko Miyagawa. I am Miyagawa. Thank you.

At the beginning, our President Hiroe is going to talk about our delayed submission of the interim securities report. We sincerely apologize for the concern and confusion this has caused to our stakeholders, including our shareholders and investors. I would like to give you some report about that. First of all, let's see the results. On the 10th of September 2016, The indefinite conclusions from the auditing was attached to the interim financial report that we have submitted to the Kanto local finance bureau, and it was accepted. And on the 13th of February, the 2025 March 30 quarters, Their interim financial results, the flash report, was also submitted with their review report from auditing firm. And as to their special investigation committee report, on the 10th of January, the report was accepted by a board meeting, or the board. And actually, there was some improper treatment of numbers, partially. After reviewing the report, however, the scope is limited and also the significance in terms of the finance amount was limited. Therefore, we decided not to revise the past year's settlement. The publication of this report is scheduled on the 14th of January. Now about the measures to prevent recurrence. On the 10th of January this year, we launched the project team to formulate measures to prevent recurrence. So basically, in the Special Investigations Committee's report, we now realize that there has been some gap between the field operation and the profit recognition standards and also the compliance awareness must have been suboptimal. So in order to address these problems, we are now looking into the possible countermeasures. So in the end of February, we are planning to publish the countermeasures against the recurrences. So when we do so, we are also planning to announce the plan of the penalty. Now, we would like to move on to the consolidated financial results report. And the presenter is Mr. Kondo. Now, let me give you the report about the financial results. The Fed Quarters consolidated results. Here, one year, we were able to achieve both increase of the revenue and the operating profit. ordinary profit net profit across the border we were able to accomplish the record high spe a drove uh this positive uh results uh so is the ga nft they are trending very solid and they asked to spe uh the revenue and the profit increased year on year marked the record high revenue on operating profit and open margin. Equity ratio was 61.4%. Now the numbers. This is the vertical, the cumulative numbers. The revenue was 459.9 billion. Operating profit, 100.6 billion yen. Open margin, 21.9%. Ordinary income, 102.3 billion yen. Net profit, 69.5 billion yen. The year-on-year difference is 112.1 billion yen increase in terms of the revenue. The operating profit up by 36.9 billion yen. Ordinary income up by 37.6 billion yen. Net profit up by 24.9 billion yen. Health by destination, 12% Japan, 14% Taiwan, 47% China, Korea 7%, 6% Asia, North America 9%, and Europe 5%. Now for the sales spread or breakdown by segment, SBE 84.8%, GA 7.6%, and FD 5.6%, PE 1.5%. Now third quarter, single company numbers, the SBE revenue 154.8 billion yen, Sobering profit, 41.9 billion. OP margin, 27.1%. GA, 13.7 billion. OP, 1.2 billion. OP margin, 9.2%. FT, 10.2 billion. Revenue, 1.2 billion. OP and 12.4%. OP margin and PE, 2.6 billion. revenue minus 100 million yen of the op and the op margin minus 2.3 percent now this is the q1q first spe increase of revenue by a 38 billion yen and op increased by 11.9 billion and this was due to the increase in china and korea as for ga increase in sales by 900 million yen profit is flooded Recurring business is trending positively, mainly in the US, and fixed costs have increased. The increase of revenue by 800 million yen, the profit increased by 900 million yen. OLED, LCD, both solid. PE, minus 300 million yen in revenue, minus 200 million yen in profit. The recovery of the cutting-edge demand is delayed, and post-sales is solid. Now, year-on-year. This is the third quarter's cumulative numbers, SBE. The revenue, 383.9 billion yen. Operating profit, 100.9 billion yen. OP margin, 26.3%. GA revenue, 39 billion yen. OP, 3.2 billion yen. OP margin, 8.4%. FC revenue, 24.8 billion yen. The OP, 1.3 billion yen. OP margin, 5.5%. PE revenue, Revenue, 9.6 billion yen, and operating profit is 500 million yen. SPE had a big increase in revenue and profit, mainly in China. Taiwan factory and member increased mix also was positive. MTA, revenue increased, but profit decreased, and recurring business is solid. The fixed cost has increased as well as increased. The FT, there are large increase in both revenue, And profit, LCD audit, both increased and cost and activities has contributed to the increase of the profit. PE, minus 800 million yen for the revenue, minus 700 million yen of the profit. And we expect the increase of the equipment demand next year.

The asset remains the same. Total asset remained unchanged. The cash decreased due to the transfer to the certificates of deposit. The total net asset amounted to ¥415.9 billion, and the equity ratio improved at 61.4%. And as for the cash flow, the third quarter operating cash flow is ¥10.9 billion, though Free cash flow is 8 billion, and then the financing cash flow is 12 billion negative. And then the Q1Q, the cash flow declined, the advances received, which are related to the Chinese customers, and also interim income taxes payment. And so in Korea, the cash can be generated as same as the operating profit. And then the analysis of operating income growth, the cumulative last year, 63.6 billion. And the social capacity utilization was positive by 46.5 billion and the profitability 1.5 billion. And the fixed cost, 12 billion negative and exchange rate of 1 billion. And then the result was 100.6 billion. And then the increase in sales and capacity utilization is attributable to SBE and FT. And then the increase in the fixed cost is mainly due to growth investment in SBE, labor costs, depreciation, amortization, R&D, expenses, and expense raising back to the GA and the PE and the YANZ depreciation. Though I believe that was Thank you, Mr. Kondo. Now the CEO, Hiroe, is going to talk about the business environment and outlook. Mr. Hiroe, please. I'm going to talk about the business environment and outlook. The first about the business environment, SBE, the equipment. there is a trend of accelerating capital investments in cutting-edge semiconductors and by Chinese clients. As for the semiconductors, PC, smartphones, servers, investment, the growth rate has been slowing down. But anyway, all of them making the positive growth. And on the monetary days, the AI accelerator is driving the growth. And as for GA, the business environment remains steady, particularly in the U.S., mainly POT. And the recurring business is also showing stable progress. As for FT, The OLED has driven the growth, but the investment in the LCDs remains steady, and we aim for profit growth next year as well. As for PE, despite the challenging performance this fiscal year, the various inquiries for next year gradually begin to arrive. As for the business outlook, This fiscal year, the full year forecast has been revised further upward from October announcement that sells the OB income, ordinary income, the income, all of them expected to hit the regular highs for the fourth consecutive fiscal year. And the year-end dividend forecast has been also revised up to 163 yen per share. Total annual dividend is projected to be record high at the 283 yen per share. SBE business overview. Logical starting from SBE market trends and outlook. In calendar year 2024, expected to end with around 9% growth. In the current year 2025, we expect around 6% growth. Concerning the foundry, we expect the expansion of the AI market, especially the cutting-edge nodes investment is expected to be accelerated. As for the memory, The growth is driven by the AI-related investments, and this trend will continue in CUI 2025 as well. Investment trends by application. As concerning the foundry, the investments on cutting-edge nodes and advanced packaging are in progressing steadily. And with regard to logic, investments are going to be focusing on cutting-edge development. And with regard to memory, the AI demand drives the growth, and the investments for HBM are surely continued. About the image devices, the industry-leading company and Chinese clients are showing the signs of resuming investments in power devices and others. The demand recovery is slowing down than we had expected. Talking about the China market, the investment plans continue to be brought forward. And going forward, investments are expected to gradually stabilize. And our expectations have not changed. Next, the SVE composition of equipment sales by application. In the Q3, in comparison on the Q2, the fund rate increased significantly. The flush also rose. 3Q cumulative year-on-year, the ratio of cells to French rose significantly. And talking about the post-cells, the overall cells increased. Therefore, ratio of cells decreased. However, the actual cells amount remained at the same level. In October, the balance between first half and second half was not announced, but more than we had expected, we are on the positive side. And then the leading-edge investment and the Chinese investment requested to be accelerated. We were able to recoup the sales due to these factors. And the composition of sales by destination. If we compare the second quarter and third quarter, as I mentioned earlier, the startup was accelerated. Therefore, the ratio of sales to China increased significantly, accounting for 49%. The central investment for HBM, the sales to Korea has also risen. And the 3Q cumulative year-on-year, The ratio of sauce to China keeps growing at 47%. It's accounting for the big portion. And the ratio of sauce to Taiwan increased due to the investment in cutting-edge area. Next, the forecast going forward. The Q3, the sauce. made a significant increase and led by their accelerated cutting-edge nose investment and investment in China. In Q4, the request from our customers to accelerate their accelerating their source has been made. Therefore, this trend will continue. And the October announcement and the January announcement difference, the second half-sales forecast increased significantly from October forecast due to the request for accelerating Chinese clients and cutting-edge investment. And the productivity improvement by SQ5 was accelerated so that this make a contribution. And as for the full year results of last year and the full year estimate of this fiscal year compared, the sales ratio of foundry is increasing and that is driven by Taiwan and China. Logic investments are focused on development. So now the investments are active.

This is the sales breakdown by destinations. The third quarter's actual and the fourth quarter's forecast. Actually, the third quarter, we had the increase of the China sales ratio. In the fourth quarter, it is expected to decline a little, but relatively speaking, Taiwan's ratio is expected to grow in the fourth quarter. 32% is going to be from Taiwan. So Taiwan and China's rate are going to be balanced. And October's forecast and January results, if you compare the two, due to the request of the acceleration, there's going to be a big upside, particularly by regions. China and Taiwan's sales are expected to grow. So last year and this year, the full year comparison, including the actual amount of the sales, the Chinese rate is expected to grow. And as to GA, Mainly from North America, POD is driving the sales. That's the characteristics. And along with that, recurring business mainly on ink is trending solidly. So looking at the fourth quarters forecast, more than half of the portion is represented by them. And at the moment, we are developing new products. So next year, We would like to release them in order to drive our top line. As to FT, as I said before, OLED is driving the business, but LCD is also solid, both for revenue and orders. We are seeing the same trend next year as well. Their display trend or display demand is expected to be solid. In the first half, we were able to come back to the surplus, so in the second half, we are expecting to improve the profitability, so we should be able to accomplish the surplus for the first time in three years, and that's our target. For PE, given the miniaturization trend of the circuit board, the cutting-edge investments recovery seems to be taking at some time there are some trend of the recovery but it is taking some time and for sales is trending solid so we would like to grow for sales furthermore so this is the uh business forecast of this year so as to the actual of the third quarter that's been already briefed so I would like to give you some overview. If you take a look at the bar right, this is the fully forecasted revenue, 616 billion yen, and operating profit, 126 billion yen. OB margin, 20.5%, so I expect it as the ordinary profit, 127.5 billion yen, and net profit, 91.5 billion yen. So respectively, they are overshooting the budget. So we have made the upward revision. SBE is driving the growth. SBE's revenue, $510 billion. Operating profit, $130 billion. Open margin, 25.5%. So compared with the previous forecast, the revenue-wise, there is an increase by $37 billion. As to GA, the revenue, 51.5 billion yen operating profit 3.5 billion yen of the margins targeted 6.8 percent again in terms of the revenue we are increasing by 2.5 billion yen as for ft revenue 37 billion so some customer projects are to be postponed to the next year on the other hand in terms of the profit 2.5 billion yen is expected, and OP margin 6.8%. PE revenue 14.5 billion yen, and OP 1 billion, and OP margin 6.9%. 6.9% were struggling. The third quarter was negative, but in the fourth quarter, we'd like to improve. And as a result, we are going to work hard to accomplish those fully forecast and other adjustment including the development in holding revenue 3 billion and the ROV is minus 11 billion and these are not changed from the previous forecast and we are aiming to accomplish these numbers for the full year now R&D expenses and capex and depreciation amortization R&D

Just like a previous report, we are planning a 33 billion as per CAPEX.

Depreciation is not the focus. Consumption is not progressing. Some projects were postponed. Therefore, our focus is 28 billion. So this number was revised slightly as to depreciation and monetization. It is 12.5 billion yen. So these are the targets we are going to accomplish for the R&D. Basically, there is the progress according to the schedule. Mainly in SBE, we're going to implement the strategic investment, but we also are going to invest in the new businesses as well, and particularly advanced packaging area. Strategically, we would like to proceed with the investment.

As for CAPEX, It is going to be heavier in the second half.

Again, mainly in SBE, R&D, the manufacturing equipment are invested in HIKONE new building. This is a hydrogen-related building, and this is scheduled to be completed. So these are the scope of the CAPEX investment. And this is the profit analysis comparing last year and this year. So last year, it was 94.1 billion yen. The revenue increase and utilization ratio has added 47 billion yen and profitability plus 2 billion yen. And the fixed cost of APTA is negative minus 18 billion and the Forex plus 1 billion. So we are forecasting 126 billion yen of operating profit, so increase of the revenue. And the utilization rate is driven by SBE and FT. Majority is actually contributed by SBE. As to profitability, the positive factor is the SBE. It is driving the number. As to the increase of the fixed cost, again, SBE. is the main factor holding new business is making the intensive investment as well but they are both important investment for growth and they are including the labor cost depreciation and R&D expenses as for dividend for March 2025 years dividend forecast is 163 yen per stock this is upward revision And therefore, the fully dividend is going to be 283 yen. And this is going to be the record high. So the consolidated dividend payout ratio target is 30%. So if you do the math, I think you'll be able to come up with these numbers. And other topics, they are included in the material. So please take a look at them when you have time.

Thank you, Mr. Hillman. Now, we'd like to have a question and answer session. And the first is Yoshida-san of CLSA Securities. Thank you, Yoshida of CLSA Securities. which was a wonderful financial result. And then as for the WFP forecast of 6%, I would like to ask, by application, what is the respective growth rate? And also the growth rate over China, what is your expectation? And the CY25, if you divide the first half and the second half, what is the height of the mountain? As for the WFE, the forecast, I would like to ask you, and Hiroe is going to answer to your question, the forecast for the 2025, okay? Yes. And as for the forecast for 2025, the foundry is expected to be very strong. We expect the foundry is going to drive the growth. Taiwan foundry is the main one, but the Chinese foundry will also be another factor to grow. And the logic is expected to be slower a little bit. And the D-RAM in the memory, the investment is expected to be steady. And the NAND in the second half is expected to pick up. The weak Well, area is a power area. The investment in power is expected to decrease. And the entire Chinese market, it is expected to be stabilized. And so next fiscal year, especially the first half of the next fiscal year, the WFE follows a calendar year, but our... first half of fiscal year, the Chinese market is expected to be steady. But toward the second half, there might be some adjustment gradually. Throughout the year, the calendar year 2025, it's almost the same as 2024 in our expectations. So what about the mountain height of the first half and the second half? In the first half, the orders have come in sight. Therefore, we expect it to be steady. In the second half, it's a little bit uncertain. Having said that, the sum amount of order are expected to be made. Therefore, so first half and the second half, the first half for souls is expected to be stronger according to the current situation. Thank you. The second point, in the midterm management plan, the growth investment progress, And depending on the situation, you are going to make the flexible share buyback. And then in comparison to the forecast, the capital investment is a little decreased. And then the performance is quite good. And under current situation, what is your idea of the shareholder return for the next fiscal year? In our policy, the 30% payout ratio will be maintained. While keeping that flexible, we are going to conduct share buybacks. And that is our policy, which was announced. And the contents of investments are being scrutinized. Various things have been visualized. And so accordingly, we would like to make a release to you. internally when we have come inside, and then we would take some actions.

Thank you. That's all. Thank you, Mr. Ishida. Next is the Morgan Stanley MUSG Securities, Mr. Wadaki. This is Wadaki speaking.

That was an impressive financial result. My first question. So the cleaning equipment seems to be doing extremely well. So what's the reason behind that? Compared with other equipment, it is doing especially well. So if you have any analysis, could you share the results of that? Let me take that question. So as for the cleaning equipment, Since we mentioned in the previous RR day, the more the mineralization investment goes on, then more benefit we receive. Another point, advanced packaging area. In one sense, it requires some special cleaning process, and therefore, we can collaborate with them And we are commercializing our special technologies, and that is now leading up to the business results. So that is our strength. So with the foundry customers, we are moving forward together, and that is actually driving our performance. So how much of the percentage of the revenue did you make from the cleaning equipment for the packaging application this year and next year. We are still looking into the numbers and we are not yet announcing and disclosing the numbers. So we are still reviewing the numbers. So at some point of time in the future, we should be able to share the information. I'm sorry, my second question. I think this is related to Mr. Yoshida's question. Not just your company, but to all the equipment manufacturers are receiving the request of acceleration from China, and the revenue to China is basically very profitable. So next year, there could be some negative backlash. I understand that you have some visibility in terms of the revenue, but I am also still worried in the second half next year And also the mix is going to be affected. So how will it impact on the product's profitability improvement? Like you said, right, there is the acceleration of the project from China. And those are the projects with a high profitability for us. So this time around, this has really contributed to the increase of the profitability. And towards the next year, that is going to be influenced. So we will have to take on new measures to improve the profitability. We can't negate the fact that the business mix is going to be negative or is going to be worsened next year. However, our profitability standing has improved to some extent, particularly S-Cube 6 and other Hikone plants. Various initiatives are now contributing to the profitability. think that we'll be able to deliver the satisfactory profitability next year as well. Very clear. Thank you.

Thank you, Mr. Badaki. And Mr. Shimamoto of Okasan Securities, please go ahead. Thank you. My name is Shimamoto of Okasan Securities. I'd like to ask about the WFE. I wasn't able to join the first half. I'm sorry if you have already talked about it. I'm sorry about that. But the direction by application, what would be the growth rate, respectively, foundry, memory, DRAM, and NAND, and also Chinese market? Would you give us more details? The respective growth of each application is under scrutinization. Therefore, I cannot talk about the detailed numbers, but the strongest growth is expected to be foundry. Foundry, the investment themselves in the cutting-edge field is going to increase. And as I answered previously, the investment in the miniaturization would give us positive aspects, and that will be the driver. And the ratio of China is expected to decrease a little bit, and then that will become a sort of offset. And the major one is those things. And it's common to WFE. It's a common trend to WFE. And the investment in memory is a deraminated investment. It's expected to pick up a little bit. And the NAND as well, we expect some increase. And as for the numbers, we are going to examine further so that I can talk to you later. Let me check. In the question of Yoshida-san, as for China, the last year and this year, I heard that the same level. What was the same level? I'm sorry, according to the WFE, the same level. Our share of sales is a little bit decreased. And the WFE, I mean the same level in terms of the monetary value or ratio, the compositional ratio. So the monetary value is same level. Sorry, we haven't examined it in detail. And the second point in relation to this, the concept for next fiscal year, you outperformed the WFE this year, and then you were very strong in the I think outperform is okay, but two consecutive years, is it really true to make such a significant outperform? And then for the next fiscal year, what is the probability of outperforming the WFV? Talking about the next fiscal year, we are still under study. And so the next occasion, I would like to give you details. The source, which was expected to be made the next fiscal year, has been shifted this fiscal year. It was accelerated. Therefore, by that amount, the forecast for next fiscal year, there is a summer decrease. But we are considering the 10% growth. We talked about it in the last announcement. However, we would like to achieve growth That level, however, our forecast is same level or higher. And we are going to scrutinize it and I would like to make an update next time. Thank you very much. That's all.

Thank you, Shimamoto-san. Now next is Mr. Nakamura from Goldman Sachs. Go ahead.

Thank you very much. Thank you. First question.

As to the performance of SBE business this year, the third quarter's revenue was beyond 150 billion yen. So actually, there is an increase of the production capacity as you first anticipated. So if this strong demand continues, do you think you can continue to ship this much every quarter? And the production capacity excuse me the profitability in the third quarter is 27% however in the fourth quarter it is going to come down to the 23% so in the current environment what would be the average open margin that you can accomplish so in terms of the production capacity honestly speaking it is not at the level where we can constantly sell beyond 150 billion yen. In the third quarter, we did a lot of stretching so that we can keep up with the demand. So if we constantly have the demand for 150 billion yen of the revenue, then it is going to be tight. So in the fourth quarter, it is 120 billion yen expected, and therefore it is going to give us a bit of a leeway. And SQ5 has been fully now operating We are now improving the productivity continuously. So next year, maybe somewhere in the middle of next year, we should be able to have the production capacity that can constantly produce to achieve 150 billion yen. So we would like to give you the update information. as per necessity and in terms of the fourth quarter profitability is expected to decline and it is because of the reduction of the revenue mostly the actual profitability itself is not going to change that much that's our anticipation so in that sense in terms of our capability of operating profit margin capability should be around 25%. So if it is around 600 billion yen of revenue, then there's going to be upside. But if it is around 500 billion yen double, then the open margin could be around 25% or slightly lower than the 25%. That is going to be our actual ability. Thank you. The second question again. about the way to look at the revenue of SBE business. This is a clarification question to the previous question. So at the moment, next year's revenue-wise, well, you are saying that it is going to be almost the same as this year. So you are saying that it is going to be the same as the revenue performance for the year ending in March of 2025? Yes. the March 2025 year, we are expecting to have the 510 billion yen of revenue. So either that level or higher than that is what we are aspiring for. Thank you very much. That's all from me. Thank you.

Nakano Myo-san from Jefferies Securities, please go ahead. Nakano Myo from Jefferies, thank you. Sorry to ask you the similar questions, but the 2025 WFE base, the China level is same as this year. But in the Q2, the financial report, the EU said that China is expected to go down around 20%, if I remember correctly. And then for the third month, China's sales increased. Instead of two to three months, but recently, Chinese investment inquiries are coming. And originally, it was expected to go down to around the mid-30% level, but it seems to increase a little more. When you mentioned for the past two years, the new customers of China made aggressive investment. Therefore, investment plan in 2025 was not so strong. I remember you mentioned that, but recently the situation has changed drastically. It's not that drastic, but they are a bit more active, in my understanding. On the other hand, in December, the U.S. new regulation was imposed, and then the many companies are listed in the entity list. What kind of impact that list would give you? At the moment, the comment hasn't changed from the previous time in the U.S. entity list The company numbers have increased. However, we follow the Japanese regulation for export. And according to the legal guidelines, I'm talking about this. But we heard and expect that the regulation will be tightened. But to give you some comment on that, it's a bit too early, and I'm not in the position to talk about the trend going forward. And so after the first half of 2025, you receive accelerated investment, but in the second half of 2025, including the regulations, it's still uncertain. Yes, the... not sure about the regulations. So we are talking about excluding the regulations. In fact, if the regulations are newly imposed and then based on the regulations, what kind of impact will be given? I would like to share with you when it has been cleared. And the second point, this is also a confirmation. At the previous time, WFE is expected to increase around 10%, but WFE is 6%, and then your company is targeting the 20%. remaining the same. And so the relativity to the WFE is because this fiscal year's results is too strong. And the WFE is, we expect the WFE to land around the 9%. We still have a fourth quarter In that sense, along with the request of acceleration, we expect an increase in sales. In the third quarter, we had an increase, but in the fourth quarter, even if we increased, some of the shift from the fourth quarter to the third quarter, but still we have an increase, but we get some decrease in the 25, therefore, that we expect a little lower than we had expected. And the WFP's number is a little bit tricky. And the yen-based trend is around, I think, FY24 is around the 25% growth. And the WFE is 9%. And then the increase higher than that. Such benchmarking is not appropriate for benchmarking and focus the companies in Japan. Yes. it's a bit difficult for us to make a comment because it's a fact that that is affected by the foreign exchange rate. So it's a bit difficult to talk from a viewpoint of Japanese yen. And the WFE follows the dollar base, and then they see the growth rate. And as you mentioned, the Japanese equipment manufacturers under the current foreign exchange exchange rate trend, it becomes lower. Yes, thank you very much.

Thank you very much, Mr. Nakano-myo. And next, SMBC Nikko Securities, Hanaya-san. I am Hanaya from SMBC Nikko Securities. Can you hear me? Yes. Well, the time is tight, so first question. would like to ask about China. So your assumption is based on not really including the regulations. However, the customers are worried about the regulations and they are asking for the acceleration and the shipment is now happening in the third quarter instead of the quarter. So they are worried about the risk of no longer being able to purchase the products from you later on. Do you think that is the situation?

Have you been discussing that backdrop? Honestly speaking, we don't know, but probably what you have said could be right. That's our assumption.

So we don't know yet what kind of regulations will be implemented so earlier the better. could be their mentality. That is just our assumption.

Thank you.

Second question. So the third quarter's performance was very strong. So if you take a look at the Q&Q, the revenues increased and the profit increased. Compared with the revenue increase, profit increase was not as strong. So in the second half, I think you are... going to uh increase your profit in the second half is that why the evaluation value well unfortunately that is uh slided to the fourth quarter that's right so it is planned to be posted in the fourth quarter in terms of the profitability in the third quarter i would like to ask me a person to make a comment as to the profitability in the third quarter so the revenue increase was much stronger in the third quarter compared with the profit increase. I think that was the question. Is this a correct understanding of the question, Hanaya-san?

Yes. Okay.

So, Q1Q, the revenue increased by 38 billion yen, profit increase. Profit is increasing a lot, but it is 11.9 billion yen. I thought that it could have been higher. Okay, understood. Well, the first quarter and second quarter customer mix is the reason and that's why profitability is not as strong as the revenue increase that's all so the second quarter was better is that what you mean yes that's correct so if the Chinese sales to China increased Well, in the second quarter and third quarter, the China sales representation has increased. However, the mix other than China was worsened. Or is it the mix change within China business? Well, within the mix in China, the new company's profitability is high. But if we have more business with existing customers, then it is negative impact. in terms of the mix and the profitability. And there has been the acceleration of the cutting-edge business. Therefore, that had a slightly negative impact on the profitability. Understood. Thank you. That's all from me.

Thank you, Mr. Hedaya. So it's time that we would like to conclude the consolidated business results and a podcast by 25 Moritz. The final quarter ended December 31st, 2024. Thank you very much indeed for joining today for this part of the business schedule. Thank you so much.