Earnings Call: Q1 2020

Aug 2, 2019

My name is Yoshida. Today, I would like to explain about the consolidated financial results for the 1st quarter of the 1st fiscal year ending March 31, 2020. And then Mr. Kainuma, Representative Director, CEO and COO, will explain about the highlights, including business updates. Please turn to page 2. Consolidated net sales for the 1st quarter totaled 24,425,000,000,000 decrease of 4.6% year on year, but an increase of 10% quarter on quarter. Operating income was down 74.4 percent year on year and down 47.6% quarter on quarter. To a total JPY 3,663,000,000 profit for the period attributable to the owners of the decreased 78.9 percent year on year and 74.8 percent quarter on quarter to total 2,297,000,000 yen. Currency fluctuations brought net sales down on an estimated 1,000,000,000 quarter on quarter and up 1,000,000,000 year on year. It also brought operating income up 0.1000000000quarteronquarterandup0.6000000000 year on year. Also on April 10th, we acquired a 76.2 percent of controlling interest in UHING Limited making it our subsidiary. Since we included Eushing in the scope of consolidation as of that day, we added the Uxin business to our reporting segments. Please go to the next slide. This is a quarterly trend in net sales, operating income and operating margin. The bar graph on the left is net sales, and the one on the right is operating income, along with a line chart for the operating margin. The operating margin for the first quarter was down 4 point was 1.8% and was down 4.9 percentage points year on year and down 2.0 percentage points quarter on quarter. However, expenses related to retirement benefits and business integration costs of Uxin totaling approximately 4,000,000,000 yen were accounted for as a special factor in the first quarter. Otherwise, operating margin would be 3.8% if this expenses were excluded. Also, please note that figures of the fiscal year ended March 2018 are based on JGAAP and provide it for your reference so they can look at the past figures. The same applies hearing after. We'll be going to the next slide. This slide shows the difference between the initial forecast as of May and the actual results for net sales and operating income by business segment for the first quarter. While net sales for the Machine Components business segment were almost on par with the forecast, Sales were the electronic devices and components business segment, mainly electronic devices were lower than forecasted. The Mitsubishi Businesses Sales were higher than projected, mainly due to increased shipments of smartphone related parts. The UCM business saw lower than expected sales due to a slowdown in automobile production worldwide. While operating income for the machine components business segments was lower than projected due largely to the decline of sales volume of ball bearings for fan motors, operating income for other segments was about the same as projected. Going to the next slide. Now, let's take a look at the results by segment, starting with the Machine Components business segment. On the left is a graph indicating quarterly net sales trends and on the right is a graph of the bar chart indicating quarterly operating income trends. Along with the line chart for operating margins. Net sales for the first quarter rose 1% quarter on quarter to total 46,100,000,000 yen. Bull bearing sales rose 1 percent quarteronquartertototal29.8000000000 yen. External shipments of ball bearings totaled 179,000,000 units per month on average. While demand for ball bearings used in fan motors slowed down, it remains solid in the automobile market. Sales of rod ends and fasteners totaling 10,000,000,000 yen were down 1% over the previous quarter. Business for the aircraft industry, especially small and medium sized aircrafts, remained steady. Sales of people assemblies increased 4% quarter on quarter to reach JPY 6,200,000,000. Civil Assembly steadily contributed to our bottom line as we held on to an 80% plus market share. Operating income for the quarter totaled 10,700,000,000 yen and operating margin was 23.2%. While this represents a 0.3 percentage point decrease in the operating margin, there was a little quarter on quarter change in operating income. Looking at the results by product, we see that profits for ball bearings brought in fasteners assemblies remained almost unchanged quarter on quarter. Please go to the next slide. Now let's take a look at the Electronic Devices And Components segment. Net sales decreased 17% quarter on quarter to reach 1000000000. By product, motor sales increased 2 percent quarter on quarter to hit JPY 45,800,000,000, while electronic devices were down 43 percent quarteronquarter@22.4000000000 yen. This decline was primarily due to the seasonality of the smartphone market. Sales of sensing devices were about the same as the last quarter at JPY 8,300,000,000. The segment recorded an operating loss of JPY 6,600,000,000. Looking at the results product, we see that operating income for motors and sensing devices remain steady despite an operating loss incurred for electronic devices. From this first quarter, the battery module products that were included under the Mitsumi business transferred to the electronic devices and components business. With this transfer, we have changed our business classification between electronic devices and components and mid to mid business. For your reference figures of fiscal year ended March 2019 and before, are presented based on the classification before the change. The same applies hearing after. Moving on to the next slide. Let's look at the performance of the Misumi Business segment. Net sales increased 7% quarter on quarter to total JPY 49,700,000,000 This was a result of increase in net sales of mechanical components, camera actuators and semiconductors despite the decrease in automotive product sales due to the transfer of the battery module products business. Operating income was just about the breakeven. Next slide please. Finally, let's look at the Uxin business segment including its pre merger performance. Net sales totaled JPY 30,700,000,000 operating income hit JPY 1,000,000,000 and putting the operating margin at the 3.3%. Yushin was included in the scope of a consolidation on April 10th for 9 days from April 1st to 9 net sales at euro, the JPY 4,000,000,000 and operating income was breakeven. Next slide please. The bar graph here shows trends in profit attributable to owners of the parent while the line graph for charts are changes in the profit for the period a per share. The profit for the period was 1,000,000,000. Earnings per share was 1,000,000,000. Next slide please. This graph shows the quarterly inventory trend At the end of the first quarter, inventories totaled JPY 174,400,000,000, which is 33,000,000,000 more than what it was 3 months ago. Yushin's inventory of JPY 15,400,000,000 which included that because of its consolidation to the company. Next slide please. This graph contains a bar chart showing trends in net interest bearing debt, which is total interest bearing debt minus cash and cash equivalents underlying chart indicating free cash flows. At the end of the first quarter, net interest bearing debt totaled JPY 91,500,000,000 feature was up JPY 69,800,000,000 from the previous year. This is mainly attributable to the payment for TOB of Yixin, a JPY 25,100,000,000 net interest bearing debt of Yixin, JPY 26,400,000,000 and the payment of Baixin distribution, JPY 4,300,000,000 in addition to the payment of dividend and bonuses. Next slide please. This is a summary of the forecast for the fiscal year ending March 31, 2020, while the first quarter results were slightly below our forecast we expect the net sales in the 2nd quarter to increase due to the seasonality of products. However, in light of market, the uncertainties caused by trade frictions, currency movements, among other things, we decided not to change the initial first half and full year forecast. The exchange rate is assumed to be and 10 yen to a dollar U. S. Dollar. Next slide please. This slide shows the forecast by business segment. We did not make any changes to our initial forecast by business segment either. This is all for my presentation. Thank you for listening. And I would like to give you some, highlights of today's, presentation or the results So looking at the overall economic situation, we are seeing a slowdown in the macroeconomic situation And I think, we are thinking that this will continue longer than it should be expected. But, mainly in the electronic devices and components in mid to mid business, I think we are expecting a huge recovery from 2nd quarter onwards. And, actually 2 days before, we the sales that was closed in July. It was more than 89,000,000,000 yen. So, last year, we have a new scene is not included. Well, July was 70,000,000,000 yen, so Yixin is about 11,000,000,000 yen in sales. So even excluding Yixin's business, about a a it's about 8,000,000,000 more in the under this condition. We have seen the increase of sales by 8,000,000,000. So maybe, we feel that we have hit the bottom, but, we can't be too optimistic. I think we should be careful about observing about the future outlook. In terms of the Machine Components, for the aircraft business, It is still a very, steady against the plan of having able to increase the profit. However, as I said previously, the ball bearings that is among all of the products, this is the, most, I think, reflects the, economic trend, of the market of war because we have a high share. The current the ball bearings, I think it is weaker than projected. And that is, currently, the fact that we're looking at for the electronic devices and components, it needs to be business overall, because of this, there's an impact from the U. S.-China trade issue, but we have a diversified portfolio. So in terms of risk diversification, I think we have been able to do so as initially planned for the second quarter. These products, I think, support our overall performance. So you see, which has been consolidated from this year, the worldwide automotive market has, slowed down. It's affected by this. So China has seen a 20% sales volume go down in Europe. I think the situation is not that bright. But that said, with this UC in European business through operational improvement. We have supported that that in terms of the quality improvement in Europe, has been able to be conducted in a very speedy manner. And, just the other day, a certain major automotive maker has said that this is, excellent. They said that never expected that the quality would be improved in this short period of time, and we were praised for that improvement. So the overall automotive, market Outlook, I think this is uncontrollable from our side, but Yushin's performance improvement or the quality improvement, this is going forward, as planned. And I think that, for that point, I can report to you. For the other topics, it is just as shown here, but, bow bearings, I think what is going down is the for the fan motor for the data centers that is. So the drop in this area is substantial sort of automobile compared to the first quarter of last year, it has slightly increased and basically flat, So that is how it is trending currently. So this fan motors data center applications and for the home appliance business, it has slowed down a bit. Maybe that is a one source of a headache for us. But in the previous business results. We have said that in the following 10 years, we want to target a sales of 1,000,000,000 yen and at a range 1,000,000,000 to 1,000,000,000 is going to be conducted through M And A of the goal history of 500,000,000,000 is going to be M And A. I think based on this announcement, A lot of companies or businesses has approached us. That's the situation. I can't go into detail currently. But, in terms of the share buybacks, this is one major reason that we cannot conduct the share buybacks in a timely manner. So, in terms of share buybacks, we have conducted no, share buybacks. So that ends my, presentation. Thank you. We would like to begin Q And A session. The first question is from Mister Shaqayama of Goldman Sachs. Please begin. Thank you for this opportunity. Thank you. My first question is as follows, about our bearings, April to June July to September, you gave external sales numbers and could you share with us the forecast for sales and July, September onwards the timing of a bottoming out. What is your projection? Or I think in the past that you shared business, the projection made by salespeople, what kind of a slope will be there? That is my first question. First of all, I Yoshida would like to share with you the numbers and then, with regards to the second half of the question, Kainuma, I will respond. Please give us a moment. 1st, April to June, external sales, 1st quarteraverage $179,000,000 and the 2nd quarter average is 180 1,000,000. This is the projection. And July actual 183,000,000 Fitches slightly above the 2nd quarter average projection. In journal sales, Q1 average 65,000,000, Q2 65,000,000 as well. So external and internal combined Q1, the 244,000,000 in Q2, 245,000,000. That is, the projection. Next, Kainuma will respond So when the situation will start to pick up, our initial projection is, things will pick up starting in July, that was our initial projection. Having said that, however, after that, many things happened the Chinese economy is not picking up and the data center investment is not recovering from July. So things are pushed back a little bit But 5g. So, new technologies, we know what kinds of new technologies will emerge going forward, there may be some time lag, but in the second half of this year, probably things will recover. Bearings, take, for example, the customers are holding inventories to some extent and therefore unless inventories are consumed to some level, we cannot expect that who pledged our recovery. I see understood. My second question is about for using the page 4 of the slide. So the sales were below 5,800,000,000. However, the profit was in line with the projection and the reasons for that and the July to September, the automotive will continue to have difficult time, but faster than expectation the internal efforts such as Acosta Reduction is being effective. Is that because is that the reason why your profit that was in line with the projection? First of all, about the numbers the breakdown of the numbers, I would like to explain. The sales There were positives or negatives and we were able to hit the, not so bad, the number and the Q1 operating profit, we had a conservative view to begin with And the special factors, I think I reported that the outset, the JPY 4,000,000,000, that includes the Yixin integration related expenses of 300,000,000 or almost a 400,000,000 yen? And that, I'm more, almost a half of that, card on Eugene's side, the Thailand, the fraudulent accounting, so on and so forth. We hired the professionals in order to work on those problems. And excluding those factors, we had slight increase in Q1 organic a number. So going to the automotive business, I think, you know more than myself, But the, China automotive, volume, sales volume is going down. So the, now, the type of products that you should make, for instance, you have 4 door handles. So we have 4 door handles in for one unit. So if these sales volume goes down, their business will go down, but for the ball bearings because there's a lot of electrification happening in the vehicle. So even if he sailed line in the volume, we'll be able to maintain the sale volume there's a difference. So using more than expected, their business is going down for the automotive area. But that said, in term there are model changes. There are some, decline due to these model changes So I think we have to look at this situation carefully. But in any case, We are the this is the 1st year that we are being being engaged with the UC in business, but if you look at the past trend, So from going past August September, the volume tends to go up after October, August September. And I think there has been the past trend for the business. Whether this is going to go, as planned, it's very difficult to say from, this point, from now that is, but we will look and observe the situation. So this is a confirmation. In terms of sales, the environment is not that, good, but the bottom line, the profit, you have been looking this in a conservative manner. So the bottom line, even if the top line goes there, I'm talking about using, you'll be able to secure the bottom line. Is that the correct way to understand But, in terms of because this tells this stuff with the profit of Yixin, is it going forward? Is it going to be tough So what is it? What is the nuance? From the April to June, I think basically, we have been conservative And the even if the sales goes down, I think we'll be able to secure the bottom line. But, going forward, So we are assuming that, the same level of profit is going to be generated this year and at the same time, including some improvement that we are going to implement, that's, will be affected. So in terms of the same number of units and the same level of, profit, is what the intention, but if that goes down, if that base goes down, there is, maybe we're going to see a lower profit level. And lastly, I would like to, ask you about the backlight ramp up for this July to September. And I don't think there are no major, model changes from, compared to last year, so maybe that I'll have a more contribution to the profit. So for the backlight business, Are there any changes in terms of your outlook? So in terms of the launch, it will be the, last month from the first quarter, and, it has has been able to smoothly, ramp up this business. So from our point of view, currently, we have been able to smoothly, ramp up the spaces against initial forecast. There has there's no major deviation from that. Understood. So the 1st quarter, in terms of electronic, components business in terms of the sales outlook, you won't be to be too concerned. Well, because I think the first quarter outlook was less than we expected, we were anticipating for the older models for the 1st quarter, the end of the 1st quarter to 2nd quarter. It's not the case that for the new models, we have seen any it's not the case that we've seen any changes there. Thank you very much. Thank you. Let's move on to the next question. Mister Sato, please. This is Sato. Thank you for this opportunity. Thank you very much. I have two questions. If possible, the April, May, June, July, ball bearing at internal sales and internal sales and numbers, please give me. In addition to that, ball bearings the transit, inventories, you may, you you say you have a lot of them But when do you think such a transit inventories that will be consumed? I Yoshida would like to give you numbers. April, May, June, external and internal sales. The unit is 1,000,000, 187, this is April and 179 172 and our Q1 averages 179 and internal sales 65, 66 64. Average 64. July. What about July? July? External 183 and 176 and 182 is the September number and 64, 6564 are these the internal sales numbers? Thank you. Inventories, the consumption. When is it going to be? Probably it will be pushed back as well. So initially, we thought it will be, the a second half of the year. Probably after the end of the summer, but the trend is May as your hard the external sales, a 178. And, 172 or July is 183 and August September if this trend continues, probably a recovery is starting I think I can say that, but at this point in time, it's difficult to say, but last month and this month, 11,000,000 pieces of increase in the bearings we sell. Thank you. My second question is from Q2 Electronics And Mitsumi. Are to make a great recovery. I think I understand that, but the full year plan, the weight is in the second half rather than the first half in terms of the profit. At this point in time to what extent the recovery in the second half is visible Well, I am not a fortune teller or guards, but, our initial forecast is in the 1st half due to various factors including a trade war, the macroeconomic situation will not be good. So in the second half, things will start to improve gradually and the main scenario remains the same after the midterm election things will start to progress once again. That is what we think. And, all companies seem to be a damage echoed into the press report. I read every day. So if the current, trend persists, I think it's still premature to judge whether or not the current trend is to continue. So looking at your projection, the electronics and Mitsumi plus Uxin in the second half, the huge improvement I will be brought about But at this point in time, you do not think, you need to change that projection. That is right. The new, game consoles, how things will turn out for them. At this point in time, I think it's still premature to make a solid judgment after the product released in the market, we will see your reactions and the new smartphones. The market reactions for the new models, so we don't know at this point in time, and therefore pricing strategies and so on and so forth that we need to look at in order to make a solid judgment. So let's go to the next question. So, hello. This is Akizuki. So first of all, So with the ball bearings, production volume would be April to June, would you please give me the number and the outlook would, July to September quarter. And by application, We always talk about the sales trend and the quarter on quarter year over year trend. Can you give me that? So in terms of production for Bavaria, it pulled, so it from a fall, $254,000,002,308,000,000 on average for 1st quarter. If it's $ 253,000,000 for August, 204 T work on September, 2042 average for the 2nd quarter. That's the production for the war pairings. And please hold on. And next is with the ball bearings First quarter, can I refer you to the first quarter? Yes. 1st quarter by application. Automotive nineteen Aircraft 35, home appliance, poor, oa5. It it is related products, to Fairfield Parks 2 motors to 13, Miss Smith, 1. Others, 21. This is percentage that I'm talking about. So quarter on quarter and year over year. Is that what you asked? So maybe a year over year would be better, maybe. So year over year, year over year, Automotive plus 1% aircraft plus 12. Home appliance, plus minus 0, 0A+4, PPC Paypal, plus 5, motors minus 19, amusement, plus Excuse me, 0, others plus minus 0. So motor is disrupting is is the fan motor that you have referred to. Yes. So in terms of the production, compared to the sales. I think production is more than the sales. I think this was the same from January to March quarter. I think at that quarter, you said that there was an the lack of inventory to be smooth out the inventory. You have ink I think, basically, you produced intentionally. So April to June, the production is more than the sales. Is that intentional or But from, you are assuming that from July onwards, the, services, assuming they will pick up so they didn't reduce the production. Can you explain the background of this? Well, production and sales volume, there is the, as maybe you are referring to the products is not going down in line with the sales, but I think this is a marginal, a margin of error level of of of numbers that we're talking about. And there's no reason behind this, specifically. So it's you're not it's not like a situation that you have reduce the production to reduce inventory? No. No. Basically, inventory is, as we have anticipated, I think what we are saying is that we should not, try to reduce the inventory. Another point is that the, on the Mitsumi business, the actuator business, I would like to ask you a question about that. So for the, 1st quarter, I think basically this was good. The new production has been launched in terms of the profit, it has improved. Is that the right direction? The second quarter, I think there'll be new products that are going to be ramping up in a major customer. So I would like to look, ask about the outlook. Of the Mitsumi business, actuator business that is. For the April to June quarter, initially, So for the, in the Chinese smartphone market, we were expecting a big business opportunity And because of this United States in China trade friction, it has been we have been affected. So the on the middle of the first quarter, I think there has been some adjustments. Whether it has been good or bad, it was not that as good as we have expected. I think that is the, actual results for the first quarter. In terms of the, I think, 2nd quarter and onward in the North American customer's production is we are just starting that. There, we do nothing that that's there any issue here. Understood. Thank you. That's all from me. Next question is from Mr. Goto of Mizuho Securities. Please begin. Can you hear me? Yes. Please begin. Thank you for this opportunity. Roughly speaking, Next year's sales, how do you plan to grow next year's sales? That is my question. Last time you talked about a midterm outlook but once again at this point in time top line for next year what is your outlook in a qualitative that is one thing. And the second question is, so you said the current situation doesn't allow you to carry out the share buybacks, but the margins and acquisitions, you're thinking about the margins and acquisitions. So for this year, and next year, what is the thinking to confirm your stance? Next year, next year's picture that we are drawing first of all, economy, we expect economy to recover. So machined products external sales will exceed 200,000,000 and aircraft demand shall be robust remained robust. So the machined products as a cash cow just like, last year, it will be strong. Again, mortars, not just the fan motors, but, the demands for various product are going down and the volumes are going down, but we have secured sales for application to Automotive And the next year, we will get them too. And therefore, electronic products The profitability of promoters is likely to recover and backlides as I get questions every year according to our scenario, it will not disappear and according to the press report, the customers will be support in LCD. So this type of picture remains the same. And in addition, thanks to products, we can solidify growth for next year. That is what we think. And a comprehensive, or integration activities that we have been conducting. And next year, we shall be able to deploy new rounds of activities. Your second question about the share buybacks. It's as stated here, Frankly, as it reached 1,000,000,000,000 yen, we would like to rest four a while. That's what I said in May, but, and that people don't allow us to, take a break, but we have been approached by many, but, at a certain stage, because of the legal requirements, we cannot attach our shares. And therefore, at this point in time, we cannot buy back shares please understand it that way because, I cannot give you any more information than that at this point. Okay. So I would like to talk about the future possibility if if there's any progress. So with the what is in terms of the resources, proceeding with the PMI, is that would that be a bottleneck? So Mr. Kainuma will be involved, and I think basically, you're very much involved by yourself, instruments of EMI. So the CHIN European operation, I think basically we you are spending a lot of resources. So that is what at least I am assuming in this kind of situation. For this year or the 1st half of next fiscal year, if we are going, is it practically possible to have new types of initiatives, yes, it's possible because this is just like you observed. So in a certain area, We just, we're not gonna have any resources. For instance, there are concerns that won't be able to have resources for PMI but for other areas, we have a certain number of resources So what we are focusing on in terms of the area, this is an area that, we think that we'll be able to allocate resources. We are focusing on that specific business area. I think that's the way to understand that. I will not go into details. So when you said area. It's a business area application area. So that's your implication area. So that's a business area. That I'm talking about. If we look at the current business portfolio within our business portfolio, where we can have, well, some capacity for, resources. In some business areas, we don't have enough resources So there's a difference in terms of the available resources. So right now, we are in terms of the business areas, so we think that we have more or less, capacity for resources. This is an area that we are conducting various deliberations. Understood. Thank you very much. Thank you. Let's go to the next question. Hirota Sam from UBS Securities. This is Hirota from UBS Securities. So I would, talk about you be, the Mitsumi and the Machine Components. One question is, for the Mitsumi business, Well, this is a simple question. In this year's plan, this new product, this is the, machined business. Is this included? Or in terms of the end of the production site, you are There is some recording media reporting that you're going to transfer the production from China to Vietnam. So I would like to confirm about your stance, about your the production sites. So it is very difficult to say specifically about the this thing. And we haven't mentioned about this specifically, but towards the customers we want to fully support our customers. So that includes the old models and new models. So we're going to go forward under that concept. And in terms of production side, at the newspapers or I think the boarding has been conducted that, we're going to be producing in Vietnam But as we have been saying from before, so Cambodia, we have a production set in Cambodia, this and this basically, we want to utilize the Cambodia production side and we're discussing this with the customers. So, just to add up, so in Cambodia, there are various inquiries that are coming for Cambodia. So we do not want to use up that capacity by transferring our internal production capacity. So it will not be a positive. So it just placing something from one place to another. So we want to use the Cambodia insights so that it will be have a positive impact on our sales. Thank you. Oh, just let me confirm. So a com conversational products and new products for the customers, you say that you want to take care of that. And so that is already reflected in your initial assumptions. Yes. My second question is, is about the profit for the machine components is, 51,000,000,000. It seems that, up quite high, but the ball bearings, they have been doing a product productivity improvement activities. So the volume is stable. I think maybe the cost is going down because of the, stability. And, you are putting priority and, you know, utilizing the low cost production area, maybe re rearranging the lines So what is your initiative for the 2nd quarter? I'm wondering what type of contribution are you expecting through this? At the beginning of this fiscal year, what I have said that in terms of the putting priority we want to have a full utilization of where the production cost is lower. And, in terms of over time, I said, we want to reduce that as much as possible, and that is our policy. But it's not the case that all the production sites have changed. It's not the case, there are a lot of things that we still have to do. In the second half of this year, by the second half of this year, I think this transition will be completed. That's what I have heard. So for the second half, the effect will start to show up? Yes. Understood. Thank you. Thank you. Let's move on to the next question, Mitsubishi UFJ Morgan Stanley. Mr. Uchino. This is Uchino. Thank you for this opportunity. Thank you. I have two questions as well. The first one, the first quarter Mitsumi actuator business China, so the business opportunities have been delayed. Could you elaborate on that? And the Q2 onwards, what is your outlook for China? That is my first question. I would like to respond. The actuators for China, according to our forecast, it should be doing great, but as I said in May, due to US China trade war, is, intensifying again. It's becoming more aggressive. So the numbers we expected were not realized initially Q1, we thought that it would improve that was our forecast, but actually the numbers did not turn out according to our expectation and a pop up motors for camera is in the same situation. But now the demand is coming back in August September probably volumes will increase. So in the latter half of Q2, we will probably see a recovery in volume. My second question is sort of a follow-up question to the other person, the production sites had to be that due to a US China trade war, because of this, a sector and you have even more expectations for Cambodia and is it going to be realized within this year the 4th round may trigger this issue of production sites So, actions regarding this year, if you could share with me. So, people are not completely believing it. So, the some companies have started to transfer production sites, but some others are not yet worried to that extent and we are getting various soundings So first come first served, not instead of, just grabbing any opportunity that, is presented in front of us because we have secured a space from many years ago, we would like to use it effectively instead of grabbing and jumping on any opportunity So at this point in time, I cannot say for sure that something like this will be installed in this month, something like that, but transfer of a production site is becoming a reality. I think you are formulating a plan at this point, but if things become even more aggressive and that may create a positive impact. Am I right at this point in time I cannot say yes or no, but the sense of speed a bit later, probably, that we will be required to be even more agile Thank you. So this ends the Q And A session. This brings us, the end to this 2 point conference. Thank you very much for your participation.