Let me pass to Mr. Ivan Tsao, the CFO of AirTAC, for opening remarks. Okay. Thank you, Ellie. Good day, everybody. This is Ivan Tsao speaking from AirTAC, welcome to join this conference call. Please let me brief our first quarter result and current market situation. First of all, pneumatic demand have entered a recover cycle, we expect this upcycle could sustain longer than two-three years. Both revenue and order book amount have exceed our expectation since the beginning of the year. Pneumatic component are replacing human beings' actions, the industry can sustain single-digit growth annually once there is no too severe non-recurring issue. By continuously developing new product and improving our brand image, we expect our annual revenue growth rate could be 10% higher than industry growth rate. As pneumatic products support production line rather than the end product, as long as customers launch new models or engage in production activities, there will be a better demand for pneumatic. In addition, recently geopolitical impact on raw material cost remain in the company's control. Through ongoing improvement in internal production efficiency and production and product sales mix, the operating profit margin this quarter continues to rise compared to the past couple years. Un-approved consolidated revenue for the first quarter of 2026 was RMB 2 billion 192 million, a 32% growth year-on-year. Gross profit was RMB 1 billion 52 million, a 33% growth year-on-year. Gross margin was 48.0%. Operating income was RMB 728 million, a 45% growth year-on-year. Operating margin was 33.2%. Net non-operating income was RMB 22 million, including RMB 14 million subsidy from government, RMB 5 million of FX gain, and RMB 4 million of interest income. Income before income tax was RMB 750 million, a 37% growth year-on-year. Pre-tax margin was 34.2%. Net profit was RMB 585 million, a 36% growth year-on-year. Net margin was 26.7%. EPS for the first quarter of 2026 was TWD 13.35. Revenue for top eight industry for the first quarter of 2026, the biggest one was electronics, around 26% to our consolidated revenue. It's 20% growth year-on-year. Second one, battery was around 20% to revenue, 85% growth year-on-year. Auto was 9% to revenue, 15% growth. Packaging was around 7% to revenue, 10% growth. Machine tool was 7% to revenue, 20% growth. General machinery was around 5% to revenue, 32% growth. Textile, 5% to revenue, 22% growth. Energy lighting was around 3% to revenue. It's 2% decline year-over-year. For current market situation, more and more customers are showing positive views on future demand. China government continues to release many stimulus policies and attempt to restore the confidence of people or enterprises. Some of them have improved their confidence and increased their end product consumption or capacity expansion. As for the demand of various industry for pneumatic, the revenue of the electronics industry grew by 20% in first quarter of 2026. It's better than our expectation. Many customers say there could be a good year for electronics in 2026 because there could be launch more new models and spec upgrade in the year. We expect we could have double-digit revenue growth from electronics customers. For battery demand, government has announced its development guidance for EV and battery industry, and customers expand their domestic capacity. In addition, more countries have relaxed their restriction policies on Chinese players, and those players plan to extend their overseas capacity. It could be double-digit revenue growth from battery in 2026. Better revenue growth from auto industry also could be expected in 2026. We have improved our brand image on auto customers and enjoy better share gain. Even the overall auto industry had not recovered significantly, we have had double-digit revenue growth from auto for years. We expect double-digit revenue growth in 2026 from auto customers. Government stimulus process for replacing old equipment to be new equipment can get subsidy from government still in the market. Those traditional demand like machine tool, drill machinery, textile or packaging customers can enjoy positive growth. We have some demand issues on solar or energy lighting in 2025. The government has recently taken a action to coordinate the over capacity issue. We expect solar or energy lighting demand can be positive growth in 2026. Selected items for selected customers have priced in competition in pneumatic market, but it's still rational, basically. We have increased the selling price in our overseas market, but maintain stable pricing in the China market to improve our customers' relationship and accelerate revenue from those various new business or new products. In addition, we need to comprehensively consider revenue growth, pricing strategy, OP margin, and market share rather than just pursuing high-speed revenue growth. The increasing material cost still can be offset by our internal efficiency improvements. OP margin still have to depends on revenue scale and capacity utilization rate. Even we can improve our margins by launching more higher gross margin new items, improving our selling product mix, and continue to improve internal efficiency to reduce production cost. We define a 100% capacity utilization rate based on working 24 days a month and 21 hours a day with two- shift work operator working system. Current pneumatic capacity utilization rate is higher than 100%. For the development of the linear guide, despite the overall weak demand and peers' aggressive pricing in 2025, our shipment volume growth still could be around 20% in 2025. We also have a 20% revenue growth in first quarter of 2026. We have increased our capacity utilization rate from over 20% last year to over 30% since the beginning of this year, and expecting to reach 50% by end of the year. When we have 20% to 30% utilization rate, gross margin of linear guide is teens percent, and 50% utilization rate gross margin is around 30%. 80% utilization rate gross margin could be around 40%. Even 40% gross margin is lower than our existing pneumatic business, and we use the same sales team to do cross-selling pneumatic and linear guide without too much additional OPEX. It still can improve our consolidated OP margin. Our product quality is better than our Taiwanese peers, and our pricing is lower than theirs. We missed customer expansion in 2020. Our current sales strategy is to enhance our brand image and just compete with Taiwanese and Japanese peers. After have a good enough brand image within one to two years, we will design additional spec or SKU to reduce production cost and sell and selling price to compete with local China players, continuously improve our utilization rate, enjoy better fixed cost leverage, and implement another aggressive pricing to compete with all peers. When the utilization rate exceeds 90%, we will consider changing the current two-shift operator working system to three-shift and increase our equipment working hours also can enjoy better fixed cost leverage. This will give us the opportunity to implement more aggressive pricing strategy further to compete with all the peers and accelerate our market share in linear guide market. We still expect we could have around RMB 3 billion revenue from linear guide in around 10 years. For the development of supporting semiconductors business, based on our strategy, we have not developed product to meet semi customers demand by end of 2024. Due to those product can enjoy higher gross margin and China government have localized policies, we began to develop semi items from early of 2025 and scheduled to launch them gradually from 2027. Current development progress is better than our expected. We can gradually launch some items from second half of 2026. Based on past experience, it usually takes around one year for new product to have a better revenue contribution. It could be in second half of 2027 or early of 2028 we could have higher revenue contribution from semi customers. We expect pneumatic industry can return to low single-digit growth in 2026, and we can have at least 10% revenue growth from pneumatic products, plus the revenue contribution of linear guide and electrical controller product. The shipment in first quarter exceeds our expectations and remain pretty strong in this April. Even though we are optimistic about the market demand in 2026, due to the short delivery time in pneumatic industry, we still prefer to provide our guidance for 2026 based on a conservative principle. We'll adjust them upwards with the next quarter's operating results. We raised our guidance for 2026 to achieve a revenue growth of mid-teens to high-teens percent and OP margin of 33% for the whole year. We have generated free cash flow for years and also have increased our cash dividend payout from 35% in 2021 to 55% in 2025. It will be 65% in 2026. Still could be better or higher in coming years. It's my briefing. Should you have any further questions, we can discuss it. Thank you. Okay. Thank you, Ivan. Now, let's start the Q&A session. I already see several hands up. Let's start with Ming. Ming, please go ahead. Hi. Thank you, Ellie. Congrat, Ivan, for the great result. I have two question. The first question, regarding the current business, I think in the first quarter, you already see a very strong shipment growth. Right now, compared between linear guide and the pneumatic, which product has a stronger demand? Do you consider to raise the price for either of the product? I think that's my first question. Basically, we have stronger demand from pneumatic. Linear guide in first quarter, the over-demand still have not recovered significantly. Even some peers, they say they want to raise their same price. As we know, it's just selected items can be hiked to customers' pricing. Basically, we have increased our pricing in overseas market, but still sustain stable pricing in China market because we still will launch more new items for pneumatic and prefer to sustain better relationship with customers and convince more customers buy more linear guide from AirTAC. We also have electrical controller. New spec will be launched in second half of 2026, and we still continuing to develop electrical actuator or electric cylinder. Maybe we can launch electrical actuator in 2028 or 2029. Based on we have a record high revenue and high position of the OP margin, maybe it's better not to hike our same price in China market in this moment. Thank you. Yeah. Thank you. Ivan, I have another question, is regarding to your cash management, et cetera. You mentioned, you will raise your dividend payout. The same time, your cash flow from operation, is improving as well. How will you make your investment more efficient, to improve your ROE or ROIC? Thank you. Yeah. Basically, in past, we just sustained it around 50% payout ratio. We have specific profit in the year stay on our retained earnings. Once we just continue to sustain 50% cash dividend payout, the base or retained earnings will be higher and higher. Even we pay 50%, the ROE still won't be too high. Maybe we can increase our payout ratio, and we also continue to improve our internal efficiency. Certain product mix also can have a higher OP margin, higher EPS to increase our ROE in coming years. Yes. Sorry. To follow up. Because you raised your revenue guidance, do you need to increase your CapEx or you can spend the same CapEx but generate a higher revenues? Basically, in past three years, even the over-demand still not very obviously recovered but still spend CapEx to improve our equipment productivities. We have a lower CapEx number from 2023-2026, it just run TWD 2 to 3 billion TWD a year. It doesn't mean we slow down our expansion. We have better productivities of our process and still can support 20% output volume growth every year, even we just have TWD 2 to 3 billion CapEx. Basically, we still can find some ways to improve our productivities or production efficiency. 2027, maybe the CapEx still could be around TWD 2 to 3 billion. 2028 or 2029, we have to spend a little higher CapEx to expand our electrical actuator parts capacity. Even the CapEx could be a little higher, it just could be TWD 3 billion or a little higher than TWD 3 billion per year. Okay. Thank you, Ivan and Ellie. That's all my question. Okay. The next question comes from Cassie. Cassie, please. Hello? Cassie, we are not able to hear you. Can you try again? Hello? Yes. Hello. Okay. Loud and clear now. Yeah. Hi. Thank you. This is Daisy from Macquarie. First, thank you, Ellie, and congratulations, Ivan, for your very exciting results. I have several questions. The first is regarding your OP margin based on the year-on-year or Q-on-Q base. I want to know what's the reason behind your OP margin improvement. Thank you, Ivan. Okay. Thank you, Daisy. I mentioned we still can find more ways to improve our production efficiency internally. We also can improve our same product mix. Basically, we have a better OP margin first quarter of this year. The other reason could be we have better revenue scale, and the OPEX leverage also could be better. We expect, even we can say, we could have another higher OP margin in second quarter of this year. Even could be a record high number in second quarter of the year. Because we not just improve our internal production efficiency, and we expect second quarter revenue scale also could be much better than first quarter of the year. OP margin, once there is no too severe non-income issue, we believe our OP margin in second quarter of 2026 could be a record high numbers or percentage. Thank you, Ivan, you just guided, say 2026, the OP margin will be around the 33%. Given another say that the improvement in the second quarter, is that your OP margin, the whole year guidance is too conservative? Yeah. I have mentioned it in my briefing. The lead time of pneumatic is too short, so we still cannot 100% ensure the demand situation in second half of the year. We used to give a real conservative numbers to the market in first half of the year, and based on quarterly result, we'll upgrade the guidance number. Understand. My second question, Ivan, is regarding what's the reason behind your very strong, we are seeing, the record high order book in January, and then in March again. Is this the industry that overall demand a recovery or just your wallet share gain? As we know, so many FA players, they have pretty strong revenue or order book in first quarter of the year. AirTAC, we still continue to launch more new pneumatic items we had share gain. We also have new business electrical controller to support our business. In addition, even the linear guide revenue still could be a little lower than our expectation, but it have been record high quarterly linear guide revenue in Q1 of this year. Basically, once we can continue to improve our linear guide brand image, we believe the revenue contribution from linear guide in coming quarters or coming years still could be better and better, and it can improve our consolidated revenue growth. Also could have a better fixed cost leverage on OPEX. Ivan, thank you. My last question that we just want to know your estimated revenue from the semi, say, in the second half next year, and also the whole year contribution in 2028. Thank you. Basically, it's our whole new business. Our current semi revenue just coming from those items we used to develop for other application but still can be shared by semi customers. Monthly revenue just around RMB 5 to 6 million a month in 2025. It was a little higher in March of the 2026, higher than RMB 8 million. The, maybe still too early to tell the expecting revenue for 2027, 2028. Basically, based on we could have better brand image, also benefit from government localization policies. Maybe we still could be enjoy higher revenue contribution from semi in coming years. It's difficult to tell or it's too early to tell the exact number for 2027, 2028 from semi customers. Okay. Got you. Thank you very much, Ivan, and, thank you, Allie. Thank you. Okay. next we have Jui-Chuan Chih. Jui-Chuan Chih, please go ahead. Jui-Chuan Chih, you are muted. Hey. Hey, yes. Hey, Ivan, congratulations on your strong result and good job on delivering your guidance since last year. My question is very simple. I think you guided the electronics to see recovery this year. From what I observation in the electronics industry in China, there are two groups, right? One is the traditional smartphone, PC. Those are still pretty weak. There's a AI related electronic supply chain, maybe the PCB, the optical modules, those have been very strong. Within your electronics segment, is it able to classify into maybe the traditional PC, smartphone? Maybe historically you are more tilted to the Apple, right? This year with the orders momentum, I suspect is related to some of those AI electronics. Is it possible to maybe split your electronics by AI versus maybe smartphone, PC? That's my question. Thank you. Okay. Basically, any production activities need pneumatic indirectly. Pneumatic just for customers production process, not in the end product. Even somebody say the sales volume of smartphone in 2026 won't be too good, but we also have mentioned in my briefing, we need more new models launch and bigger spec upgrade, then customers need to set up new assembly line or capacity. The volume, certain volume of customers' product is not very high correlation to pneumatic demand. Basically, we expect pneumatic could have double-digit revenue growth and maybe higher than 10%. We have 20% growth in first quarter, it's better than our expectation. Also based on the short lead time of the pneumatic product, we just can say it could be double digit for the whole year of 2026. This is still more smartphone related. No. That's correct. Smartphone revenue just around 25% to 30% of our electronics revenue. Not just how you mentioned Apple are our customers, all of the local China smartphone players are our customers. How about PCB optical module, maybe AI related, in electronics? Yes. I mentioned whenever customers have production activities, they need more pneumatic to support their automation improve. Okay. you can't say the percentage within the electronics? So many electronic supply chain customers, maybe they not just engage in specific single product. Mm-hmm. We can pick up smartphone revenue from our electronics revenue. The rest of the electronics revenue is not very high percentage. Mm-hmm consolidate electronics revenue. It's better not to quantify those smaller percentage items. Okay. Thank you, Ivan. Congratulations. I appreciate. appreciate. Thank you. Okay. Thank you. Next, we have Andrew. Andrew, please, go ahead. Hi there, thanks so much for your time. You talked a bit about increasing ASPs in overseas markets. I just wonder, can you please elaborate on the business you have overseas and exports, what products that entails, and just how much you're able to raise prices, and who you're taking market share from? Overseas revenue just around 4%, 4% to 5% of our consolidated revenue, and we have a better business in Europe and America. Basically, pricing hike is still based on different items for different customers, and it could be single digit to teens of percent for the pricing hike. We said the total pneumatic demand in non-China market could be around 75% of the global demand, but we just have 4% revenue from overseas market. It's very limited market share of our overseas business. Basically, there's still so many bigger competitors or smaller competitors in global. We get more shares from Chinese peers in China, and we can get shares from different or variant competitors in global. All of them still not very high revenue for AirTAC. Okay, thanks. Maybe just one follow-up. Can you talk more about the products that you're developing within semiconductor and specifically, what is it? Are you able to quantify, even roughly, just the sort of the revenue potential, the margins that you think you can make on these devices? As we know, the biggest Japanese players, their China revenue are almost around 20% to 30% contribute by semi-items. The total semi demand amount in China market could be RMB 5 to RMB 6 billion. We just have RMB 60 million in 2025, maybe we'll be a little better or higher from 2027 or 2028. We expect we could have RMB 1 billion revenue from semi in around 10 years. It's just our expectation. How fast of the progress will be still depends on how fast that the customers want to place more orders for AirTAC. Thank you. Of course. Okay. Next, we have Jason. Jason, please go ahead. Good afternoon, Ellie and Mr. Ivan. This is Jason Lo from the First Capital Management. The first question, I would like to know the profit margin guidance, because from early March, we see the hard metal price or even the energy price be higher. In the second quarter, you know, do you see any negative effect for our variable cost to our product? Thank you. I mentioned we still have found more ways to improve our internal efficiency and productivities. We have 33% OP margin guidance for the whole year. It have included the metal material cost hiked 10% in 2026. Basically, those hiked raw material cost still can be offset by our internal production efficiency improvement. Thank you. Okay. For my second question and the last question is could you recap for us the utilization rate in the 2026 first quarter and the guidance for the second quarter? Thank you, Mr. Ivan. Pneumatic utilization rate have been higher than 100%. Linear guide have over 3% in first quarter of 2026. For the second quarter, maybe we can expect the number will be higher than before? Still could be higher in second quarter because the shipment in first quarter had higher than I would expect it. Our inventory turn days even could be just around 100-teens days. It's not healthy, it's too low. Basically, we still will keep very high utilization rate, even ask or more operator to overtime to produce more volumes in second quarter. Okay. Thank you, Mr. Ivan. Have a nice day. You too. Thank you. Okay. Thank you. Next we have Iris. Iris, please, go ahead. Yeah. Thank you, Ellie. Hi, Ivan. Congratulations on your good results. I've got three questions, if I may. By the way, this is Iris from Deutsche Bank. Sorry, I forgot to introduce myself. My first question is actually on the raw material price and pricing as well. Could you maybe give us a rough split of what are the key raw materials in your cost of goods sold? I assume it's primarily aluminum, but want to have an understanding, like a rough split is fine. Like you've mentioned that your guidance has included a teens percent increase for the metal price. To which point, then you will consider increasing the price? I think like, by how much the metal price needs to increase, then you will consider to increase the price. Our cost structure, raw material cost almost around 50% of our cost of goods sold, including 20% cost of goods sold is aluminum, 45% is copper, and another 5% is steel. Basically, aluminum cost hiked by 10% in past 12 month, and it's around 3% hiked from copper. Basically, we will keep stable pricing for pneumatic in China market. It doesn't mean we cannot pass those raw material cost disadvantage to customers. Basically, we just hike pricing once in 2011 because the copper was hiked. Copper cost was hiked by five to six times. We just hiked those pricing for customers just for the copper material can change the higher percentage of the cost of goods of product or SKUs. Rest of the items still keep stable pricing, even similar pricing. I still have to trace. We still can find more ways to improve our production efficiency. Not just we can accumulate our experience to find more ways, also caused by the automation knowledge or technology is improving. We can find more ways to improve equipment productivity or production efficiency. Basically, we won't hike certain price to customers, basically, but it still depends on the competition environment. We believed even the raw material cost still will be hiked in 2026 or rest of the 2026, but still can be controlled by ourselves. Thank you. Understand. Thank you, Ivan. My second question is on the linear guide business, because I believe like some of the peers in the linear guide business is pointing to better demand for their linear guide business. But you've mentioned that you believe the linear guide demand didn't really recover for the market in the first quarter. Can you give us maybe a bit more color on that? Also, what do you think is preventing AirTAC from kind of seeing higher growth in this business? Basically, we expect the overall demand could be better in 2026, we have not seen that in first quarter. Why we expect the linear demand could be better in 2026 because the demand cycle of linear used to be around two to three quarters later than pneumatic cycle. Once pneumatic began to recover from end of 2024, the linear demand could be better from fourth quarter of 2025. But second quarter of 2025, U.S. have a tariff policies. Linear could be a capped price component. It's not like pneumatic with capped price demand and a component replacement demand. The tariff policy impact to linear could be higher than pneumatic. Basically, we still expect the linear demand could be better or begin to recover in 2026, just not in Q1 of 2026. Okay. Are we seeing some signs of maybe, the demand picking up since we're end of April now in the second quarter? Yeah. Basically, the demand seems a little better in past one or little more than one month. Okay. That's great. My last question on the exciting semiconductor business. Can you give us some understanding of what are the, say, barriers for entry in the semiconductor market? Is it more about customer relationship and the customization required, or it's more technological in the clean rooms? Like, and also what are the drivers for us to be successful in this market? I mean, I understand the whole localization drive. Other than that, I mean, where, how, like, what can drive us to grow in this market? We still could be a beneficiary of the government process localization. Our pricing just around 40% of Japanese peers pricing. That mean 60% discount to Japanese peers pricing. We still can enjoy 70% gross margin from those items. It's our whole new field to support semi customers, and we have our expectation, but still depends on customers' revocation period and how many orders they can place to AirTAC. Pneumatic or even so many high application, higher end customers, they have very deep image for pneumatic supplier because pneumatics are a little complicated than other FA component. It's very low ASP, low cost percentage to customer's total production cost. Even we have 20%, 30%, 40% pricing lower than peers, lower than Japanese peers or European peers, but it's very minor to customer total production cost. Many customers, they don't want to take any risk to change their pneumatic price to made in China suppliers. Basically, in past, it's the main reason why we don't want to set semi items development to be our first priority. We still prefer to do those easy money item with the easy money items first. The progress or the competitiveness of AirTAC to enter in semi items. Basically, we could have similar quality, similar large technology with international peers. The semi revenue progress still depends on how fast of the local China semi customers place how many orders with AirTAC. Understand. Just to double-check, when you say about the pricing being only 40% of the Japanese peers, you're referring to the semiconductor-specific products, or you're referring to the broader, product portfolio? I guess it's a bit higher than that. Semi items. You asked me semi items, so I just answer you about the semi pricing. Understand. Very clear. Thank you, Ivan. Thank you. Okay. Thank you. Next we have, KekYee. KekYee, please go ahead. Hi, Ivan. good to hear from you again. This is KekYee from Principal. just want to double-check. this year, right, do we still see the normal seasonality in the monthly sales, or this year is a bit abnormal, we may see the sales pick up in April, May, and then flattish into August, September? How is the monthly sales seasonality this year? Yeah, basically second quarter used to be the peak season. Yes. pneumatic. Yeah. Whenever the economy is good or bad, second quarter always is the peaky season of the pneumatic. Once want to talk about the consumer revenue of AirTAC, it still depends on the progress of our new business, Ningbo electrical controller. Yeah, it still depends. Okay. Coming back to the segment like electronic segment, right? You said there's more new model and spec upgrade this year. When you say new model, do you see like new items that are not in the market before coming into the market this year by a different new company that enter the consumer electronic or new product range that entering the consumer electronic? Maybe not just contribute by new entrant. Existing players in the market, they still have launched or going to launch many new models in rest of the year. Whenever they launch new models. Yes Basically, they need to set up new production process or assembly line, and they need more pneumatic component. Yeah. Okay. For the auto segment, SMC is about 30% of the mix is auto, and AirTAC currently we are only 9%, so it's quite easy for us to gain market share. How fast can we go to like, say, 20%? Like, we need two years to go to 30% of mix or one year, end of next year, we can go to 30% of mix coming from auto? Basically, percentage to the mix from specific application still depends on the base. We could be the biggest traditional pneumatic suppliers, pneumatic components suppliers. Once we want to achieve 30% of the revenue coming from auto, we think it could be very difficult. Yeah. Hmm. Because we have specific- Oh, because you are very diversified and your mix is quite different from SMC. Yeah. Yeah. Basically. Okay. Yeah. Okay. We think we just have 10% market share in China auto industry, much lower than our overall market share, 30%. We believe we still can enjoy pretty good market share gain from auto customers in coming years. How high of the percentage will be still depends. Okay. Got it. Thanks, Ivan. No further question. Thank you. Okay. Thank you. Next question comes from Jeremy. Jeremy, please go ahead. Okay. Yeah. Thank you. Just two question from me. As far as I understand it, there are a lot of different kinds of specifications for pneumatic equipment, right? I mean, a lot of different kinds of [inaudible]. And i understand that for a company like let's say SMC, they cover a lot of specifications and in order for them to maintain a very short time they keep a very large inventory in order to respond quickly to the market right. If you are looking to gain more market share in China going forward over the next two to three years, does that mean that you will need to build up your inventory in terms of the number of specifications that you have on hand as well? If that's so, does that mean that you need to actually boost your capacity going forward? Okay. Basically, most the different SKU, the production can be shared by the same equipment or production process. We don't have to buy specific new equipment for specific new SKUs. Different company have different operation storage. Basically, our lead time to support customers could be the shortest one in China market. We promised customers they can get their demand in three to five days after they place order through AirTAC. As we know, the other two bigger peers is longer than one week. We review our inventory from raw materials, work in process to finished good under our ERP system, and we observe or review, even revise the ratio of the each items by weekly. We just have two. 10 years ago, we just have 120,000 or 150,000 items, and our inventory turnover days was around 170 days at that time. And we have increased our SKU number to be around 50,000 to 60,000 items currently. And our inventory turnover days just around 120 days, even lower than 120 days at end of this March. So basically, different company have different storage, and we could be have a better efficiency to manage our inventory level. I see. Anyway, based on your current strategy and your business model, you feel that you don't need to boost capacity in order to still take market share in the near term, right? We still have to spend more capacity because we have specific shipping volume growth. We need to buy more new equipment to increase our output. In addition, for SMC or Festo, they have around or even more than 700,000 items, 50% customized, 50% standardized. AirTAC, we have 250 to 60,000 items, 90% standardized. We just target on around 35% of China pneumatic market share. We just developed 350,000 items to cover 80% to 85% of the total market demand and enjoy 35% of amount the 80% to 85%. It's good enough for AirTAC. We won't develop 400,000 items, 500,000 items. Okay. Understand. Very clear. My other question is, you stated in your opening statement that you're expecting possibly a two to three year upcycle for pneumatic equipment in China. However, and also I noticed that you said that you are producing right now above 100% capacity utilization. It doesn't seem that you're accelerating your CapEx spend, so you're still gonna spend about TWD 2 to 3 billion per year. When you speak to your customers, do you get a sense that this year it seems like demand recovery is very broad-based across many, many industries when I speak to other companies as well. Do you get a sense that the investment is being front-loaded this year because it's the first year of the 15th Five-Year Plan and, you know, they want it to be a good start? Is there a risk that we might see a slowdown next year? We defined 100% utilization rate based on 24 days a month and 21 hours a day. Once we have a better shipment, we can ask our operator to work for 26 days a month, then meet 110% utilization rate. In specific process, we still can put it more operator to let equipment work for 24 hours. Basically, TWD 2 to 3 billion CapEx a year is good enough for our current demand situation or based on our prediction. In addition, the equipment, pneumatic equipment lead time from we placed orders to vendors, our vendors, to the this new equipment could makes production just around three month. We used to construct buildings first, and we can, based on the current shipping situation and decide when to buy more equipment. Just in three months, we can have a new capacity. Just the same world, we always can find some ways to improve our internal production efficiency. Even the same equipment, we could have additional output or production volume to support customer demand. We can adjust our CapEx whenever we want to. Even 2026, 2027, our current expansion plant, TWD 2 to 3 billion CapEx a year, still can support 20% shipping volume growth in those two years. Thank you. Okay. Understood. Thank you very much. Okay. Thank you, Jeremy. Next we have Kenny. Kenny, please. Thanks, Ellie. Hi, Ivan. Congrats on the amazing results. I have actually two quick questions just following up the overall demand situation. I guess in the previous several cycles, you had some years growing your revenue over, say, 20% or even 30%. I'm wondering if this time, you need to cherry-picking your orders, like your PB ratio is going beyond control, so you need to forego a little bit demand. What do you think about the current situation right now? Firstly, in past 20 years, every two years we have up cycle, then two years down cycle. This time, we prefer not to define as a cycle issue from late of 2021 because it's government some specific control policy to let the over-demand could be deserted pretty fast. Government have released or launched so many stimulus policies, they still need to take some time to restore people or corporate confidence. This up cycle from late of 2024, it just could be a moderate recovery. It's not like previous up cycle in 2021 or 2017. It's U-turn of V-shape. This time it's just a moderate linear recovery. That's the main reason why we expect it could be longer than two to three years. Just for our prediction, the return of the industry is pretty short. We cannot ensure our prediction can be achieved 100% in coming years or in future. I see. Thanks for your color. If I may squeeze one last question, is that regarding the OpEx, I know usually you will not give us absolute number, but looking back on 2024 and 2025, you were so disciplined controlled, like TWD 5.2 to 5.4 billion every year. Supposedly this year, I think given your guidance, you will probably have TWD 40 billion revenue. How should we think about this? Is there any ratio you would give us for as an OpEx rate target internally? How should we think about this? I know you have answered that you will have operating leverage, but just for us modeling, if any color. Thank you. Basically, once we have good revenue scale, we could have pretty good leverage for OPEX. Marketing used to be around maybe high single digit to 10% of our revenue. Around 40% of the selling expenses is related to sales teams' bonus plan. Our bonus plan used to base on revenue growth rate, OP margin, budget achievement, and the receivable received on time or not. Still depends on those variable issues to decide our selling expenses. Most the general and administration expenses or R&D expenses could be fixed cost, but those two departments still can enjoy bonus plan based on OP margin of the subsidiary. Basically, we cannot give you any OpEx number by TWD because most of our business or expenses still located in China based on renminbi base. Our functional currency still is renminbi, but we list in Taiwan. We have to transfer our financial statement from RMB to TWD. Once you just compare by TWD base, you still have some issue of the FS every year or every quarter is different. Basically. Understood I can say the percentage of the OPEX, selling product, selling expenses could be high, high single digit to 10%, and 3% administration expenses, around 3% could be R&D expenses. I see. That's very helpful. Thank you, Ivan. My pleasure. Okay. Thank you. I think we are running out of time. Ivan, do you have anything else you want to remind us? I'm fine. Thank you. Okay. thank you, Ivan. thank you all for joining the call. This conclude the call today. Thank you. Have a good day. Thank you. Bye bye. Thank you, Ellie. Thank you everyone. Have a good day. Bye.