Good day, everybody. This is Ivan Tsao speaking from AirTAC, and welcome to join this conference call.

Please let me brief our fourth quarter results and current market situation. The US-China tariff issue and the China government anti-involution policy are limited impact to our business.

Currently, for the recovery of the China economy, the importance of how the China government implement more policies to restore people's confidence, consumption confidence, is far greater than the impact of US tariffs. Pneumatic industry can sustain single-digit growth rate annually once there is no too severe non-economic issue.

By continuously developed new products and improving our brand image, we expect our annual revenue growth rate can be 10% higher than the industry growth. As pneumatic products support production line rather than in the end product, as long as customers launch new models or engage in production activities, there will be more demand for pneumatic.

Moreover, the impact of cross-strait or between China and Taiwan tariff agreement, we mean that ECFA, on our margins have subsided by the second quarter of 2025, and we can improving our OP margin to be better and better. On approved consolidated revenue for the fourth quarter of 2025 was RMB 2 billion and 64 million, a 21% growth year-on-year.

Gross profit was RMB 980 million, a 25% growth. Gross margin was 47.5%.

Operating income was RMB 645 million, a 35% growth year-on-year. Operating margin was 31.3%.

Net non-operating income was RMB 31 million, including 29 million of FX gain, 9 million loss on equipment disposal, which caused by replacing equipment to improve our production efficiency, and 7 million subsidy from government, 5 million of interest income, and 2 million of interest expenses. Income before income tax was RMB 675 million, a 34% growth year-on-year.

Pretax margin was 32.7%. Net profit was RMB 532 million, a 33% growth year-on-year.

Net margin was 25.8%. EPS for the fourth quarter of 2025 was NTD NT dollar 11.64.

Unapproved consolidated revenue for the whole year of 2025 was RMB 7 billion and 931 million, a 15% growth year-on-year. Gross profit was RMB 3 billion and 647 million, a 13% growth year-on-year.

Gross margin was 46%. Operating income was RMB 2 billion and 378 million, an 17% growth year-on-year.

Operating margin was 30%. Income before income tax was RMB 2 billion and 459 million, a 14% growth year-on-year.

Pretax margin was 31%. Net profit was RMB 1 billion and 941 million, a 13% growth year-on-year.

Net margin was 24.5%. EPS for the whole year of 2025 was NTD 42.

Revenue from top eight industry for the fourth quarter of 2025, the biggest one still was electronics, around 26% to consolidated revenue, is 17% growth year-on-year. Second one, battery was around 15% to revenue, 57% growth.

Auto was 10% to revenue, 31% growth. Packaging was around 9% to revenue, 16% growth.

Machine tool was around 7% to revenue, 17% growth. General machinery was around 6% to revenue, 16% growth.

Textile was 4% to revenue, 5% growth. Energy lighting or solar was around 3% to revenue, it's 15% growth year-on-year.

Revenue breakdown for the whole year of 2025: electronics was around 27% to consolidated revenue, it's 10% growth year-on-year; battery was around 14% to revenue, 84% growth; auto was 10% to revenue, 40% growth; packaging was around 8% to revenue, 9% growth; machine tool was 7% to revenue, 14% growth; general machinery was around 5% to revenue, 13% growth; textile was 4% to revenue, 5% decline; and energy lighting or solar was around 4% to revenue, it's 31% decline year-on-year. For current market situation, more and more customers are showing positive views on future demand.

We believe that the pneumatic industry demand has entered a recovery cycle from late of 2024. Even it may only be a gradual or moderate recovery, this duration of the recovery cycle may be longer than normal two years recovery period in past.

In addition, China government continue to release many stimulus policies and attempt to restore people consumption confidence. Some of them have improved their confidence and increased their end product consumption or capacity expansion.

Our shipment was better than our expectation in first quarter 2025, but just in line in second quarter of 2025 caused by the US tariff policies because some customers postponed their demand. However, the impact of such tariff issue had been diluted, and customers still need to improve production process automation and replace to pneumatic product.

The shipment from last September or September of 2025 to this moment have been better than our expected. As for the demand of various industry of pneumatic, the revenue of electronics industry grow by 10% as we expected in 2025, and so many customers say it could be a good year for electronics in 2026 because there could be more new model launch and spec upgrade in the year, and we expect we could have another 10% revenue growth from electronics in 2026.

Battery demand, government had announced its development guidance for EV and battery from late of 2024, and the shipment was better than our expectation in 2025. In addition, more countries have relaxed their restriction policies on Chinese players, and those players plan to expand their overseas capacity, also will increase their domestic capacity.

We expect we could have double-digit revenue growth from battery in 2026. Better revenue growth from automotive industry also could be expected in 2025, 2026, and we have improved our brand image on auto customers and enjoy better share gain from that.

Even the overall auto industry, especially for those ICE demand, still have not recovered significantly, we have had double-digit revenue growth rate for years, and we expect we could have double-digit revenue growth in 2026 from auto industry. Moreover, government stimulus policies for replacing old equipment to be new equipment can get subsidy from government still in the market.

Those traditional demand like machine tool, general machinery, packaging, textile still can enjoy positive revenue growth, and it's mid-to-high single-digit growth in 2025, and all of them still was better than our expectation. We expect those traditional demand can enjoy positive growth again in 2026.

Even we have some demand issue on solar or energy lighting in 2025, but the demand seems have warmed up from a decline of 20 decline of 46% in first half of 2025 to 15% growth in fourth quarter of 2025, and we also expect this industry demand still could be turned to positive growth in 2026 from solar or energy lighting. For the pricing, selective customers, selective items still have some pricing competition in pneumatic, but overall speaking, it still could be rational basically.

The increased material costs can be diluted or offset by our internal efficiency improvement. The OP margin still have to depend on revenue scale and capacity utilization rate.

Even we can improve our margin by launching more higher gross margin new items, improving our selling product mix, and continue to improve internal production efficiency to reduce production cost. We defined 100% capacity utilization rate based on working 24 days a month and 21 hours a day with two-shift system.

Current pneumatic capacity utilization rate is around 110%, and the inventory turnover days at end of 2025 was around 124 days, and the accounts receivable turnover days was also 124 days at end of 2025. For the demand development of linear guide, industry demand is still weak, and peers still keep aggressive pricing.

We have changed our pricing policy since third quarter of 2024 and also expand new sales strategy. Our shipping volume have been around 20% growth in 2025, but revenue numbers is still lower than our expectation.

We have asked our sales team to convince more customers and also expect the linear guide market overall demand will be better from 2026 because the linear guide demand cycle used to be around two to three quarters later than pneumatic cycle. When pneumatic began to recover from late of 2024, it could be better from fourth quarter of 2025 from linear guide demand.

Once the linear guide overall demand is warmed up, peers used to raise their selling price, and AirTAC will maintain the same price to increase the pricing gap lower than peers and persuade more customers to place more orders to AirTAC. Current linear guide capacity utilization rate is around 30%.

Gross margin is teens percent. The shipment quantity in past two years has higher than the output, and we continue to decrease linear guide inventory.

We have the opportunity to increase utilization rate in 2026. When we achieve 50%, 50% utilization rate, production gross margin could be around 30%.

Once we have 80% utilization rate, can support 40% gross margin from linear guide. Even 30%, 40% gross margin is lower than our existing pneumatic business, but we use the same sales team to do cross-selling, pneumatic and linear guide, and without too much additional OpEx, it still can improve our consolidated OP margins.

For the development of supporting semiconductors customers demand, based on our strategy, we had not developed product to support semi customers demand by end of 2024, but due to those product can enjoy higher gross margin and China government localization policies, we began to develop semi items from early of 2025 and scheduled to launch some items gradually from 2027. The current development progress is better than our expected, and we can gradually launch some spec to support semi demand from second half of 2026.

Based on past experience, used to take around one year for new product to have a better revenue contribution. Better revenue contribution maybe still have to wait to second half of 2027, even 2028.

We expect pneumatic industry can return to low single-digit growth in 2026, and we can have at least 10% revenue growth from pneumatic products plus the revenue contribution of linear guide. The shipment in this January has exceeded our expectation, and even we could have a monthly revenue record-high number in this January.

Even we are optimistic about market demand in 2026, due to the short lead time of pneumatic business, and we prefer to give a conservative guidance to the market at the beginning of the year. Annual revenue growth rate for the whole year in 2026 could be over 10%, an OP margin of 31%, a CapEx number could be NT$2 billion to NT$3 billion.

We have generated free cash flow for years, also have increased our cash dividend payout ratio from 35% in 2021 to 55% in 2025. It will be around 65% payout in 2026 and also could be higher in coming years.

It's my briefing, and should you have any questions, we can discuss it. Thank you.

Thank you, Ivan. That's pretty comprehensive.

Hi, everyone. Let's start the Q&A session now.

Please feel free to raise your hand on Zoom if you would like to ask live. Before we started taking question from the investor online, I would like to ask a few question first if I may.

Hi, Ivan. My first question is that regarding your business outlook in 2026, which is pretty good, and in 2025 for fourth quarter you delivered the record-high EPS number in the fourth quarter.

Just want to know your view on the overall 2026 seasonality. In the past, we've definitely seen that fourth quarter is a low season, but this time it's not.

Just want to know do you expect that in second quarter this year will still be the traditional peak season or you do believe that in the full year we will not see a very strong seasonality just like before? This is my first question.

Thank you very much.

Okay. Basically, more and more customers they think the demand could be better and better in coming months or coming quarters.

Our order book or shipment value in this January could be record high. Basically, we could be very optimistic of the demand in 2026.

Second quarter used to be the peak season for pneumatic, it still could be based on such rules for 2026. It's still too early to tell what's the growth rate will be in second quarter 2026, even next month, because Chinese New Year located on mid of February.

Every time when the location of Chinese New Year in mid of February, the demand seems a little fluctuated because some customers they used to let their employees have an early holidays and also let them back to their workshop a little late. Overall, we just can say once China government continue to release more stimulus policies, the demand still could be better and better in 2026.

Thank you.

Got you, Ivan. That's pretty clear.

My next question is regarding your linear guide business. You mentioned about linear guide business you expect that the overall demand to recover sometime in 2026, but should we expect or do you have any guidance on the revenue in 2026 just like what you did in the past few years or any target on the utilization rate will be good enough?

Thank you very much.

We are sorry to say we missed our linear guide sales numbers for years, and we still have our internal expectation or budget target, and maybe it's better not to give the linear guide numbers to the market this time. Our linear guide capacity not just support our customers, we still have internal linear guide demand to support our pneumatic product.

Once pneumatic product have a better demand in 2026, and we also expect we can convince more customers buy more linear guide from AirTAC, and the overall industry's demand still could be better in 2026. We expect we could have 50%, 50% utilization rate in second half of 2026, and we can improve our production gross margin to be better and approaching 30%.

Once we have a higher revenue number of linear guide in 2026, at beginning of the year we still have to suffer a little lower gross margin in first half 2026 because our existing inventory unit production cost still could be a little higher and gross margin just around teens percent. Once we have a higher revenue from linear guide, the impact of our consolidated gross margin still could be a little higher, but we continue to improve our internal production efficiency, and the gross margin still could be better than 2025 in 2026.

Got you, Ivan. That's pretty clear and looking forward to see the progress here.

We are open to the Q&A session right now. Everyone, again, please raise your hand on Zoom.

We will name your name, and please unmute yourself to discuss with Ivan. Before asking question, please speak out your name and the company name first.

Our first question will coming from Helen. Hi, Helen.

Thank you to unmute yourself. Thanks.

Sure. Thank you, Chao, for giving me the opportunity to raise a question.

Hello, Ivan. It's Helen from HSBC.

Happy New Year. Our first question is about the downstream verticals if we may, because you sound quite positive towards the 2026 outlook.

I was wondering if we can break that into different downstream verticals. What about auto?

Because auto capital expenditure has been quite strong, I would say, for almost 18 months now. Speaking from the past experience, the first half or the June this year, it might be going down.

Is that the case that you are looking from your side now? That's for the auto sector.

Number two is for the smartphone, because we have high expectations for smartphone as well for the second quarter orders. I was wondering, is that more coming in in the second quarter and will tune down more towards the third quarter?

How big is the impact of the smartphone for us this year? Thank you so much, Ivan.

Okay. Basically, for auto demand, most of the revenue growth could be supported by market share gain, especially from those ICE customers.

In past, so many ICE customers they have very deep brand image for pneumatic suppliers. Even we could have 20%, 30% pricing lower than international peers, but it's very limited to customers' total production cost.

Around 5, 6 years ago, the ICE sales volume is not good, some customers they start to have production cost pressure. It made a pretty good opportunity for AirTAC to support their demand from non-core production process.

We have pretty good, or double-digit revenue growth from auto industry for 5, 6 years, mostly coming from market share gain. Even the overall CapEx in 2026 will be slowed down from auto customers, but they still have spare set demand from auto.

We just gain more shares from those existing demand and still can support our auto revenue could be double-digit revenue growth in 2026. For smartphone, basically, even some end-brand customers will release some foldable spec, and we always tell to investors pneumatic just support customers' production process, not in their end product.

Whenever customers they have more new models launch and greater spec upgrade, they have to set up new capacity. Once they have any production activities, they still have to maintain or replace their existing old capacity to be new pneumatic demand.

Basically, 10% revenue growth from electronics maybe still not too aggressive for AirTAC. Thank you.

Thank you, Ivan.

Okay. Thank you, Helen.

Our next question are coming from Daisy. Daisy, yeah, you can unmute yourself.

Thanks.

Yeah. Ivan, thank you.

Actually, I have three questions. The first is that you just mentioned the recent order book and the shipment value actually reached the record high, but you only have 10% of revenue growth.

Is that too conservative? The second question is regarding your market share of the pneumatic products in 2025, and how's the comparison with SMC?

The last question that you mentioned that you are going to launch the semi-related products in the second half of this year, maybe we are going to see some revenue contribution, and could you give us some estimation for the revenue contribution next year from semi side? Thank you, Ivan.

Thank you, Daisy. Basically, pneumatic is very short lead time business, and we used to give a very conservative guidance to the market at beginning of the year.

I say the guidance for revenue growth for 2026 is over 10%, but how higher it will be still depends. Our internal percentage could be higher than this number, and maybe we can raise up our guidance quarterly in next couple quarters.

So 10% over 10%, over 10% revenue growth rate for 2026 just a number for you. For SMC, basically, we release different sales strategy on different region to compete with SMC, and we still have pretty good progress to get more shares from the market.

Basically, SMC, as we know, they still have revenue growth in China market in 2025, but maybe just not that high as AirTAC did. For semi revenue, basically we say we can launch semi items from second half of 2026, but whenever we launch new items used to take around one year then have a better or obvious revenue contribution.

We say maybe from second half 2027 or 2028, we could have much higher revenue contribution from semi customers. Current revenue from semi customers just around RMB 5 to 6 million monthly.

Maybe by June of 2027 still could be such similar number. In second half 2027, it could be a little higher and higher, but it's still too early to tell what's our expectation for the whole year revenue in 2026 sorry, 2027.

The whole year semi revenue for 2027 is still too early to tell, even we have some number internally. Thank you.

Very clear. Thank you, Ivan.

Oh, hello. Hi, Ivan.

Thanks for the presentation. I'm Angela coming from Citi Research.

Congrats on the strong result and outlook. My first question is about the fourth quarter gross profit margin.

Can you share with us what are the key driver for the strong fourth quarter gross profit margin? Also, is it sustainable?

The second question is about your guidance for 2026 OP margin, which is around 31%. Is it driven mostly by better leverage on OpEx or is it driven by GP margin expansion?

Thank you.

Yeah. Basically, we have good numbers for fourth quarter gross margin maybe still contributed by our internal production efficiency improvement, and we have find some new ways to improve efficiency.

Basically, such contribution still can sustain it to 2026 and next couple years. What's your second question?

Second question is about the guidance of the OP margin of 31% for '26, and is it driven by better leverage on OpEx or is it driven by gross profit margin expansion?

Maybe both of them, because we still can continue to find more ways to improve our internal production efficiency and also can offset the higher material costs currently. Revenue scale still could have a better fixed cost leverage of OpEx.

You can find our OP margin in fourth quarter have been around 31.3%. It still included long national holidays in October.

Basically, maybe it's not difficult to sustain 31% OP margin for the whole year of 2026, even could be higher.

Got it. Thank you, Ivan.

Congrats on the strong result. Thank you.

Thank you.

Thank you, Angela. Our next question will coming from Jason.

Jason, you can unmute yourself. Thanks.

Hi. Good afternoon, Mr.

Ivan. This is Jason Luo from the First Capital Management.

My first question is about the future of the China market. I think many analysts concern about the involution policy, such as in the auto sector, the decrease in the subsidy, and for the electronics sector, we see a decrease in the PC or laptop market in 2026, and for the battery, we see some maybe restrict policies.

Have you seen our clients be more conservative? If not, what's the driver for our revenue growth in these three sector in 2026?

That's my first question. Thank you.

Basically, I don't know what's your information got from, and basically, information from our customers, especially for battery, they still pretty optimistic and also try to expand their capacity aggressively. The overall demand for pneumatic from battery still could be higher in 2026 than 2025, but just the base.

2025, we have low base in 2024, we have 80+ percent revenue growth from battery industry. High base for 2026, we just expect double-digit, but still could be 30, even could be higher than 30% revenue growth from battery.

We think anti-involution in China market in past couple months, maybe it could have short-term impact for demand, but basically, it could improve the transaction orders for the China market. It's good to mid-to-long term.

Basically, pneumatic is not just a CapEx component, also is a consumable product have replacement demand. In past 20 years, every two years we have upcycle, and then two years downcycle.

This time, the demand was decelerated from late of 2021 and just a little better from late of 2024, almost around 3 years. Some customers they just spend what they have to spend in past 3 years.

Once they want to improve their automation level or improve their production efficiency, they still have to improve automation level, and they need more pneumatic. It's the basic thing for our guidance for 2026.

Thank you.

Okay. For the detail, I'd like to know for the auto sector, our clients, they are major in the traditional ICE vehicle or also we have the customer in the new EV or PHEV sector?

Thank you.

Basically, ICE customers they have deep brand image for pneumatic suppliers, and because their company history could be much longer than AirTAC, and EV customers, EV brand customers, most of them could be young company. Their brand image for pneumatic suppliers is not that high as ICE customers.

It's easier for AirTAC to convince EV customers buy pneumatic from AirTAC. We could have a higher market share in EV than ICE demand.

Okay. Thank you.

My last question is for the expense value in 2026, is that be maybe 1.3 1.3 1,300 million every quarter in 2026 or maybe it's follow 17% follow revenue? That's my last question.

Thank you, Ivan.

You mean OpEx?

The OpEx value. Thank you.

Basically we spend what we should spend and not a percentage to revenue or any index. Basically, once we have a better revenue scale, we can enjoy better fixed cost leverage, especially for OpEx.

Variable OpEx could be selling expenses and bonus to our sales team. Our bonus plan to sales team is based on revenue growth rate, OP margin numbers, and budget achievement.

It's flexible. R&D expenses or administration expenses, it could be fixed cost basically.

Once we have a better revenue scale, the OpEx percentage still could be lower.

Thank you, Ivan. Have a nice day.

Thank you. You, too.

Hello, Ivan. Could you hear me?

Yes, please.

Yes. It's Kenny from Nomura, and thanks for taking my question.

Congrats on the very good Q4 results. I have two questions.

The first one is I want to go back to fourth quarter. Correct me if I'm wrong, we were targeting a flat quarter-on-quarter sales for the fourth quarter 2025, but it turns out it's much better than we thought.

Could you please provide a little bit color on which and application you saw were better than expected and whether they are carrying that momentum into first quarter?

Basically, electronics is better than our expectation, and some customers, some electronics customers they will wait and observe the development situation of the US tariff and also postpone their demand from second quarter to maybe August. It's just around mid single-digit growth in first three quarters from electronics, but it's teens percent growth in fourth quarter.

The shipment or revenue from electronics is better than our expectation, and also from those traditional demand, textile, machine tool, general machinery, or packaging, also is better than our expectation in fourth quarter of 2025.

Okay. Sure.

Thanks. Based on your strong January order book, I can assume the momentum at least be carried on to the first quarter.

Is that correct?

Basically, it's correct. What we mentioned earlier, the Chinese New Year holiday located in mid of February, and it still have a little higher uncertainty whenever the location of the Chinese New Year holiday in mid of February.

Just the revenue is higher or lower, but we still believe we could have a pretty good revenue growth rate in first quarter of 2026.

Right. Very helpful.

Thank you. I have a follow-up on the semiconductor equipments.

Could you provide a little bit more color on the first launch of your new products in second half of this year? It could be mid-to-high end already, or how do you just maybe categorize the semiconductor pneumatic equipment?

Do we do start from those entry-level or we can easily go to mid-to-high end? I assume it's very complicated, I want to understand how you can upgrade your products over time.

Basically, to develop semi items is not difficult to AirTAC, and we still will start this business from back-end customers, but it doesn't mean we just can support back-end customers' demand. We still will launch more items to support from low end, mid end, and even high application gradually in coming years.

Okay. Thank you.

Very helpful. Thank you again, Ivan.

Thank you.

Okay. Thank you, Kenny.

Our next question will be coming from Bill. Bill, you can unmute yourself now.

Thanks. Okay.

Bill is offline right now, we have Jeremy. Jeremy, you can unmute yourself right now.

Thanks.

Thank you very much. Thank you for the opportunity.

I just had kind of two small questions. The first question is, it sounds like you still have quite a decent momentum right now.

What would you say you think will be your biggest risk for 2026?

China government policies.

Okay. Meaning it might be maybe delayed, it might not come as fast as expected, is it?

We expect government can continue to release or launch more stimulus policies, and how long it will last or how strong it will be still depends on government.

Okay. One small, kind of housekeeping question, because I couldn't really hear one number earlier on in your presentation.

Your auto-related revenue in the fourth quarter was 31% year-over-year growth, and how many percent of total revenue?

You mean consolidated revenue or auto revenue?

Auto revenue for fourth quarter, how much?

10%, 10% to consolidated revenue from auto, and 31% growth.

Okay. Got it.

Okay. That's all for me.

Biggest risk is government policies. Okay.

Got it. Thank you.

Thank you.

Thank you, Jeremy. We have Bill on the line right now.

Bill, you can unmute yourself and start to ask question. Thanks.

Thank you, Chao. Hey, Ivan.

This is Bill from JPMorgan. I have two questions.

Can I have the inventory days as of fourth quarter? Given you have very strong order intake in January, do you plan to further raise up your utilization rate in first quarter and second quarter?

Second is for the cycle of the linear guides. I think in the past, usually when AirTAC shows some recovery sign, linear guide demand will coming up maybe 2 to 3-quarter lagger.

If you look into the competition landscape in China, in recent years, we are seeing more competitors enter the linear guide business. For this round of the linear guide demand recovery, apart from the cyclical view, is there any indicators you think can point to a better growth of the linear guide business?

Because if you look into 2025, actually revenue already grow pretty good, but the linear guide demand still weak.

Okay. Basically, 110% utilization rate for pneumatic is good enough, and we still can support the shipping volume growth in 2026.

For linear guide, basically, linear guide is a CapEx component. It's not like pneumatic with CapEx demand and component replacement demand.

It's a little difficult to find index for linear guide demand basically. Even we expect the linear guide demand will be better or recover from 2026, and it's still too early to tell peers will raise their pricing or not.

Basically, we still can convince more customers AirTAC linear guide is good enough. And 2025, even in such low demand environment, we still have 20+% volume growth.

Once we spend more time to convince more customers AirTAC's good enough, and we believe we still can enjoy pretty good volume growth in 2026. Got it.

Thanks, Ivan. That's all my question.

Thank you. Thank you, Chao.

Thank you.

Thank you, Bill. Our next question will coming from Eric.

Eric, you can unmute yourself. Thanks.

Hello,

Ivan. Can you hear me?

Yes, please.

Okay. Thank you so much for the briefing, and it's great to hear that you're getting more positive for the outlook.

I'm just curious about we have noticed that China has recently tightened the subsidy standards for new and energy vehicles and consumer electronics. Could you comment on whether these changes have affected your expectations or guidance for 20 for the 2026?

Thank you.

Okay. Basically, based on past experience, once government want to encourage specific application, even the existing or old policy have been terminate, they still will launch another new policy to support such application or demand.

Our main revenue growth from auto basically is coming from market share gain. Our market share in total China pneumatic market in China could be around 30%, but our market share in China auto industry just around teens percent.

Still have so much addressable market to gain more shares from China auto and support our revenue growth. Thank you.

Okay. Thanks, Ivan, and thanks, Chao.

Thank you, Eric. Ivan, I would like to ask one question if I can.

You just mentioned for the dividend in 2026, it could be probably around 65%, and it's up from a very low level in the past few years. I just wondering in terms of the capital allocation, don't you really find any new investment target in the core business side, for example, investing in more capacity in pneumatic or linear guide or even for the electric actuator versus that you decided to just pay out for dividend?

How should we think about the ROI for this kind of new business or invest in existing capacity? Thank you.

Okay. Basically, in past 3 or 4 years, we spend some CapEx to improve our equipment productivities.

Some equipment, the output volume could be around 20% higher than 4 or 5 years ago. Even we have slowed down our CapEx number from 2023, but our product capacity or output volume still can support our revenue growth or shipment volume growth by teens, even double-digit.

Basically, we have been net cash for 2 years, and low CapEx, higher payout ratio won't affect our business in coming years. We say in 2026, even 2027, our CapEx just could be around NT$2 billion to NT$3 billion.

We still continue to develop electrical actuator product or business, and maybe we will set up new capacity to support electrical actuator parts manufacturing in 2028 or 2029. Even we will increase such new business capacity, the CapEx could be NT$3 billion or a little more than NT$3 billion.

It won't be NT$4 billion, NT$5 billion as our peak CapEx period. Basically, higher payout ratio won't affect our business development in coming years.

Thank you.

Thank you, Ivan. That's super clear.

That's my last question regarding the market share target for pneumatic, linear guide, and electrical actuator in the long term. Do you have these kind of target on your hand or any target you can share with us on these three business segments?

Thank you.

Basically, we expect we could have RMB 9 billion, even a little higher than RMB 9 billion revenue from pneumatic by end of 2030, and linear guide still could be RMB 3, 4 billion, RMB 3 to 4 billion in around 10 years. We have another new business, electrical controller, and maybe to achieve RMB 3 billion in around 10 years won't be difficult to AirTAC.

It's still too early to tell electrical actuator revenue number, even electrical actuator can support robotic arms or humanoid demand directly, but it's still too early to tell. Thank you.

Got you. Thank you, Ivan.

Given the interest of time and Ivan's already very comprehensive introduction of the company's fourth quarter and result and the guidance outlook in 2026 and beyond, I would like to conclude the call here. Thanks for everyone to join this call, and thank you, Ivan, and congratulation for the fantastic fourth quarter and good 2026 guidance.

Yeah.

Okay. Thank you, Chao, and thank you, everybody.

Have a good day.

Okay. Bye-bye.