1HFY24 Financial Performance

• Revenue Growth: Achieved a 2.4% year-on-year increase in revenue, reaching S$174.6 million, driven by higher contributions from the PRC market and the full-scale revenue streams from the three mini-hydropower plants.  
   
• Gross Profit: Recorded a gross profit of S$44.4 million, although this was a 2.6% decrease compared to the same period in 1HFY23, with a gross profit margin of 25.4%.The Gross Profit Margin was down from 26.7% in the 1HFY23. This decline was primarily due to a shift in the revenue mix away from higher-margin sectors like electronics and semiconductors, as well as increased competition in these areas.  
   
• Net Profit: Reported a net profit of S$5.8 million, a 35.9% decline from the first half of 2023, primarily due to increased administrative expenses and finance costs.

Manufacturing Capabilities:

• Precision Machining: Produces High-quality Components Like Linear Motors and Precision Gearboxes.
   
• Metal Injection Molding: Specializes in High-specification Components for Various Industries.
   
• Stamping & Die Casting: Creates Durable, Precise Metal Parts.
   
• Product Assembly: Ensures Seamless Integration of Components Into Final Products.
   
• Systems Engineering: Provides Design, Engineering, Production, and Integration Services.
   
• Motion Control Solutions: Offers a Full Range of Solutions From Design to After-sales Service.
   
• Industrial Automation and AI Solutions: Integrates IoT sensors, real-time data analytics, and machine learning.
   
• Renewable Energy Solutions: Invests in projects like minihydropower plants.
   
• Maintenance and Equipment Reliability: Regular maintenance to prevent disruptions and ensure consistent production.

Risks: 

DBS has noted that the company faces cyclical risks in the semiconductor industry, potential foreign currency fluctuations (USD, RMB, CHF, Euro), and its operations are subject to prevailing government policies, which can affect business operations and licensing, particularly in the PRC where a significant portion of its revenue is generated.

Company Overview

• ISDN’s core business focuses on three main areas Industrial Automation Solutions, Manufacturing Capabilities, and Clean Energy Solutions.
   
• This includes providing advanced automation solutions, including precision components, engineering services, and integrated systems, and producing in-house products like linear motors and precision gearboxes, and offering specialised metal injection moulding.
   
• It is now investing in mini-hydropower plants and offering engineering solutions for renewable energy projects.

Headquarters and Facilities:

The headquarters and the principal place of business is located in Singapore. In China, ISDN has multiple locations, including an expanded facility in Wujiang. ISDN also has significant operations in Southeast Asia, with facilities in Malaysia and renewable energy projects in Indonesia. Additionally, ISDN supports regional operations from its facilities in Hong Kong and Vietnam. Across all these Asian Growth markets ISDN employs close to 1,200 people.

Market Position and Achievements:

• 20+ years of unbroken profitability
   
• Extensive Customer Base: ISDN serves over 10,000 customers across various advanced industrial sectors, including semiconductors, Industry 4.0 manufacturing, medical devices, aerospace, and clean energy.
   
• ISDN neither lost any market share in Southeast Asia nor any semiconductor customers in FY23.

Strategic Positioning and Future Outlook:

• Expanding Capabilities in Industrial Automation: ISDN enhances its technical expertise in industrial cloud, AI, and software, providing integrated “full stack” solutions to customers. This positions the company as a leader in delivering advanced industrial automation solutions.
   
• Industry Partnerships: ISDN has entered into strategic partnerships to enhance its capabilities and market reach. For example, ISDN partnered with Whizpace to deliver Industry 4.0 solutions to wide-area industries.
   
• Investing in Renewable Energy: The company has fully commercialised its mini-hydropower plants, generating quality recurring income and supporting sustainable industrial practices, this strengthens ISDN’s commitment to sustainability and diversifies its revenue streams.
   
• Focusing on Market Share Growth: Despite cyclical downturns, ISDN has maintained and even grown its market share in key regions like China. The company continues to invest in its capabilities and market presence, ensuring long-term growth and competitiveness in the industrial automation sector