bullish
3Q Follow-Up - Torex Semiconductor (6616 Jp)
SUMMARY
- The graph below shows the trend of capex, depreciation, OP and EBITDA. According to the Company, major capacity expansion capex has peaked out in FY24/3.
- While the peak in depreciation expense will come in FY25/3, the key takeaway here is that management has stuck to its guns and executed on its investment initiatives in the extended MTP targets to FY29/3 aiming to boost capacity for sales up 1.5x (see outline of capex plan on P4).
- Based on our follow-up interview, inventory consolidation at the intermediate distributor level, particularly for consumer electronics in the Greater China region, is still underway in the Jan-Mar quarter, a similar trend observed by global major Texas Instruments.
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