Do you care about the huge forex losses in the second half of the year for the company?

But what is most puzzling is that the management has poured a much bigger and colder bucket of cold water on the performance outlook this time compared to last time...

Personally, I believe that the semiconductor industry is indeed not experiencing a comprehensive recovery, for example, inventory of mature chips such as automotive semiconductors is still high. However, since the company's main business is in the advanced packaging supply chain, you can clearly see that the company's performance recovery is far ahead of other semiconductor industry chain companies in Bursa Malaysia. The reason why the stock prices of most Bursa Malaysia semiconductor industry chain companies are not keeping up with the global semiconductor technology companies' rise is because these companies are all in the traditional packaging supply chain.

Advanced packaging is the future. Compared to traditional packaging, advanced packaging has many advantages. For example, it breaks through the limit of Moore's Law, improves chip performance, reduces chip power consumption, and allows for smaller production costs and chip sizes.

However, this only means that I am still bullish on the company's revenue continuing to increase. It does not mean that I am bullish on net profit continuing to increase. Apart from additional personnel expenses, what really worries me is the huge foreign exchange losses. From the latest annual report, we can see that the company holds a large amount of cash, 324 million, which initially seems good. But the most frightening thing is that the proportion of Malaysian Ringgit is less than 5%! Although the company also has a small amount of non-Ringgit debt, it is not enough to offset the foreign exchange losses caused by the sharp rise of the Ringgit. Net foreign currency now stands at 280 million after deducting the debt!

Despite the management's pessimistic outlook for the future, I still believe that there is no slowing demand for advanced packaging at this stage. Especially under the current AI gold rush, the production capacity of TSMC's advanced packaging CoWoS and the next year's capacity of Samsung/SK Hynix/Micron HBM are already full! So I disagree with the management's industry outlook!

As the Ringgit continues to soar against foreign currency this quarter and the company has not hedged against exchange rate risks, the foreign exchange losses in the next financial results could reach a record high of 20-30 million!

So, are you worried about the company's huge upcoming foreign exchange losses? Or do you think that foreign exchange gains and losses are not the core net profit and therefore not important? Do you think the stock price will soar or plummet when the market opens next Monday?