Hirano Tecseed (6245 JP)
A Fabless Maker Specialised in Coating Technologies

02 AUGUST 2023
NIPPON INVESTMENT BESPOKE RESEARCH UK LTD
London, UKP age |1
CONTENTS
HT’s technology core competences and business model strengths and risks ............................................................. 2
Technology core competences .................................................................................................................................2
Strengths and Risks of HT’s business model .............................................................................................................2
Strengths ............................................................................................................................................................... 2
Risks .......................................................................................................................................................................3
Understanding HT’s cash flow .................................................................................................................................. 3
Recent earnings ............................................................................................................................................................3
FY22 results ...............................................................................................................................................................3
Orders and Order Backlog.........................................................................................................................................4
Performance by Segment .........................................................................................................................................5
Sales by Application ..................................................................................................................................................5
FY23 Outlook .............................................................................................................................................................6
long-term vision 2030 ...................................................................................................................................................8
Vision and Target ......................................................................................................................................................8
Capital Allocation Policy ............................................................................................................................................8
TSE’s PBR1x Argument ..............................................................................................................................................8
Financial Summary........................................................................................................................................................9
General disclaimer and copyright ............................................................................................................................... 11

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HT’S TECHNOLOGY CORE COMPETENCES AND BUSINESS MODEL STRENGTHS AND RISKSTechnology core competences
Hirano Tecseed [HT] is a machinery maker specialised in coating, laminating, drying, heat treatment and line control
technologies. A coating machine is used to place thin liquid coating on materials such as films, metal foil, paper,and fabric. Once the liquid is dry, the machine then rolls up the coated materials for easy transport. Currently, HT’smachinery is mainly used in electrode coating for secondary lithium-ion batteries [LiB], often called rechargeable
batteries, used in electric vehicles [EVs], and electronics materials such as multilayered ceramic capacitors [MLCCs]
used in various devices such as smartphones.
A primary battery is a portable voltaic cell that is not rechargeable, whereas a secondary battery is a portable voltaic
cell that is repeatedly rechargeable. According to the International Energy Agency [IEA], the +65% YoY growth inautomotive-use LiB demand – from 330GWh in 2021 to 550GWh in 2022 – was primarily due to growth in electricpassenger car sales, with new registrations increasing by +55% YoY in 2022.
The auto industry is shifting away from the use of nickel-metal hydride batteries and lead-acid batteries to LiBs as(1) they have the highest energy density among secondary (rechargeable) batteries and (2) LiBs can be smaller insize but still produce high output. According to Fuji Keizai, demand for xEVs applications is growing due to increased
demand for EVs. In 2025, the market is forecast to be worth approx. ¥12.3trillion. xEV applications are expected tocontinue to drive the market, as automakers continue raise their EV sales targets, bolstered by the launch new EV
models.
HT’s technological core competences lie in 1) coating and line control, and 2) heat and circulation technology. The
firm has mainly two segments, categorised based on base materials that are processed by its machine. Those are:
1. Coating and Laminating Machinery Segment: Here, the coating machinery process is for coating basic materials
such as film, sheet, paper, metal foil. The largest proportion of sales are generated from electrode coatingmachines for secondary LiB batteries for EVs.
The coating machine market was a niche market, however, due to the growing use of LiBs in EVs, demand forelectrode coating equipment – that offers faster speed and functionality – is on the rise. HT estimates that thecurrent size of the LiB electrode coating equipment market is around ¥200~300bil. In the past, HT had approx.
20~30% market share in this market with sales of ¥20~25bil, however, due to the market growth, the firm’s
market share has likely contracted.
2. Industrial Machinery Segment: This segment includes polymer chemical machinery to coat materials such as
non-woven fabric (e.g., diapers), glass fibre, carbon fibre, composite materials, glass substrate, and other new
materials.
Strengths and Risks of HT’s business model
Strengths
 Customised products
HT develops coating machines that are tailored to each customer’s unique needs. Therefore, having close andtrusted ties with its customers’ R&D departments is key to the firm’s ability to design and create machinery tomeets those needs. HT established a technology demonstration centre, Technicum, which operates R&D to
support its customers’ product development. At the site, HT runs testing facilities of a similar scale to its
customers’ own production facility.


Fabless maker
HT is practically a fabless maker; hence its main function is to capture customers’ unique coating requirements,
in its designs. Once agreed, the firm’s subcontractors are engaged to manufacturing the custom-designed
product. Many of HT’s subcontractors are based overseas and handle the bulk of the manufacturing processes.
If the order to delivery progresses smoothly, the fabless business model will likely produce favourable
profitability.
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Risks
 Cash flow
In FY18, HT generated an OPM of 14.8%. However, during the pandemic, the weakness in HT’s fabless businessmodel became evident. Lead times between submitting a quote to a customer, receiving an order, and final
delivery was extended during the pandemic due to supply chain disruptions. Due to obligations under the Act
on the Prevention of Delay in Payment to Subcontract, the firm pays subcontractors within 60 days post delivery.
The supply chain disruptions, however, caused customers to change their delivery locations. Subsequently, thisled to delays to the progress of the production process and affected earnings in FY21~22.
Understanding HT’s cash flow
The aforementioned delay in the progress of production caused HT’s FY22 free cash flow [FCF] to fall to -¥10,159mil
from ¥2,300mil in FY21, and the order backlog surged to a historical record level of ¥79,906mil (+16.1% YoY). Whilst
a high level of order backlogs suggests stable future cash from operations, frequent changes in customers’
requirements will impact cash flow generation.
The problem with HT’s business model is an imbalance between the turnover in sales receivable and accounts
payable – where the firm pays its supplier and subcontractors within 60days, while HT receives revenue on
percentage of progress basis over the course of 2~2.5 years. Hence, sales receivables in the current account on thebalance sheet [BS] is not a current asset since nearly 90% of the sales receivable – the fee that HT agrees with acustomer at the time of order placement – is a contract asset.
The order process is as follows:
1. Submit a quote to a customer,
2. Once agreed and an order is placed, the entire budget is fixed at a certain price. Here, HT books the total amountof the “order”. Thereafter a proportion of the work-in-progress completed recognised as sales (contract asset)
in each year until the project is completed,
3. HT allocates production to its subcontractors,
4. Final assembly, installation and inspection takes place. At this point, the remaining order backlog will be moved
to the sales account on the P&L. On the balance sheet, contract assets equal to the order backlog will be moved
to the sales receivables account.
RECENT EARNINGS
FY22 results
Hirano Tecseed reported FY22 OP of ¥3,093mil (-22.4% YoY) on sales of ¥42,423mil (+12.0% YoY). While sales
improved, OP fell due to the continued shortage of materials, especially electronics parts, which led to delayed
shipments and a surge in material prices. Declines in productivity, together with surging material costs, resulted inHT’s gross profit margin [GPM] contracting from 18.6% in FY21 to 15.7% in FY22. SG&A rose +16.8% YoY, due to anincrease in sales commission to distributors, leading to OPM declining -3.2ppt YoY to 7.3%.

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Hirano Tecseed (6245 JP): Earnings Summary and Guidance(¥mil)

FY21

FY22

1H

FY

Sales

18,605GP
GPM (%)
SG&A

FY23 CE

1H

FY

YoY (%)

1H CE

FY CE

YoY (%)

37,866

18,27042,42312.0

19,00041,000

-3.4

4,155

7,056

3,012

6,679

-5.3

N/A

N/A

N/A

22.3

18.6

16.5

15.7

-2.9ppt

N/A

N/A

N/A

1,434

3,070

1,515

3,585

16.8

N/A

N/A

N/A

7.7

8.1

8.3

8.5

+0.4ppt

N/A

N/A

N/A

OP

2,720

3,986

1,496

3,093

-22.4

1,040

2,920

-5.6

OPM (%)

14.6

10.5

8.2

7.3

-3.2ppt

5.5

7.1-0.2ppt

RP

2,789

4,122

1,557

3,219

-21.9

1,100

3,000

-6.8

SG&A/Sales (%)

RPM (%)

15.0

10.9

8.5

7.6

-3.3ppt

5.8

7.3-0.3ppt

NP*

1,988

3,103

1,078

2,243

-27.7

750

2,100

-6.4

EPS (¥)

132.0

206.1

71.6

148.9

-27.8

49.8

139.3

-6.4

Source: Nippon-IBR based on Hirano Tecseed's results presentation material* NP attributed to the parent's shareholders

Orders and Order Backlog
While the overall order trend remained strong, thanks to rising CAPEX in the EV and electronic parts sectors, thefall in productivity led higher order backlogs. This restricted the firm taking more orders, and led to FY22 orders
declining -26.3% YoY to ¥53,494mil.
Productivity was also affected by customers changing the shipment location, delivery times, the specification ofparts and components. Consequently, HT had to readjust its production schedule and put production lines on hold.
As a result, the FY22 order backlog rose +16.1% YoY to ¥79,906mil – during which the order backlog reached ahistorical record of ¥93,482mil in the Q2.

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Performance by Segment
HT has three business segments, of which two – the Coating and Laminating Machinery segment and the Industrial
Machinery segment – together generate 96.5% of consolidated sales and 98.0% of consolidated OP. Consolidated
sales can also be divided by applications.


Coating and Laminating Machinery Segment:
FY22 segment OP fell -29.0% YoY to ¥1,985mil on sales of ¥31,179mil (+17.5% YoY). While domestic sales
declined -5.6% YoY to ¥2,327mil, exports increased +19.9% YoY to ¥28,851mil. The largest component of thissegment is electrode coating equipment for secondary LiBs. (We discuss this further below.)
The main reason for the deterioration in the OPM, from 10.5% in FY21 to 6.4% in FY22, was a change in thesales mix due to an increase in LiB electrode coating equipment sales. Due to delays in production progress on
the back of supply shortages and changes to specifications by customers, final project completion times were
delayed. In addition, higher costs (subcontractors / materials) were incurred.
Given HT pays its suppliers and subcontractors within a month or receiving an order, delays in revenue
recognition were extended to as much as 12 months. As a result, the Coating and Laminating Machinery
segment order backlog surged +28.6% YoY to ¥68,912mil – the equivalent of almost two years of segment sales.
Sales are recognised based on the percentage of completion method. As a result, any delays to the production
process will be reflected in order backlog and contract assets on the BS.

Industrial Machinery Segment:
FY22 segment OP rose +6.3% YoY to ¥2,069mil on sales of ¥9,774mil (-2.2% YoY). Sales are further split into
domestic sales of ¥3,363mil (+24.6% YoY) and exports of ¥6,410mil (-12.2% YoY). Segment growth was led byrising demand for deposition equipment that is mainly used in electronic materials applications such as MLCCs
and forming polyimide film. FY22 segment orders slumped -62.7% YoY to ¥4,757mil and the order backlog
declined -34.0% YoY to ¥9,750mil. Orders for MLCC-related polyimide film deposition equipment were halved,
due to strong orders during FY20 and FY21. Order trend for polyimide film deposition equipment is volatile year
by year, hence YoY decline in FY22 order was not a surprise.

Sales by Application
HT’s sales can be further divided by applications for which the firm’s machinery is used in the manufacturing process.
There are four categories of applications: energy related, electronic materials related, display related, andhousehold-related products. The two largest applications for which HT’s machinery is deployed are as follows:Energy-related Applications:
Energy-related application earns 80.3% of Coating and Laminating Machinery Segment / 59.0% of FY22
consolidated sales. Sales are solely generated from electrode coating equipment for LiBs in EVs.
In FY22, sales of the LiB electrode coating equipment rose +18.4% YoY to ¥25,048mil. However, profitability ofthe equipment is lower than other applications, due to the aforementioned issues – components shortage andcustomers’ modifying their orders, which led to fall in product efficiency.
Furthermore, price negotiations with battery makers that supply to the auto sector are tough. As a result, thesales mix of the Coating and Laminating Machinery segment deteriorated in the OPM from 10.5% in FY21 to6.4% in FY22, as sales from electrode coating machine increased. Also, order backlog of the Coating and
Laminating Machinery segment surged +28.6% to ¥68,912mil, most of which is order backlog of LiB electrodecoating equipment, and represents the equivalent of almost two years’ worth of segment sales.

Electronic materials-related Applications:Electronic materials related applications are for 1) high-precision coating for electronic components includedin the Coating and Laminating Machinery Segment, and 2) film making systems, such as high-precision thickfilms, drying control technology and cleaner film processes for the ceramic sheet forming lines that can output
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02 AUGUST 2023

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Hirano Tecseed (6245 JP): Segment by Application (Quarterly)
FY21(¥mil)

FY22

Q1

Q2

Q3

Q4

FY Total

Q1

Q2

Q3

Q4

FY TotalYoY (%)

Display - related

1,636

1,321

596

150

3,704

662

1,144

1,223

783

3,815

3.0

Electronic materials-related

2,579

1,413

1,622

2,155

7,770

2,123

2,005

2,495

1,579

8,203

5.6

Household product-related

296

195

250

313

1,056

256

108

168

157

690

-34.7

Energy- related

3,464

5,687

5,383

6,613

21,150

5,036

4,517

6,861

8,633

25,048

18.4

Other

870

1,139

1,107

1,066

4,184

1,147

1,268

1,208

1,041

4,666

11.5

Total

8,847

9,757

8,961

10,29937,866

9,226

9,044

11,95812,19442,42312.0

Source: Hirano Tecseed

FY23 Outlook
HT is guiding for FY23 1H OP of ¥1,040mil (-30.5% YoY) on sales of ¥19,000mil (+4.0% YoY) and FY23 OP of ¥2,920mil(-5.6% YoY) on sales of ¥41,000mil (-3.4% YoY). The firm’s order backlog is at an historical high level, supported byan active order environment, particularly in energy-related applications. As well as aiming to promote further
delivery management and productivity improvements, while also keeping a close eye on customers' CAPEX trends,
HT is looking to capture new market demand to ensure growth over the medium to long term.
However, HT expects FY23 OP, especially in the 1H, to be negatively affected by high raw materials and energy costs,
and that full-year sales will likely see weaker YoY growth due to a rising number of equipment specifications
adjustments – such as changes in delivery location which results in different requirements – which will lead todelays in delivery.
With the order backlog at record levels, the average lead time from the customer exchanges the order contract tothe equipment delivery (installation) currently takes between 2~2.5 years. Some 80% of the current order backlog
is made of orders received in FY21. Currently, HT is in a position not to drastically increase orders without risking
longer delivery cycle.
Since orders for LiB electrode coating equipment rapidly surged in FY21, the firm’s requirement for working capitalreached approx. ¥10,100mil to satisfy the level of production. Because of this, HT is trying to receive advancepayments for new orders. For example, in FY22, the firm’s advance payments account on the BS surged +4.5x YoY.
However, due to changes in specifications of LiB electrode coating equipment, some orders in the current orderbacklog have become less profitable, though not unprofitable. Consequently, HT is considering renegotiating prices
in some cases. In case of cancellations, the firm has already realised revenue based on the percentage of completionbasis, hence will unlikely report impairment loss in the future.

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Source: Hirano Tecseed FY22 earnings results presentation
Hirano Tecseed (6245 JP): Segment Financial Summary
FY21(¥mil)

Coating and
Laminating Machinery

Industrial Machinery

Others

FY22

FY

FY

Sales

26,53331,17917.5

Segment Profit

2,796

1,985

-29.0

10.5

6.4

-4.1ppt

20,64730,38847.2

Segment Profit Margin (%)
AssetsYoY (%)

Liabilities

6,857

7,039

2.7

Production

22,32327,352

22.5

Order Received

58,46646,503-20.5

Order Backlog

53,58868,912

28.6

Sales

9,998

9,774

-2.2

Segment Profit

1,946

2,069

6.3

Segment Profit Margin (%)

19.5

21.2

+1.7ppt

Assets

8,369

8,619

3.0

Liabilities

4,418

2,936

-33.5

Production

7,484

7,196

-3.8

Order Received

12,757

4,757

-62.7

Order Backlog

14,768

9,750

-34.0

Sales

1,334

1,470

10.2

Segment Profit

204

82

-59.8

Segment Profit Margin (%)

15.3

5.6

-9.7ppt

Assets

530

883

66.6

Liabilities

394

715

81.5

Production

1,002

1,195

19.3

Order Received

1,336

2,233

67.1

Order Backlog

479

1,242

159.3

Source: Nippon-IBR based on Hirano Tecseed's FY21 & FY22 Tanshin

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LONG-TERM VISION 2030
Vision and Target
Hirano Tecseed announced its Long-Term Vision 2030 plan, during which the firm’s aim is to become a global leader
in coating machines. HT is looking to enhance corporate value by establishing a stable revenue base based on thefollowing three goals:
1. Capturing the top market share in coating equipment in energy-related and electronic materials.
2. Expanding its coverage globally from manufacturing to maintenance through enhancing overseas network.
3. Contributing to industrial development and the global environment through coating technology
The two areas of growth focus will remain 1) energy-related application, including LiB electrode coating equipment
but also next generation batteries such as solid-state batteries [SSB] and fuel cells, and 2) electronic materials
applications, including coating equipment for capacitors loaded in EVs, and for electronic materials used in 5G highfrequency wave.
By expanding its existing business, as well as development of the cutting-edge technologies, HT is targeting an OPMof 12.0% in FY30 vs 7.3% in FY22, on sales of ¥60,000mil (8-yr CAGR +4.4%), and ROE of more than 10.0% (vs 6.4%
in FY22).
Capital Allocation Policy
With cash & equivalents at ¥13,161mil as of FY22 end, just shy of 50% of market cap, Hirano Tecseed is considered
as a cash rich company. However, the ¥27,309mil in current assets categorised as sales receivable– of which approx.
¥25,000mil are categorised as contract assets – will likely take around two years to be recognised as sales.
Given the receivables turnover has slowed due to the rise in LiB electrode coating equipment orders which sufferedfrom customers’ requirements changing, as discussed above, the firm needs working capital of some ¥10,000mil.
Hence the real surplus cash appears fairly limited.
HT plans to allocate available funds between investment for growth, CAPEX and R&D, and shareholder returns
within cash flow. As for shareholder returns, management aim to maintain a minimum annual dividend of¥56.00/share and pay out more than 35% of EPS. HT will also consider buying back shares depending on the stock
price.
TSE’s PBR1x Argument
Tokyo Stock Exchange [TSE] demands all prime and standard listed companies to proactively find solutions toimprove capital efficiency so that those companies currently valued below PBR 1x can improve their stock valuation.
HT acknowledges that its shareholders and investors’ opinion that the firm’s shareholder equity is too big for thesize of its business. In the Long-term Vision 2030, HT has not yet mentioned details of its capital policy, its view oncapital cost and separate working capital and surplus cash. HT aims to improve disclosure on its capital policy indue course.

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FINANCIAL SUMMARY
P&L Summary(¥mil / March yr-end)
Sales

FY13

FY14

FY15

FY16

FY17

FY18

FY19

FY20

FY21

FY22

FY23
CE

28,504

14,514

18,335

19,651

20,73832,65931,68225,80037,86642,42341,000YoY (%)

81.1

-49.1

26.3

7.1

5.5

57.4

-3.0

-18.6

46.7

12.0

-3.4

COGS

23,271

12,426

14,42914,906

16,031

25,71425,371

20,81530,80935,744-Gross Profit (GP)

5,233

2,087

3,905

4,745

4,706

6,944

6,310

4,985

7,056

6,679

-

GPM (%)

18.4

14.4

21.3

24.1

22.7

21.3

19.9

19.3

18.6

15.7

-

SG&A

1,665

1,533

1,955

1,723

1,782

2,105

2,625

2,425

3,070

3,585

-

Operating Profit (OP)

3,568

553

1,950

3,021

2,924

4,839

3,684

2,560

3,986

3,093

2,920

YoY (%)

205.2

-84.6

252.6

54.9

-3.3

65.4

-23.9

-30.6

55.7

-22.4

-5.6

OPM (%)

12.5

3.8

10.6

15.3

14.0

14.8

11.6

9.9

10.5

7.3

7.1

Interest & dividend received

47

56

52

53

53

55

65

78

80

90

-

Interest payment

11

9

10

8

7

9

8

6

8

27

-

Investment gains & losses

-

-

-

-

-

-

-

-

-

-

-

Recurring Profit (RP)

3,647

645

2,034

3,075

2,982

4,895

3,773

2,661

4,122

3,219

3,000

YoY (%)

193.6

-82.4

215.3

51.1

-3.1

64.1

-23.0

-29.5

54.9

-21.9

-6.8

RPM (%)

12.8

4.4

11.1

15.6

14.4

15.0

11.9

10.3

10.9

7.6

7.3

Pre-tax Profit

3,697

758

2,034

3,083

2,972

4,896

3,765

2,586

4,205

3,219

-

Tax costs

1,579

313

703

801

884

1,470

1,413

800

1,102

976

-

-

-

-

-

-

-

-

-

-

-

-

Minority shareholder interest
Net Profit (NP)

2,117

445

1,330

2,281

2,088

3,425

2,351

1,785

3,103

2,243

2,100

YoY (%)

174.5

-79.0

198.8

71.5

-8.5

64.0

-31.4

-24.1

73.8

-27.7

-6.4

Comprehensive Profit

2,145

593

1,043

2,532

2,219

3,278

2,317

2,365

3,229

2,361

-

FY18

FY19

FY20

FY21

Source: Nippon-IBR based on Hirano Tecseed's presentation materials, YUHOs and Toyo Keizai estimate

Cash Flow Summary(¥mil / March yr-end)

FY13

FY14

FY15

FY16

FY17

Accounting Standard (Japan)

ConsolConsolConsolConsolConsolConsolConsolConsolConsolConsolOperating Cash Flow

3,716

-2,356

3,985

-344

-601

11,001-3,090

1,971

2,300

-10,249

Depreciation

418

377

338

318

339

341

458

598

583

658

-

-

-

-

-

-

-

-

-

-

-427

-411

305

-1,122

-510

4,292

-1,516620-5,884-6,603

Goodwill Amortisation
Change in Sales Receivables

FY22

Change in inventories

4,456

655

-578

-2,262-3,847

1,375

359

-268

-200

-306

Change in Accounts Payable-4,731-1,359

1,579

847

1,260

92

-677

-112

2,169

410

Investment Cash Flow

-343

-1,292-869-893-1,675-3,353155

668-1,11990Free Cash Flow

3,373

-3,6483,116-1,237-2,276

7,648-2,935

2,639

1,181

-10,159

Finance Cash Flow

-54

-375

-418

165

-530

-847

-598

-723

-934

9,518

13,533

9,521

12,22011,147

8,341

15,14011,605

13,54813,801

13,161

Cash and Cash Equivalent

Source: Nippon-IBR based on Hirano Tecseed's presentation materials, YUHOs and Toyo Keizai estimate

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Balance Sheet Summary(¥mil / March yr-end)

FY13

FY14

FY15

FY16

FY17

FY18

FY19

FY20

FY21

FY22

Accounting Standard (Japan)

ConsolConsolConsolConsolConsolConsolConsolConsolConsolConsolCurrent Asset

23,051

19,35323,35926,39829,12634,86831,75932,186

38,95348,15910,512

11,50812,364

Fixed Asset

6,261

6,481

6,399

7,316

8,431

8,866

10,448

Tangible

3,687

3,454

3,310

3,952

3,959

4,653

6,924

6,687

6,756

7,409

Intangible

151

110

99

111

90

78

186

373

596

672

Investment and others

2,422

2,916

2,989

3,252

4,381

4,135

3,337

3,452

4,155

4,283

Total Asset

29,31325,83429,75933,71437,55743,73442,20842,69950,461

60,522Current Liability

8,206

4,427

7,645

9,119

11,212

15,094

11,797

10,637

15,104

23,429Fixed Liability

1,412

1,286

1,144

1,454

1,422

964

1,085

1,007

894

1,097

Net Asset

19,694

20,121

20,96923,14024,92327,67529,32531,054

34,46334,930Capital

1,847

1,847

1,847

1,847

1,847

1,847

1,847

1,847

1,847

1,847

Capital Surplus

1,339

1,339

1,339

1,339

1,339

1,339

1,342

1,343

1,353

1,360

Retained Earnings

16,73317,012

18,147

20,06821,71924,61826,29327,431

30,69932,099Treasury Shares

-407

-407

-407

-407

-408

-408

-401

-392

-386

-377

Minority Interest

-

-

-

-

-

-

-

-

-

-

Shareholders' Equity

19,694

20,121

20,96923,14024,92327,67529,32531,054

34,46334,930Shareholders' Equity Ratio (%)

67.1

77.8

70.4

68.6

66.3

63.2

69.4

72.7

68.2

57.7

Interest-bearing Debt

1,056

1,014

794

1,326

1,233

915

995

922

737

10,503

Source: Nippon-IBR based on Hirano Tecseed's presentation materials, YUHOs and Toyo Keizai estimate

HIRANO TECSEED (6245 JP)

02 AUGUST 2023

P a g e | 11
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HIRANO TECSEED (6245 JP)

02 AUGUST 2023