Benjie Keda (01665.HK)'s first half fiscal year was relatively out of color. Its total revenue was approximately RM340 million, similar to the same period last year. Automated inspection equipment business decreased by 45.1% year-on-year, offsetting an increase of 1.4x in factory automation solution business. At the same time, the Group's gross margin declined again due to the decline in some R&D costs and the business scale effect of automated inspection equipment, leading to a 12.8% and 13.5% drop in the Group's net profit for the first half of the fiscal year and the second quarter compared to the same period last year.

Stable revenue contributions from major medical customers: Thanks to stable contributions from major medical customers, revenue from the medical business segment reached RM160 million in the first half of the fiscal year. Despite a decline in the financial forecasts of major medical customers, their investment plans and order visibility were not significantly affected, bringing a more ideal outlook for the Group Healthcare Business Division. Compared to focusing on the future growth engine of the medical business segment, the Group began i) delivering equipment models to medical technology customers, ii) delivering small quantities of single-use medical devices to customers. We expect that in the future, the group will be able to obtain more orders from other medical customers, and at the same time, single-use medical devices will bring more significant contributions in fiscal year 2025.

It is still too early to say that the rest of the business is recovering: benefiting from sales of testers used in ambient light sensors and proximity sensors, the Group's electro-optic business division grew by 26.2% year-on-year in the first half of the fiscal year, and the optimization of terminal product technology is expected to drive the further growth of this business segment. The semiconductor business segment and automobile business segment declined by 63.2% and 51.8% year-on-year in the second quarter, dragging down the Group's overall financial performance. Participants in the semiconductor industry maintain a conservative attitude, and we expect the Group's semiconductor business division to remain relatively stable. Conversely, the recovery of the Group's automotive business division is slower than expected. Since the industry has not improved markedly, we need more clues to confirm that the business can bottom up. The trade barriers between the US and Europe are likely to become more clear in the fourth quarter, which is expected to bring more orders to the group, while the KGD test rules are expected to bring initial revenue to the group in fiscal year 2025.

The recovery was hampered by macro factors: orders for Benjakeda (01665.HK) remained stable in the second quarter, and its financial performance was slightly lower than our expectations. We revised our profit forecast for Panjakeda (01665.HK) and lowered the target price to HK$0.95 per share to reflect a similar second-quarter expression. At the same time, based on our belief that recovery was delayed only by macro factors, we maintained a longer-term profit forecast for the Group. In addition, new products such as KGD testers and single-use medical devices are also expected to bring potential benefits to the Group in fiscal year 2025, so we reaffirm our commitment to the Group? buy? ratings.