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Issued by: Chang Wah Electromaterials Inc.
Issued on: April 23, 2024

Chang Wah Electromaterials Inc. (CWE, 8070.tw) announced its operational results for the first quarter of 2024 on the 23rd. The Company posted preliminary consolidated revenue of NT$4,019 million and a net profit attributable to owners of the Corporation of NT$320 million, representing a substantial 174% increase compared to the previous quarter. Earnings per share (EPS), calculated based on a par value of NT$1 per share, amounted to NT$0.48.

First-Quarter Earnings More Than Doubled Compared to the Previous Quarter
Affected by fewer working days, CWE posted consolidated revenue of NT$4,019 million for the first quarter of 2024, marking a 4% decline from the previous quarter. Despite the dip in revenue, gross margin and operating margin remained steady at 18% and 10%, respectively. Boosted by foreign exchange gains, net profit attributable to owners of the Corporation soared to NT$320 million, representing a 174% quarter-on-quarter increase and a 50% year-on-year growth. EPS after tax stood at NT$0.48, a significant improvement from NT$0.17 in the previous quarter and NT$0.31 in the same period last year.

Expand Into Diverse Product Lines, Such as Micro LED
As an agent, CWE's key product lines include EME, which is not only essential for traditional wire bonding and advanced flip-chip packaging, but also plays a crucial role in emerging applications such as wafer-level packaging, panel-level packaging, electric vehicle powertrains, and advanced autonomous vehicle modules. The expanding use of encapsulation resin across these diverse applications positively contributes to CWE’s business growth.

Apart from semiconductor materials, CWE also distributes advanced wafer-level molding equipment, which is used in advanced back-end packaging processes. As applications like high-performance computing, AI, 5G, and automotive electronics gain traction, the demand for advanced packaging technologies such as InFO and CoWoS has increased significantly. This has driven strong order intake for CWE’s advanced wafer-level molding equipment, with order visibility extending through the end of this year. Currently, the Company holds a 100% market share in Taiwan.

Furthermore, CWE has leveraged Group resources to actively expand into new product lines. Utilizing the roll-type plastic substrate materials it currently represents, the Company has partnered with its subsidiary, JMC Electronics Co., Ltd. (a COF substrate manufacturer), to develop an innovative ultra-thin packaging substrate. This new substrate, designed for emerging applications such as Micro LED, has already been adopted for mass production by customers.

24 Years of Consistent Dividends with Annual Increases in Cash Payouts
CWE has consistently been dedicated to sharing its operational successes with shareholders, ensuring the generous distribution of corporate profits. Adhering to a prudent dividend policy, the Company has paid cash dividends for 24 consecutive years. Based on a par value of NT$10 per share, the total dividend payout over this period has accumulated to NT$205.19 per share, which is more than 20 times the capital.

In 2023, CWE declared a cash dividend of NT$2.54 per share, surpassing the NT$2.53 paid in 2022. When calculated based on a par value of NT$10 per share, this represents the highest dividend payout in the Company’s history with a payout ratio of 116%, compared to 80% in 2022. Furthermore, CWE is one of the only two publicly listed companies to achieve record-high cash dividends for 12 consecutive years.

As CWE and its subsidiaries complete their mid- to long-term strategies, the Company's operational performance reinforces a stable dividend policy. The management team strives to ensure that the annual cash dividend exceeds the previous year’s distribution.

High Shareholding Value in Investees
An analysis of CWE's profits shows that 20% of its profits comes from its semiconductor materials and equipment distribution business, while the remaining 80% is derived from its investment ventures. Through diversified investments, CWE has strengthened its industry presence and expanded its business portfolio to include semiconductor materials and equipment, with the goal of enhancing its value and increasing its potential market value.

CWE's current investment portfolio is categorized into three key areas, each generating synergies for the Group. The first area encompasses its core semiconductor business, which includes Chang Wah Technology Co., Ltd., specializing in metal wire bonding, and JMC, focusing on COF substrate manufacturing. The second area involves the extension of core technologies and includes semiconductor equipment maker Tian Zheng International Precision Machinery Co., Ltd. (6654), semiconductor specialty chemicals producer Advanced Echem Materials Co., Ltd. (4749), flexible circuit board manufacturer Taiflex Scientific Co., Ltd. (8039), and electrical contact component producer Silver Connection Co., Ltd. The third area consists of financial investments, including contact lens manufacturer Vizionfocus Inc. (4771), parts stamping and die-casting manufacturer How Weih Holding (Cayman) Co., Ltd., optical film distributor Wellstech Optical Co., Ltd., as well as other short-term investments made for dividend income or to maintain customer relationships.

Among the aforementioned investments, Vizionfocus was listed on March 18, 2024, and Advanced Echem Materials was listed on the Emerging Stock Market in February 2022. Both companies have demonstrated excellent operational performance, driving an increase in their stock prices and, in turn, boosting the value of CWE’s investments. By the end of 2023, the market value of CWE’s holdings in Chang Wah Technology reached NT$15 billion. When factoring in the market value of its key investments in JMC, Vizionfocus, Advanced Echem Materials, and others, the total value amounted to approximately NT$21.9 billion.