Registration No. 197201001376 (13022-A) (Incorporated in Malaysia)
SUMMARY OF KEY MATTERS DISCUSSED AT THE 54TH ANNUAL GENERAL MEETING HELD ON 14 JANUARY 2026 RESPONSES TO QUESTIONS FROM SHAREHOLDERS AT THE AGM QUESTIONS / COMMENTS RESPONSESWhat is the prospects for financial year 2026?
We are in the reliability test business and focus on providing reliable burn-in/test for electric vehicle (EV), healthcare, and critical mission markets.
What is it that the Company has such an attractive share price when it is making losses and the revenue are at the same level and the dividend payment is small?
The Group has performed well except for last year and despite this the Board decided that a dividend should still be paid to the loyal shareholders.
What is the mid to long term plan of the Company?
The Group is excited with the growth related to artificial intelligence (AI), data centers, EV that needs high power. With these structural changes in technology we believe that these businesses will grow bigger.
Do the Company does its own manufacturing or outsource it and are all the business located in Malaysia?
We provide burn-in/test services. Our customers outsource the reliability testing to us. We have operations located in Penang, the Klang Valley and in China.
What is the utilisation range of each KESM facility and the utilisation level for sustainable operations to make profit?
Depending on the flow of materials as it is cyclical, the Management is trying to keep it at a high level of utilisation.
At which stage of development is the high-voltage high-temperature (HVHT) platform and has it gone through the pilot qualification?
The HVHT is used for charging equipment and the business for these areas are coming on but the volume is shifting.
It is noted that there is no contribution from Infineon, so will the utilisation rate be higher in the new financial year?
Infineon is only one of our many customers therefore their impact on the Group's overall performance might not be much.
When will the system level testing (SLT) start contributing profit?
We have been doing SLT for a long time and we are seeing more business coming on and qualified by the customers.
When will the Company incorporate SLT and burn-in qualification?
The qualification process is long but we have customers working closely with us on this.
How much of the SLT will be qualified in FY2026?
It is difficult to say but we are dealing with strong customers and for the long term, so we will see the contribution over a period. Please note that the process also needs to be qualified but the material may not come until the customer sends it.
Is the Company doing wafer testing?
This is part of the SLT and the customers are sending the modules for testing and we are expanding beyond this.
Is Sunright's subsidiary rendering technology to the Group?
There is strong collaboration between the related companies.
Is there room for expansion at the Malacca facility?
This depends on the customer's requirements.
What is the percentage of contribution from the AI business
Last year was slow but this year we see a ramp of 20%-30%.
Last year the Board was optimistic but the Group made losses, so there is some concern. What were the areas that caused the losses?
The progress in the automotive market has been slow and took longer than expected and it was not growing fast enough. The Management then moved to AI-driven market for bigger activities and growth.
How much is the capital expenditure for the new wafer testing and what sort of revenue is expected?
Equipment that are old would need to be replaced and we spend between RM30 -50 million each year including investments in wafer testing.
How much of the Group's equipment has been written off or scrapped?
With newer and advancement in technology, there are obsolescence of equipment but in the past few years older equipment did not require impairment.
Who are our customers and will they decide to do their own burn-in and testing later?
We are the largest independent company specialising in burn-in and testing services in Malaysia. There is no stopping the customers to do their own burn-in and testing but they may find it not cost efficient.
It is noted that the workforce had declined from 1,600 to 871 employees and more than 55% are temporary workers, so is there a risk of not getting enough manpower?
The number of employees pre-Covid was above 2,000 and with the automation efforts which the Company has been farsighted to put in place years ago, the number of employees has reduced to 1,600.
The higher content of temporary workers is part of the Company's HR strategy to focus on maintaining a strong core workforce while using contract workers to stay flexible. This allows the Company to scale up quickly or reduce headcount during market volatility.
Earlier it was mentioned that there was delay in the automotive business, so which business will bring in the revenue?
For the AI business, we have the ISO27001 certification, so this will be the main contributor as the big players want to outsource the testing.
What is the loss in securities investment?
Our financial strategy is to keep a cash reserve and for better return we have invested the excess cash with a fund manager who has a mandate to invest in securities. The fund had done exceedingly well for several years except for last year we were hit by a fair value loss.
Is there a Board succession plan as many of the Board members are in the 70s or approaching 70?
The Board and the Nominating Committee are monitoring and we want to assure that our Management team are well below 70 years of age.
AI contributed 20% of the revenue in 2025, what about the automotive and data center business?
The balance 80% comes from a variety of components, i.e. networking, communication, automotive, etc.
For the wafer and SLT business, does it include advance packaging like the Taiwanese companies?
We do not provide packaging services.
The Dutch Government has taken over Nexperia, so will the multi-national companies shift from China to Malaysia?
We have operations both in Malaysia and China but we cannot be customer specific. However, we see benefits from both sides.
Does the Malaysian Government policy on completely-knock-down (CKD) incentives benefit us indirectly?
We don't do CKD directly but if it is SLT testing then we will be participating in that the value chain.
How many assets are fully depreciated but still operating and contributing to revenue?
Our equipment are depreciated according to the adopted depreciation policy. Should the depreciated equipment still contributing we have to upgrade and this increases the capital expenditure each year.
What is the return on equity and internal rate of return for new testers?
These are guided by the investment policies.
Would the US-China trade conflict impact the Group's revenue?
If the flow of companies come into Malaysia due to this conflict then we have a good chance of being a beneficiary of it.
What are the components of the other expenses as it is 50% of the revenue and why is this not a key audit matter (KAM)?
The breakdown in is note 8 of the financial statement.
A KAM is raised if there is significant judgement or estimates made by the Board and in this relation, the other expenses are actual expenses, so will not be raised as a KAM.
How long has Ernst & Young been auditing the company?
More than 20 years.
The revenue in 2024 and 2025 has mainly come from the testing business. Now you are focusing on wafer level testing and SLT, are the two the same?
The two are expanding services, new business and we expect they will start contributing this year.
NXP and ST Microelectronics are expecting recovery in the automotive inventory restocking, so this will benefit us?
The volatility is always there in the semiconductor industry.
Will Management see an increase in cost in the memory testing?
We are not involved in memory testing.
KESMI AGM 2026_Summary of Key Matters Discussed at 54
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KESM Industries Bhd published this content on May 19, 2026, and is solely responsible for the information contained herein. Distributed via Public Technologies (PUBT), unedited and unaltered, on May 20, 2026 at 02:20 UTC.
