[Non-English content] Q1 2567 [Non-English content]. A very good morning to all investors. May I introduce our top executives of Delta Electronics Thailand who join the virtual session with us today. Firstly, Mr. Victor Cheng, Chief Executive Officer of Delta Electronics Thailand. Secondly, Miss Nipaporn Jiarajareevong, Chief Financial Officer. My name is Anchalee Jieratham from Investor Relations. [Non-English content] I would like to pass on to Mr. Victor Cheng to begin the presentation today. Good morning. This is Victor Cheng with Delta Electronics (Thailand). First of all, welcome to this investor session, and let me start with the executive summary. We achieved a robust and very good financial and operating result over the third quarter of 2024, and surpasses consensus on earnings and revenue, mostly driven by strong momentum of our core business related to data center. EV sales obviously has seen some slowdown after a soft start at beginning of 2024. Comparing to Q3 2024 and Q3 2023, in US dollar terms, year-over-year growth was eight percent for sales revenue and 8.6% growth for gross profit and 8.7% for net profit. Given the convergence of trend across digital infrastructure, technology, and mostly related to AI application and also energy sector, the Data Center industry is rapidly evolving with the surge in power density and the energy efficiency requirement, along with carbon intensity concerns to support the AI transformation. Some of the promising outlook for Delta's Data Center related business mainly is driven by AI demand from telecom and global Data Center operators with new facility around the world and also strong investment in SEA region. Delta is well positioned to support a resilient back backbone to build this future-proof infrastructure. Global economic growth projected for 2025 has been upwardly revised to 3.3%. While economic activity in Q3 2024 has picked up in some regions, particularly in Asia and part of Europe, inflation remains a little bit high, but the current status is easing a little bit in most part of the world. In terms of our business outlook for this market, we see global trend in industrial automation, data center, and EV infrastructure continue to drive economic growth. In Southeast Asia, data center market is expected to grow from $10.2 billion in 2023 to about $77 billion by 2029, driven partly by increased demand for cloud computing and mostly AI services. In Thailand, economy is projected to grow 2.6% in 2024. According to Deloitte Thailand Economic Outlook Q3 of 2024 report, global economic growth projection for 2025 has been upwardly revised to about 3.3%, a modest but healthy growth. Economic activities pick up in some regions, particularly in Asia and part of Europe. Persistent inflation is still a concern, although at current status looking to ease in most part of the world. Business are facing uncertainty. One of the major factor is tight 2024 U.S. election race, and this very polarized policy promises, making it difficult to plan and invest confidently. However, we remain cautiously optimistic. Company believes its focus on sustainable solutions, advanced power management solution products, and diversified business channel which will drive healthy growth and resilience regardless of these U.S. election outcome. To highlight a few regional business outlook in Thailand, industrial automation driven by growth in manufacturing sector remains strong, with Q3 2024 revenue up 32% year-over-year and 8% quarter-over-quarter. Both distribution channels and direct sales saw good growth. In terms of ICT business for Q3 of this year, we have seen the result exceeding budget and continued healthy performance from Q2 2024. Delta has received new demand from telecom and global data center operators' order with new facility in the region, especially in power and also liquid cooling solution, which are all fairly new for AI application. In India market, India's outlook remains strong, driven by significant order across telecom, data center, and infrastructure projects. Expansion in EV infrastructure also progresses healthily with new supply agreements and strategic partnership established. In Q3 of 2024, revenue grew by 11.6% quarter-over-quarter and 54.3% year-over-year. Our momentum in key segment is expected to position us well for sustained growth in the coming quarters. For Southeast Asia, Australia, and New Zealand market, the outlook remain optimistic in Australia, a main market there, driven by continued expansion in Western Australia, with strategic partnership. Introduction of our high-power HPC 350 kW EV chargers position Delta to capitalize on the rapidly growing EV infrastructure market. In Australia, we see a 143% revenue increase in Q3 of 2024 from Q2 of the same year, largely supported by higher data center demand in the market. For our European market, our Delta Europe automotive business sees revenue growth in Q3 2024 compared to the previous quarter by about 13%. This is in sync with Delta's Thailand production capacity expansion in a continuous manner. New product launches and newly added OEM vehicle platform will further increase the overall demand for the remainder of 2024. Most of Delta's automotive products are designed for mid-class and luxury class BEV and PHEV. It's more of a premium European lineup and less successful for the price-cutting lower-end market. To name a few award and recognitions in Thailand, we have been included in the FTSE4Good Index in the June 2024 review, and this is the seventh year recognized by this organization. We received IAA award in 2024 for excellence in governance and leadership, received outstanding CEO, outstanding CFO, and outstanding Investor Relations award. Next page. Operational Development. Delta Thailand and DIPROM empower Thailand startup with Angel Fund. This is the ninth year for the event. We continue to select new startups and award them with prize money. This year, THB 5 million in total to 10 companies, and we participate in this award with DIPROM to emphasize our focus and important view on this activity to stimulate startup businesses in Thailand. We continue to invest in human resources development. We have a long-term relationship with seven universities, top technical universities in Thailand. In September, we awarded certifications to over 1,000 students, where 200 attending in person. This is for Automation Academy. We invest over $30 million this year to establish labs at seven universities equipped with sort of state-of-the-art Power Electronics equipment to enable the students to be able to use the latest technical setup and equipment in the industry. We project to see this industry reach over $670 million market value by 2030. Next page. We also continue the Automation Academy this year to help the students to build this expertise in this area. In July, we participate in the Thailand Electronics Circuit Asia 2024, also known as THECA 2024 to highlight our intelligent automation solution for PCB assembly industry. Key technologies showcased include Digital Twin Machine Platform, RTM/iRTM, VTScada SCADA system, and the IoT machine connectivity for smart manufacturing. Our industrial automation solutions, such as DIAWorks, manufacturing execution system for PCB production, and its energy management system are designed to improve efficiency, quality control, and also save energy for our PCB manufacturers or other industries. We launch our new energy storage solution at ASEAN Sustainable Energy Week 2024. In July of this year, we unveiled our Delta Lithium-ion battery container solution at ASEAN Sustainable Energy Week 2024. This held at the Queen Sirikit National Convention Center. The new energy storage system, housing in a 10-foot container offer very flexible capacity from 700 kWh to 7.7 MWh supporting grid and EV charging infrastructure when application requires. Other integrated solutions showcased include AC and DC charger, PV inverters, and energy management system. Key product features were the DC Wallbox, which is a 50 kW unit with a 96% efficiency, and also ultra-fast charger, which is a 200 kW charger with dynamic energy management and also AC MAX 2 kW charger for business and home use. For operational development in production concerning Q3 2024, Delta Thailand plants achieve a production revenue growth of close to 7.9% increase from Q2 2024. This growth was mainly driven by higher demand for AI-related GPU production and also increased power output for several major customers. Delta installed over 100 new machines and added many operators across key operations. Delta India's facility in Rudrapur, Gurgaon, and Krishnagiri achieve a total of 66% production target. We set a very aggressive target for our India operation. Although achievement rate is 66%, but growth rate continue to be in the high 50%. Financial highlight. CFO. [Non-English content] [Non-English content] The first question is about the outlook that we are seeing for the fourth quarter of this year. How are we projecting it to be and the full year for 2024, are we expecting much better performance than 2023? What are some of the figures and highlights that we could add on? We see Q4 business generally in a fairly healthy state. We have continued to see, especially on the data center segment, things are strong. Data center, whether it's cloud or whether it's colocation, continue to expand capacity. We expect that part of our business to be healthy and strong. EV side of the market is still relatively soft. As some of you may know, we sell our EV components or systems based on a hub operation. Meaning that, we ship the products to local hubs and customer draw, and it accounts as sales. This does introduce some uncertainties as we continue to output, but we don't necessarily see all the sales being realized due to this hub operation. From what we can see is that sales is modest. It's not declining, but it's not increasing aggressively. Hopefully, Q4 sales for EV or PHEV will continue to grow well in the worldwide market. To be frank, it is somewhat soft at this point, and we'll probably still see some softness into next year. Overall Delta Thailand for- Overall Delta Thailand for the full year, we believe we are going to be for sure growth. Perhaps the double-digit growth is the target that we have stated previously, and we're hoping to achieve that, but it will be very close and challenging. [Non-English content] For this question is related to our investment and CapEx for next year as well as some of the ongoing and additional investment this year that we have prepared to fuel the growth for the next year. What are some of the main items that we can elaborate? Yeah. Capital investment in terms of production automation will continue. We still invest quite heavily to automate our production lines. In particular, EV related productions are basically required to be automated. Much of the investment will go into our EV related product production equipment. But in our power, in our component such as thermal solutions, we continue to invest a considerable amount of money to try to automate our lines as much as possible. Investment in this year, we projected to be around $300 million + perhaps a 10% buffer there. Next year, we probably will invest a similar amount of capital to reach our automation target. Besides the automation, would you like to also highlight on some of the ongoing construction that we are having in Thailand? Sure, sure. The other big-ticket item is the new manufacturing buildings. We have two new buildings in our Wellgrow industrial estate. We call Wellgrow 3 and Wellgrow 4. This should be completed by Q2 at the latest Q3 of next year. There will be some financial outlays for building these two new manufacturing facilities. Following on that of course will be equipment to come in and get ready for more manufacturing of products. At the same time, we are also building two facilities in our Bangpoo Industrial Estate area, and it will be most likely finish in Q2 or Q3 timeframe of 2026. In the meantime, there will be some cash outlay to facilitate the building completion of these two new facilities. [Non-English content] The latest question, what is the management view on our growth prospect in the medium term? What is the sort of average, cumulative annual growth rate? What are the supporting factors to drive that long term rate? Okay. Our target we have stated previously is try to achieve a double-digit growth year-over-year. The main driver that we target at this point, of course, power being power-related products and solutions still being our main cash generation items. In these following years, we've seen power requirement getting larger and larger due to this AI development. We believe there will be still a robust growth in the power-related segments. EV although at this point is going through a slow cycle, but we have seen our customers coming with different solutions. For example, plug-in hybrid EVs to address the drivers' concern of, you know, charging availability. Although right now we see this cycle probably will last a year, a little bit more. In the long term, we believe to address the lower emission, especially from government regulation, car companies will continue to launch new EVs and this cycle of growth will eventually resume. Then due to some of the geopolitical pressure, we still see production being redistributed across the world. A lot of that is coming to Southeast Asia. Some of it goes to India, Eastern Europe and also United States. We also look at this trend as sort of a long-term impetus to have more productions coming into Thailand. In terms of us, power EV, thermal solutions, we're also seeing components and infrastructure such as charging stations and energy storage related products coming to Delta Electronics Thailand. The prospect definitely is still very positive. Year-over-year, of course, we have many issues that we need to watch out and manage and continue to invest in technology, continue to invest in capacity preparation so that in case we do see the end of this, some of the down cycles, we have the capability to meet the increasing demand. This question is related to overall electronics industry. What is the outlook for Thailand? Is there any signs of recovery or the growth outlook in the next period? Yeah, as I just mentioned that, the manufacturing environment or ecosystem is developing toward more distributed arrangement. Many electronics or whatever car manufacturers are coming to Thailand. This trend just started roughly, you know, after COVID when people are more free to move. We're seeing the investment number announced by BOI has increased quite significantly over, you know, during this year, same period compared to last year. These manufacturers, as they announce investment, it will take a year or slightly more to get their manufacturing set up ready for production. From what we have seen and learned is that these are all ongoing. We have not seen the real economic impact being realized at this moment. In next year, we definitely will see some tangible impact. Delta is also targeting to attract our supply chain to come to Thailand so that we get local manufacturing support. First is probably a hub operation, and second is actual manufacturing. These are happening gradually. Definitely, I think, there's a lot of activities. We've seen many PCB makers coming to Thailand, but there are many other electromechanical, mechanical and end product manufacturers move over to this part of the world. So that's, I think, the overall trend which will benefit this region, Thailand being one of the major manufacturing hub as well. [Non-English content]