All right. Okay. Hello, everyone, this is Angela Hsu from Citi Taiwan Research. Thank you for joining us today to discuss AirTAC fourth quarter results. We are pleased to have Ivan, CFO of AirTAC, to walk us through fourth quarter results and share recent update with us. So without further ado, I will now turn the call over to Ivan. Ivan, the floor is yours now. Thank you. Okay. Thank you, Angela, and good day, everybody. This is Ivan Tsao from AirTAC, and welcome to join this conference call. Now, let me brief our fourth quarter results and current market situation. First of all, even the overall economy situation is not good, the revenue in the fourth quarter is still, is in line, as I always stated. Even this is better, and in such traditional low season, the order received can continue to be higher than the human numbers, indicating that there is still a certain demand for pneumatic in the market. And in general, the best demand for pneumatic is driven by rising labor cost and declining labor population. Especially for the declining labor population, the number of new birth has been lower than people death for years in China. Young generation don't like to work in the bad environment, even they don't want to work. Customers have to improve automation. Pneumatic industry still can sustain single-digit growth annually once there is no too severe non-climate issues. In addition, pneumatic is replacing simple man power to improve automation, and also has capacity demand and component replacement demand at the same time. Whenever there are production activities, they need to replace pneumatic component on their existing processes. Moreover, AirTAC continue to launch new items to support existing customers, approaching new customers and enjoying multiplied effect. Even the specific industry overall demand is not good, we still can have additional revenue growth from the market share gain, and sustain higher revenue growth than peers. Unreviewed consolidated revenue for the fourth quarter of 2023 was RMB 1,067.2 million, an 18% growth year-on-year. Gross profit was RMB 787 million, an 19% growth year-on-year. Gross margin was 47.1%. Operating income was RMB 490 million, an 18% growth year-on-year. Operating margin was 29.7%. Net non-operating income was RMB 5 million, including RMB 37 million of subsidy from government, RMB 34 million of FX loss, RMB 12 million of interest income, and RMB 11 million of interest expenses. Income before income tax was RMB 495 million, a 24% growth year-on-year. Pre-tax margin was 29.6%. Net profit was RMB 386 million, and 27% growth year-on-year. Net margin was 23.1%. EPS for the fourth quarter of 2023 was TWD 2 5.5. EPS for the whole year of 2023 was TWD 34.83. Revenue from top eight industries for the fourth quarter of 2023, the biggest one still was electronics, around 24% to our consolidated revenue. It's 30% growth year-on-year. Second one, battery was around 11% to revenue, 30% decline. Energy lighting was 9% to revenue, 17% growth. Packaging was around 9% to revenue, 31% growth. Auto was 7%, 7% to revenue, 23% growth. General machinery was around 6% to revenue, 9% growth. Machine tool was 5% to revenue, 18% growth. Textile was around 2% to revenue. It's 94% growth year-on-year. By the way, the proportion of revenue from the aforementioned industries is only for direct customers' revenue. It's excluding nearly around 3% of the monthly revenue from distributors. For current market situation, although there is some noise in the market regarding China recently economic situation, China government has timely proposed global announcement or substantive incentive policies in past couple of months. We expect there could be continuously loosen monetary policies, additional local special bank quota, more bank financing policies, and property policies relaxation. The economy situation should be able to improve quarter-on-quarter. Necessary consumption has been improved currently, and selectively, selective consumption can be repaired. We expect more and more customers will restore their confidence and accelerate their capacity expansion. As for the demand of various industries of pneumatic component in coming quarters, we expect electronics industry demand will stronger than past three years. Not only because of receiving more orders for new spec in the initial stage of the development, but also because China is transitioning or changing its mobile device operating system in past couple of months. Basically, pneumatic supports customers' production process, not in their end product. When the brand customers reduce the sales volume, it won't affect pneumatic demand too much. However, if there is limited spec upgrade or model change, customers can use the existing process to produce product, and it won't, and it don't have to spend new capacity, which will harm the pneumatic demand. And limited spec upgrade and model change for electronics devices had lead to poor demand in past couple years. We expect there could be more new spec upgrade in 2024, can support more demand, stronger demand from electronics in 2024. There has been around 3% growth year-on-year from electronics in fourth quarter of 2023, and we expect it could be better in 2024. Better revenue growth from automotive industry also could be expected in coming years. We have approached commercial auto customers aggressively for more than 10 years, and the progress was limited by three or four years ago. Car sales was not so good from four years ago, and the trade and the commercial auto customers also had the pressure of production cost. It made a pretty good opportunity for AirTAC to support their demand and enjoy better share gain from auto customers. Even the overall auto industry has now recovered significantly, we still have pretty good revenue growth in past three years. Furthermore, due to the higher comparison base and some noise on overexpansion situation, battery industry and energy lighting equipment industry revenue growth rate will be lower in near term. In the past, a common situation in China could be when the government provided high subsidies to a specific industry, usually, attract many existing company and new companies enter in this industry, and, expand production capacities aggressively. After a period of strong demand and followed by overcapacity issue and strong competition, uncompetitive players exit, exit the market, and survivors continue to expand their capacity to support demand again. The battery industry and the energy light industry currently is the stage of digesting overcapacity, and we still believed even current demand was not as strong as it in past couple years, but it still will stronger again. We expect battery demand will better than 2023 in 2024, and enjoy positive growth in 2024. However, the energy lighting equipment have to suffer negative growth in 2024, caused by government control overcapacity expansion intentionally. Current pricing is stable in pneumatic industry, and competition still is limited. The weakness of the Chinese yuan will not affect the competition between AirTAC and Japanese peers, mainly because the cost of materials accounted for about 40%-50% of the cost of goods sold. Most of the pneumatic material costs are metal materials. Japan supposed have not produced too much metal materials, and they have to spend more to buy raw metal materials from foreign suppliers. When the Japanese yen is weaker, they have to spend, they have to spend higher material cost. Even they can benefit from the Japan production's labor cost and overhead. In addition, the production capacity of our major competitors in Japan is just around 40%+. Another 30%+ is in China. The currency impact should be similar to AirTAC. So whenever the Japanese yen is weaker or stronger, it won't affect the competition between AirTAC and Japanese peers. The condition of linear guide could be much severe in possible month, because the weak demand of linear guide and so many peers, they used to decrease their certain price when the demand is weak or from end of the year. Our revenue to third party of linear guide was around RMB 441 million in 2023, and RMB 880 million in 2022. The sales progress is still improving, even the shipment was lower than our expectation in 2023 and 2022, mostly caused by weak demand and peers aggressively pricing. The sales model of linear guide is different from the pneumatic component. Most pneumatic manufacturer have direct account sales, also have distributors business. But most of the linear guide peers sell product through distributors, and most distributors need to purchase a certain quantity each year to become qualified distributors for the following years. When the demand is weak or at the end of the year, many distributors are used to lower their pricing to digest the inventory in order to decrease their inventory level or obtain working capital to purchase additional inventory for the following years. Customers can obtain much cheaper inventory without hurry to change their suppliers to AirTAC, which will indirectly affect our sales progress. We don't want to lower our pricing to get limited additional orders in the weak demand environment or in the fourth quarter of 2023, because we seldom raise certain price after we cut in certain price. Moreover, so many customers have signed annual contract with their existing suppliers in 2023, and they also have promised to transfer some of their orders to AirTAC from 2024. We expect we could have much better shipment in 2024 from Linear Guide business. We have developed around 60% of market product portfolio, including mini size and large types, from type 5 to type 60. Our current annual capacity of L inear Guide is around RMB 2 billion, and will not increase by mid-2025. Current utilization rate of Linear guide is around 40%-50% and will improve it according to our sales progress. The gross margin will be around 40% when we have 60%-70% utilization rate under RMB 2 billion capacity. Gross margin will be around 50% when we have 80%-90% utilization rate. Even 40% gross margin is lower than our existing Pneumatic business, and we use the sales team to do cross-selling, Pneumatic and Linear Guide, and don't have to spend too much additional OpEx. It still can improve our consolidated OP margin when we continue to improve our utilization rate, and the gross margin still can be improved. And, Pneumatic is a short lead time business, and no matter the economy is good or bad, its visibility is only around one month, because the probability of order deliver within one month is higher. We cannot ensure whether the demand for the next quarter will be good or bad, and we can only predict the annual shipment based on our experienced market situation and feedback from our customers. The fourth quarter r evenue of 2023 meets our expectation, and also which confirmed our previous prediction that demand will gradually warm up from the end of 2023. Moreover, the shipment in January 2024 are much higher, or much higher than our expectation, further strengthen our confidence in the full year of 2024. Our current view on market demand in 2024 is more optimistic than before. But after all, the visibility is limited is still pretty short. And we give a very conservative guidance for the whole year of 2024. We expect the overall pneumatic industry could have a growth rate around 0%-5% in 2024. And AirTAC expect we could have more than 10% revenue growth from Pneumatic in 2024. Coupled with the revenue contribution of RMB 800 million from Linear Guides, we provide guidance for the whole year of 2024, as revenue growth rate could be 10% growth. And if we have 10% revenue growth, our OP margin could be more than 30%. CapEx will be around TWD 2 billion-TWD 3 billion in 2024. And we have generate free cash flow and still can improve it. We will increase our pay ratio to 50% in 2024, and also could be better in coming years. And we also don't have any plan to do acquisition in short term. It's my briefing, and should you have any further questions, we can discuss it. Thank you. Thank you very much for the presentation, Ivan. So now we will start the Q&A section. If you wish to ask questions, please use the raise hand button. We will call your name, and then you can unmute yourself. And would appreciate if you can state your name and also the company's name before asking questions. We got a question from Hank from KGI. Please go ahead. Greetings. This is Hank from KGI Life. Thank you for taking my questions. And, my first question is that, how do we achieve gross margin expansion, in the fourth quarter, even we see a more serious price competition in linear guide sector? Linear guide just low single- digit to our revenue, and most of our revenue contribution still came from Pneumatics. We continue to improve our. We still increase our high-margin new items. And with more, then we can improve our margin. And we also continue to improve our production efficiency. So basically, we still can sustain slightly higher gross margin in fourth quarter of 2023, even it still could be higher in 2024. Thank you. Okay. So, if Hank have no more questions, can I ask a few from my end, Ivan? Yes, please. Yeah. On the OpEx, for fourth quarter, it still looks a bit higher versus, like, prior quarters. I recall in the last earnings call, you noted, third quarter OpEx was higher because of the salary increase. So I wonder if the higher OpEx in fourth quarter is also associated with the salary increase, like it was in third quarter. Once based on the renminbi currency, the OpEx in third quarter and fourth quarter could be similar. And, we spent a little higher on these business in fourth quarter than third quarter. So basically, disregarding the FX result, our CapEx, our OpEx in third quarter and fourth quarter have not changed too much. Got it. So the higher is mainly because of the FX, volatility? Yes. Basically, yes. I see. Okay. And for the energy lighting, it looks a bit concerning to us because of the sharp deceleration in fourth quarter. So possible to share with us, based on your observation, what caused that, and also how do you think the outlook of the industry in 2024? Yes. Basically, China have suffered overcapacity on battery industry in 2023. And as we know, some of the government have asked, banks cannot support all of the energy lighting industry's expansion in the past 2-3 months. Maybe it's not good for short- to mid-term, but it's good for long, mid- to long-term, because they can expand their energy lighting capacity smoothly or on track. And maybe the risk to suffer the overcapacity in energy lighting won't be too high as it is in battery industry. So basically, maybe the revenue growth of energy light industry will be negative, maybe by 10% or 15% in the whole year of 2024. And it won't be battery decreased 30% in 2023 in coming years. So we still will find some demand, or find some demand from other industries to support our revenue growth in the whole year of 2024, and dilute the impact from weak demand of energy lighting industry. Got it. Thank you, Ivan. Our next question come from the Yuichiro Isayama from Goldman Sachs, please. Thank you so much, Angela. Can you hear me, Ivan? Yes, please. Hi, how are you? Hi, everyone. Good. This is Yuichiro Isayama from GS. Two quick question. It's a bit repetitive one on Q4 GPM and also 2024 GPM. Can you elaborate once again, the margin improvement into Q4 is attributed to the UTR, or is it more simply cost reduction measure or the better pricing? I was wondering if that could be sustainable into 2024 as well. Appreciate if you could elaborate your impression that where the margin improvement into 2024 can come from. Thank you. Yes, basically, we, I mentioned earlier, we continue to launch more new items. All of those new items could be higher margin items, and we launch more, sell more, can improve our selling product mix and improve our gross margin. And the utilization rate of L inear Guide maybe is a little lower in fourth quarter than third quarter, but we expect we still could have doubled. We could double our linear guide shipment in 2024, and the utilization rate could be much better in 2024 than 2023. Also can improve our gross margin. And once we have a better utilization rate, also have better shipment for the whole year 2024, the leverage of OpEx still could be better to support our OP margin to recover, to be more than 30% in 2024. Ivan, I'm sorry. Can you comment the same thing about Pneumatics utilization in Ningbo? Is that continuing to get better from Q3 to Q4, and do you expect further improvement into Q1 and through 2024? Utilization still depends on the shipment, and Q4 used to be a little lower than Q3 by pneumatic product. Utilization rate in Q4 could be lower than Q3 from Pneumatic. And L inear Guide is, it could be similar or a little lower in Q4 than Q3. But what could improve our gross margin in Q4 of 2023? Mostly because the selling product mix improvement, and we also improve our production efficiency. Got it. Thank you so much. The last question I have is regarding 2024 pricing outlook. Yes, I totally understand what you mentioned regarding how the pricing have been stable in pneumatics market, but given the overcapacity in China generally, and intensifying competition, I think a lot of people are starting to get concerned about the pricing outlook. So can you elaborate on your impression about the pricing outlook? And if there is any risk, how would you reduce the downside risk from that? I appreciate if you can elaborate your pricing strategy for 2024. Yes, basically, we still keep strong pricing, because in past, whenever the demand is stronger or weaker, and the production cost matters, the cost is raised, we always keep stable pricing. So basically, we are not as other peers to change their pricing frequently. And we still expect pricing for pneumatics still could be reasonable in 2024. And pricing for linear guide still depends on the overall demand. Even in fourth quarter, so many peers, they decreased their selling price, but we still keep low, stable pricing. Because when the demand is weak, even players decrease in price, and they just can get limited additional orders from the market. And once we decrease our selling price, it will affect our Linear Guide business in coming 10 years, even one to two decades. We have not decreased in price in fourth quarter. We also have lower our shipment in past one to two months. And we expect the overall demand not just will improve from pneumatic industry. The pneumatic industry still can be better in 2024 than 2023. Peers, maybe they will raise their same price, but AirTAC still will keep stable pricing. And we expect we could have much better shipment from L inear Guide in 2024, then can improve our utilization rate, also can improve our margins. Thank you so much. Very much clear. Thank you. Thank you. We have next question from Ming Lee. Thanks. Thank you, Ivan. Hi, good afternoon. So, my question is for your industry exposure. So, in your guidance, you expect your largest sector, consumer electronics, is expected to post a stronger growth. I want to understand, is this more because of the replacement demand? Because the sector has been weak since 2021. So, because pneumatic component is a consumable product, so you expect a stronger replacement demand, or you are seeing some new application in certain industry? Yeah, that's my first question. Thank you, Ivan. Yes, I mean, basically, not just for replacement demand, and we still expect there could be more new spec launched in 2024. And from October or November of 2023, we have received more initial development orders, and maybe it could mean those initial spec or spec to enter in mass production in 2024 will be higher than 2023. And once customers, they have more new spec, they had to expand their capacity aggressively. So basically, not just for replacement demand from electronics, also could be more new spec upgrade or new spec launched in 2024 to support electronics better demand. Yeah. Thank, thank you, Ivan. My second question is related to battery industry. So, in the past quarter, batteries demand is still relatively weak. But, your outlook for battery industry in 2024, you still expect some low growth? So, in what area do you expect the growth? For example, is it more like a restocking demand, or you still see some clients are expanding their battery capacity? Thank you. Yes. Basically, we have around 30% decline in battery industry in 2023. As we know, some of customers, they told AirTAC, maybe they will increase little new capacity expansion in 2024, and such demand will be higher than 2023. In addition, the replacement cycle in battery customers could be a little shorter than other industries, and we still expect more replacement demand from battery in 2024 can support the industry growth. We still try to get more shares from the market. So basically, we suffer pretty high revenue decline in battery industry in 2023, and we expect it could be flat-ish or single-digit growth in 2024. It could be better than 2023. Okay. Thank you, Ivan. That's all my question. Thank you. Thank you. Next, we have Kenny Chen. Please go ahead. Thank you. Thank you for taking my question, Ivan. I just have two questions. The first one is regarding the two new products to be launched going forward. I'm wondering, could you please elaborate more about how they will contribute to sales in 2024 or 2025? Or, if it's too early, could you share if their margins or entry barriers are higher than your existing products? Basically, pneumatic is the mature industry, mature product for more than 100 years, and there's still so many items AirTAC have not developed and launched. So basically, SMC Festo, they have more than 600,000, even 700,000 items. AirTAC currently just has around 220,000- 230,000 items. Most of the items AirTAC have not developed could be high-margin items. So we still will continue to launch, to launch high-margin items in coming years. And the high-margin items, gross margin could be more than 60%-70%. And we still can improve our selling product mix, but it's very difficult to identify which item can enjoy what gross margin, because the pricing depends on different customers different items. We just can say, the new items we're going to launch, most of them could be more than 60%-70% gross margin items. It can improve our selling product mix in coming years. Thank you. That's very fair, helpful. The other one is regarding sales by region. You talked about raising the non-China sales contribution in coming years. I'm wondering if you have any year-on-year growth rate target for this or next year? Firstly, we have divided our system to China team and non-China system. The team leaders are totally different. Each of them have to do their best, and they also have different expectations from our headquarters. Non-China system, they still have to improve their revenue percentage to be around 20% of our consolidated revenue. Even it's very hard task, because our China system still, still do a pretty good job. But non-China system still have to improve it. It also could be very difficult to say the percentage, but in past three years, the revenue growth rate from non-China business had been higher than China revenue growth rate. The percentage to our revenue still can be improved from non-China business. Especially for Europe and North America, we still have a pretty huge addressable market, and we still will continue to recruit more local sales people to approach more customers. So basically, the revenue growth rate from those two areas could be more than 20%+ in 2023. And it still could be higher than this number in 2024, because we have recruit more sales people in 2023. And after they familiar to our operation or our product, the contribution could be better and better in coming years. Thank you. Very appreciate it. Thank you. Thank you. Thank you, Ivan. Ivan, I have a quick follow-up. For the high- margin product you mentioned, do you have, like, a rough idea for the end market exposure for those high margin products? Are they, like, mostly associated with certain industry, such as, like, electronics or other industries? Basically, a single spec or SKU, maybe not just can support specific industry. It can support so many industries. So mostly, it could be electronics, application, battery, auto demand. But we just based on what kind of items AirTAC had not produced and sell, the market size is bigger, demand is urgent, and we used to pass those items and develop that in first priority. Got it. Okay. All right. The next, we have a question from Hank at KGI. Please go ahead. Thanks for taking my questions. My first question is that, as we mentioned, that we read RMB 440 million linear guide revenue in 2023. Do we expect this to double to, like, RMB 880 million in 2024? The number RMB 800 million for the whole year of 2024, maybe not RMB 880 million, but we still can improve it. But basically, we just give the numbers, RMB 800 million of the whole year in 2024 Linear Guide. Understood. Very clear. My second question is that, given the current circumstances, do we see a better, or you can say higher- GPM sector that could further contribute to the GPM expansion in this year? Like, you mentioned, in auto and electronics, we will see more new product launch and new spec launch. So is it safe to assume that, in these two sectors, if we see higher growth, the growth margin will be more positive this way? I just say, specific SKU or items not just can support specific industry. It could be support so many industry from specific SKU. And we also ask our sales team or marketing team to find what kind of items they have not developed or produced, the market size, bigger demand is urgent. We will test those items and develop them in first product. And we not just focus on electronics or auto industry. Any other application still can be developed by AirTAC, just depends on the market size, big or not, demand is urgent or not. Understood. Thank you for your clarification. I have no further questions. Thank you, Hank. Ivan, I have a quick follow-up. So for the linear guide, RMB 800 million for 2024. What's the target utilization of linear guide for 2024? Can you, like, elaborate, maybe in first half and second half, what's our target utility for that? And what would be the potential gross margin for this product? Utilization, utilization rate still depends on the shipment. So basically, once we have RMB 800 million revenue to third party, and we still expect our internal demand to support high-end numerical cylinder, still could be RMB 200 million-RMB 300 million. And once we have RMB 800 million to third party, we still have to improve, improve or increase our inventory level of Linear Guide. So basically, we expect we could have around 60% utilization rate average for the whole year of 2024. Then we could have high 30%-40% gross margin from linear guide in 2024. Got it. That's very clear. Thank you, Ivan. Next, we have a question from Sheng- Yuan Cheng. Please go. Yeah. Hi, Ivan, this is Sheng from Daiwa Capital Markets. First of all, congrats on a good results, especially when the industry is actually in a down cycle. I have a really quick question on the first quarter. I know the lead time was, like, really short, but when I look at when the demand started picking up, for the most of the first quarter, the seasonality actually was in the sequential growth rate. I wonder if you could provide us some color, if you may. Thank you. Firstly, we still didn't see, we still didn't give the quarterly numbers to the market, because the short-term improvement. And we just can say, we heard from the market or government, they want to push the GDP number of the first quarter of 2024. And such information can be confirmed by the shipment in January of 2024, because the daily shipment could be pretty strong month- to- date, even much better, much higher than our expectation. And the order book still higher than shipment, even the shipment is such strong. So basically, we could be pretty optimistic of the demand in first quarter of 2024. And it's 31st to date, and we can say we have pretty good monthly revenue of this January, and we will re-release it on next Monday. Thank you. Thank you, Ivan. Very clear. Thank you. Ivan, I have a quick follow-up. So, when you say monthly January sales looks very pretty good, can you share a bit more color on, like, how's the daily shipment in January look like? Is it improving from December, or it's just being, like, stable? It's much better than fourth quarter of 2024. Oh, got it. Yeah. Got it. Not just better than December— December. November of 2024. Sorry. Yes— Not just, not just better than December or November of 2023. I see. Do you see any, like, specific driver from, like, any industry? I have not kept that revenue growth rate for each industry. Okay, that's fine. Thank you. Next, let's see if Ming Lee, do you still have questions? I still see you have the raise hand button. Okay. No. No, I don't have question. Thank you. Okay. Enjoy. No, no worries. Sheng, do you still have questions? No. Uh— Oh, no worry. Yeah. No worries. No, no worries. Next, we have Jody. Please go ahead. Hi, Ivan, can you hear me? Yes, please. Yeah, thank you very much for the sharing. Just a quick question regarding the January good daily shipment we see. Do you think that's relevant to the Chinese New Year timing this year? Or, even if you have considered that, it's still better than your expectation. Thank you. Yes, in past experience, once the order demand was weak, even there's Chinese holidays in February, customers don't have to rush orders in January. So basically, we believe most of the rush orders in this January could be the real demand for the market. That's helpful. Thank you very much. My second question is regarding your linear guide. So we have the target of RMB 800 million. And given it seems that at least in fourth quarter, the demand is still quite low, how do you think we can, like, almost double the revenue this year? Can you just elaborate a bit more about your strategy? Thank you. Yes, basically, our sales progress was limited, or restricted, in 2022 because of strict COVID control. And from February or March of 2023, some of the customers just allow AirTAC to visit them gradually. So the real, or real sales, typically to customers, maybe just around six to seven months in 2023. And we continue to convince more customers AirTAC linear guide is good enough, even we missed their expectation in 2020. So basically, we still could be cheaper pricing than peers, and good product quality, even better product quality. We also have shorter time than peers. In a month, customers can get their demand. So basically, even we have missed our expectation in 2023, but we still expect we could double our shipment in 2024. That's great. Thank you. My, my last question is regarding energy lighting. So I think based on previous communication, I understand that this segment would—h as, like, LED and maybe some solar inside. I just wonder if it's possible to let us know the rough breakdown, maybe between LED and solar within energy lighting. Appreciate it. Thank you. Maybe 50/50, but some customers, they manufactured both of those two products. And we tell them to ask customers to provide the information. They, for example, they buy 100 pieces new from AirTAC, how many pieces they spend on energy, spend on LED lighting, or what's the pieces they apply on the solar related? Ah, I see. So it's selling like similar products to same clients? Yes, basically. It's pretty similar to battery customers. So many battery customers, they manufacture, EV battery, portable device battery in the same time. Okay, got it. Thank you very much. Thank you, Jody. Oh, we have the follow-up question from Jeremy. Please go ahead. Hey. Hi, Ivan, this is Jeremy from SMBC. Just wanted your quick opinion about something. So I understand that your daily average shipment in January seems quite robust. And we also did hear that China is trying to encourage the manufacturing sector to, I guess, have a good start to the year. So there were a lot of front loading of government bonds in the last quarter of last year, et cetera. And I think when you look at the efforts by the local government, it seems very—t hey seem very busy. But if you look at China's PMI data today, actually, the numbers were not that strong, right? So I just wanted to understand your perspective from a manufacturing-manufacturer standpoint, how do you read this thing? I mean, is this just front loading, and then you have to wait and see how the economy responds? Or is this, you know, really, you think that it's gonna be a start of a very strong fiscal stimulus in China this year? I appreciate your thoughts. Thank you. No problem. That's the, pneumatic just replaced human beings direction. So even customers, they don't want to increase additional capacity, but they still have to improve existing capacity to be better automated, because the rising number of costs, declining population, and young people don't want to work. So PMI, GDP, it's never been a very good index to limit demand. In addition, AirTAC still continue to get shares, enjoy share gain from the market. Even space industry demand is not good, we still can go through share gain to support AirTAC revenue growth from space industry. So basically, it's too abnormal, strong demand in first half of 2021. It could be more than 15%, even around 20% for the industry growth in 2021, in first half 2021. Maybe most of the customers' capacity expansion had been down in first half 2021, so it dilute the demand in the following two to three years. We expect, even we believe, such dilution have been completed. Customers still have to improve automation, have to replace pneumatic component on their existing process. Such reasons can support the better demand in 2024 than past 2 years. I see. That's very helpful. Sorry, just one small question. Are you planning any capacity increases this year for the Pneumatic side of the business? Pneumatic still will increase a little capacity in 2024, and we will not increase any capacity on Linear Guide in 2024. Okay, understand. Thank you. Our CapEx number in 2024 still could be TWD 2 billion-TWD 3 billion. Mostly could be improving our internal automation efficiency. Okay, understand. Thank you. My pleasure. Thank you, Jeremy. Due to the time constraint, we will have the final question from Kenny. Please go ahead. Yeah, thanks, Angela. Sorry, Ivan, pardon me. I just want to confirm, what's the fourth quarter utilization rate for Pneumatic, and what's your thought for first quarter except for Chinese New Year? Do you see any necessary to work OT? And, what's the DOI for fourth quarter, and what's your plan for 2024? Thanks. Okay. Basically, Pneumatic production utilization rate is just around 90% in October or November, and we have improved from mid-December of 2023. Current utilization rate could be around 100% for Pneumatic. And the shipment of Linear Guide still not very good, so the utilization rate in fourth quarter of 2023 just around 40%+. And utilization rate still depends on the shipment and the market situation, but we predict. So basically, in January, the utilization rate of Pneumatic still can be improved to be a little higher than 100%, but Linear Guides still will be kept on 40%-50%. And I mentioned, once we have RMB 800 million revenue of Linear Guide in 2024, and RMB 200 million-RMB 300 million for internal demand, increase a little inventory level of Linear Guide. The average utilization rate in 2024 could be around 60%. Then we could have around high 30%-40% gross margin Linear Guide business. Pneumatic, the peak season used to be in second quarter. So, after Chinese New Year holidays, the utilization rate could be around 110% and consistently to July. And after July, depends on the shipment and market situation, decrease a little to be around 100% or 90% in later third quarter. And from every December, we still will increase utilization rate to be around 90%+ and 100%, to build up little inventory to support peak season demand in next year. This February or Chinese New Year holidays, currently, we don't have any plan to ask our operator to overtime in holidays, because our inventory level still pretty healthy, even on Pneumatic business or Linear Guide business. Basically, we have 11 days holidays in this Chinese New holiday in China, and seven days in Taiwan factories. All right. Thank you. Thank you, Ivan, and thank you, Kenny, for the question. This concludes today's conference call. Thank you for your participation, and you may disconnect now. Thank you, Ivan. Thank you, Angela, and thank you, everybody. Have a good day.