L-R: CFO Samuel Yuen | CEO Yao Hsiao Tung | Deputy CEO El Tay | COO Gary Ho.
Photo by Sim Kih
Q: What is the current yield and volume for your metal casing business, and its outlook for this year?
Mr Tay: We went into metal processing in a big way last year. We went through a learning curve in 4QFY2014. As of today, we have reached our yield targets. However, factors other than yield affect profitability. For example, how efficiently we use the cutters and consumables.
We intend to grow this business segment. We have customers lined up to fully utilize our metal processing factory capacity for the rest of the year.
Mr Yao: There is a costly learning curve because there are over one hundred processes for Xiaomi's project. Many of our competitors faced the same situation when they began to produce for Xiaomi. We are newcomers to metal processing but we improved our yield quite quickly. It took us about 3 to 4 months to significantly bring down the cost of producing one precision component.
Xiaomi recently announced that it intends to launch a 5.7” Xiaomi Note. This involves nano moulding for aluminium machining. Again, we will face a learning curve. I believe we will be able to catch up.
We believe we will break even for metal processing in FY2015. I am confident that after this year, this segment will become very important to us. It should also be profitable.
Q: Do you have customers other than Xiaomi for your metal processing facilities?
Mr Yao: Yes, we have several other customers. Our CNC machines will easily double this year.
Mr Tay: We intend to add a few thousand CNC machines, depending on the actual loading.
Mr Yuen: The few thousand machines include equipment for co-investment projects as well as leasing arrangements.
Mr Ho: A big number of our projects are using co-invested capital equipment. Our customers co-invested with us because they are confident about our ability to deliver and wanted to ensure ample supplies from us.
Q: Will you remain in net debt for FY2015?
Mr Yuen: Yes, we will remain in manageable net debt this year. Last year, it was only S$2.2 million.
