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ChipMOS Technologies Ltd (IMOS 0.25%)
Q4Â 2019 Earnings Call
Mar 10, 2020, 8:00 a.m. ET
Contents:
- Prepared Remarks
- Questions and Answers
- Call Participants
Prepared Remarks:
Operator
Good day and welcome to the ChipMOS Technologies Fourth Quarter Full Year 2019 Results Call. Today's conference is being recorded.
At this time, I'd like to turn the conference over to David Pasquale, Global IR Partners. Please go ahead, sir.
David Pasquale -- Global IR Partners
Thank you, operator. Welcome everyone to ChipMOS' Fourth Quarter and Full Year 2019 Results Conference Call. Joining us today from the company today are Mr. S. J. Cheng, Chairman and President; and Ms. Silvia Su, Vice President of Finance and Accounting Management Center. S. J. will review business highlights and provide color on the operating environment. Silvia will then review the company's key financial results. We are also joined on the call today by Mr. Jesse Huang, Spokesperson and Vice President of Strategy and Investor Relations. All company executives will participate in the Q&A session after management's formal remarks. If you have not yet received a copy of today's results release, please email Global IR Partners at [email protected], where you can get a copy of the release off of ChipMOS' website at www.chipmos.com.
As with prior quarters, we hosted a call in Mandarin after the close of the Taiwan Stock Market a few hours ago. This is part of the company's ongoing efforts to broaden investor and analyst following in the domestic Asia market, given the full Taiwan listing. The prepared comments management will cover here are the same as those covered on the earlier call. The second call is intended to give the company's English speaking investors the same opportunity to both hear directly from management and to ask questions directly pertaining to results and the operating environment.
With that said, we must also make a disclaimer regarding the forward-looking statements. During this call, management may make forward-looking statements within the meaning of Section 27A of the U.S. Securities Act of 1933 as amended and Section 21E of the U.S. Securities Exchange Act of 1934 as amended. Such forward-looking statements involve known and unknown risks, uncertainties and other factors, which may cause the actual performance, financial condition or results of operations of the company to be materially different from any future performance, financial condition or results of operations implied by such forward-looking statements. Further information regarding these risks, uncertainties and other factors is included in the Company's most recent Annual Report on Form 20-F which is filed with the U.S. Securities and Exchange Commission and in the company's other filings with the SEC.
At this time, I'd like to now turn the call over to the Company's Chairman and President, Mr S.J. Cheng. Please go ahead, sir.
Shih-Jye Cheng -- Chairman and Director/President
Thank you, David. Welcome everyone to our fourth quarter and full year 2019 result conference call. Hopefully, you all had time to review our earnings release. 2019 was a strong year for us, as we executed on our business and financial objectives. Our mission is to diversify our business into higher margin growth area. Prioritize meaningful improvement across financial metrics. As we keep our operating costs under careful watch, of note, we achieved a record higher revenue driver for the full year 2019. Revenue was up 10.1% for the full year, which is also the highest revenue growth since 2015, we derived a 14.5% increase in gross profit in U.S. $131.3 million. We significantly expanded our net earnings to NTD3.55 per common share or $2.38 per basic ADS up from NTD1.37 and $0.92. But we had another dividend, pending shareholders' approval at our June AGM. Importantly, we generate $244 million in cash from operation in 2019. This is allowing us to further strengthen our balance sheet, supporting our long-term growth opportunity and reward shareholders.
For the full quarter of 2019, revenue grew 3.2% over Q3, as we benefit from demand related to our memory and smartphone related products. This including high loading with our memory customers and the continuous ramping up of new customer program.
Q4 gross margin grew to 32.7% from 31.4% as we focus on higher ASP products, such as TDDI and our higher margin product line, which offset some LCD driver softness, related to maker softness in TV demand. These will also benefit from improvement in generation, labor and operating cost control.
On the cost front, our operating expense ratio continued to improve. With Q4 operating expense ratio dropped to 7% from 7.3% in Q3. For the full year 2019, we increased gross margin to 19.3% from 18.6% in 2018. Given the second half uptick, in our memory business and continued growth in TDDI, we improved our overall utilization to 76% in Q4 from 74% in Q3. In terms -- so adding color on Q4, where we had growth across our business compared to Q3, with the exception of DDIC.
Memory product revenue represented 39.2% of total Q4 revenue. Within the memory, revenue from DRAM product growth around 10% in Q4 compared to Q3, and represent about 18% of total Q4 revenue. Revenue from flash was also up in Q4 and represent 20.4% of total Q4 revenue. NAND flash continued to grow in Q4 and represent about 47% of Q4 flash revenue.
As for driver, IC related product revenue, including gold bumping and COD and COF, this represents about 47% of Q4 total revenue. Demand benefited from increased TDDI product penetration for the HD panel segment. And on emerging for full HD panel segment of smartphone, along with revenue growth from gold bumping and COD. Taking together, it was more than offset the COF revenue decline, further demand growth softness in Q4 TV demand. TDDI on that represents about 40% and 7.3% of DDIC revenue in Q4.
Regarding to the end market, revenue from smartphone, smart mobile growth 10.1% compared to 2018 and represent about 39.4% of 2019 annual revenue. The TV category growth, 8.5% and represented about 31.7% of 2019 revenue. Automobile and industry growth, around 6% and represented about 9.2% of 2019 revenue. Revenue from computing growth more than 12%, compared to 2018 and represent about 9.6% of total 2019 annual revenue. As we look forward into the first quarter of 2020, we are optimistic about the year, based on the start of Q1 in a good position. As you know, the industry typically, Q1 seasonally down from Q4, referring the demand pattern and the low Chinese New Year working days.
For 2020, January and February started out good for us, with solid demand. We believe the catalyst does help drive our revenue, profit and cash generation growth in 2019 will continue in year 2020.
In memory, we are encouraged by healthy demand from the memory customer and help the inventory level. We expect growth in our DRAM and flash business from Q4 will continue, as we are move into 2019. In DDIC, we are cautiously confident TV demand can maintain a similar level in Q1 from Q4. We also expect to benefit from the continued strong demand level in smartphone for TDDI, with higher penetration of HD gray panel and OLED emerging of full HD gray panel.
Seeing confidence in our outlook and healthy financial position, our board approved another dividend, pending shareholders approval in our June AGM. We will distribute NTD1.80 per common shares. This is a clear measure of [Phonetic] uncertainty, as the semiconductor supply chain navigated the ongoing coronavirus situation. For ChipMOS, we quickly moved to ensure the safety of our employees, by following government's healthy regulation. We have seen some customer working through navigating supply chain disruption in China after the normal New Year's holiday closure. This, following the penetration in 2019 and have reimposed Taiwan's importance in the global supply chain. Our customers seem to like our secure capacity and support.
As you are aware, this is a very fragile situation. We are closely following the guideline and the duration provided by the Taiwan Center for Disease Control. We are taking serious action to ensure the health of our employee, while maintaining the desirable and quality customer with ChipMOS. Given the seriousness of the situation, we put in an internal task force to allow us to better monitor the situation and to ensure faster growth of our operation, rephrasing the importance of these issues, and how serious we are taking. I am chairing the taskforce team and Mr. Shou, our Senior Vice President and COO, is joining us.
We have been fortunate so far, not one of our employees have very been affected. And we will restart all our facility on schedule after the surprise New Year's holiday closure, with no delay or disruption to date. Importantly, we are maintaining full inventory level, as we work to ensure uninterrupted service to customers. We are in close contact with vendors across the supply chain and have intention to provide the [Indecipherable].
Finally, we are taking a very conservative view of our capex, as we balance the company for long-term growth, while not overextending ourselves. We are looking to the reduced capex where possible. Meanwhile, we are continuously driving high efficiency and profit through increased AI and automation, to further reduce operating costs, and enhance the revenue per headcount.
Now let me turn the call over to Ms. Silvia Su to review the fourth quarter and full year 2019 financial results. Silvia, please go ahead.
Silvia Su -- Director of Finance and Accounting Management
Thank you, S.J. All dollar amounts cited in our presentation are in NT dollars. We have provided both US dollars and NT dollars in our press release. The following numbers are based on the exchange rate of NTD29.91 dollars against $1 as of December 31, 2019. All the figures were prepared in accordance with Taiwan International Financial Reporting Standards. To help make the presentation easier to follow, my comments will go along with the investor presentation on our Investor Relations website published today.
Page 12, consolidated operating results. For the fourth quarter of 2019, total revenue was $186.3 million. Net profit attributable to the company was $17.7 million in Q4. Net earnings for the fourth quarter of 2019 were $0.02 per basic common shares or $0.49 per basic ADS. Depreciation and amortization expenses were $32 million. We invested $57 million in capex in Q4. EBITDA for Q4 was $62.1 million, EBITDA was calculated by adding depreciation and amortization together with operating profit. Return on equity of Q4 was 10.9%.
Page 13, consolidated statement of comprehensive income. Compared to last quarter, total Q4 revenue was $186.3 million, a up 3.2% compared to Q3. Gross profit was $42.4 million in Q4, with Q4 gross margin at 22.7%, up 1.3 percentage points compared to Q3, 21.4%. Our operating expenses in Q4 were $13.1 million or 7% of our Q4 revenue, which is about 0.3% lower than Q3. This reflects the leverage in our model, as we support higher revenue on the lower costs.
Operating profit for Q4 was $13.1 million and operating profit margin for Q4 was 16.2%. This represents a 1.6 percentage point improvement compared to Q3. Net non-operating expenses in Q4 were $7.5 million compared to net non-operating expenses in Q3, up $1.8 million. The difference between Q4 and Q3, is mainly due to the increase of net foreign exchange loss of $4.2 million and share of loss of associates accounted for using equity method $1.8 million. Net profit in Q4 was $17.7 million compared to $19.6 million in Q3, which decreased $1.9 million.
Net earnings for the fourth quarter of 2019 were $0.02 per basic common shares compared to $0.03 per basic common share for Q3 of 2019. Basic weighted average outstanding shares were 727.2 million shares, compared to same period of last year. Total revenue for Q4 was $186.3 million, which was up 12.1% compared to same period of 2018. Gross margin was 22.7%, decreased 0.1 percentage points compared to 22.8% in Q4 2018. Operating expenses in Q4 were $13.1 million, which was up 6.5% compared to Q4 2018, in support of higher revenue levels.
Operating profit margin in Q4 was 16.2%, an improvement of 0.3 percentage points compared to 15.9% in Q4 2018. Net non-operating expenses in Q4 were $7.5 million compared to $3.4 million in Q4 2018. The difference is mainly due to the increase of net foreign exchange loss, $6 million, and partially offset by the decrease of the share of loss accounted for using equity method, of $2.3 million net profit in Q4 was $17.7 million compared to $17.3 million in Q4 2018. Net earnings for the fourth quarter of 2019 were $0.02 per basic common shares compared to $0.02 per basic common shares for Q4 of 2018
Page 14; compared to last year, total revenue for 2019 was $680 million, which is up 10.1% compared to 2018. Gross margin increased to 19.3%, up 0.7 percentage points compared to 18.6% in 2018. Our operating expenses in 2019 were $52.3 million, which was up 5.7% compared to 2018, in support of our higher revenue level. Operating profit margin in 2019 was 12.1%, an improvement of 0.7 percentage points compared to 2018. Net non-operating income in 2019 was $19.2 million, compared to net non-operating expenses in 2018,of $10.6 million. The increase was mainly due to the recognized $32.8 million, gained on disposal of investment accounted for using equity method in 2019.
Net profit in 2019 was $86.4 million compared to $36.9 million in 2018, mainly due to the operating profit in the 2019, increased by $11.9 million from last year, and we recognized $32.8 million gained on disposal of investment accounted for using equity method in 2019. Net earnings for the year of 2019 were $0.12 per basic common share as compared to $0.05 per basic common share for 2018.
Page 15, consolidated statement of financial position and key indices. Total assets at the end of Q4 was around $1.15 billion, including current asset of they $393.3 million. Total liabilities at the end of Q4 were $490 million, including current liabilities of $163.9 million. Total equity at the end of Q4 was was $657 million. Accounts receivable turnover days in Q4 were 80 days, compared to 83 days in Q3 of 2019. Inventory turnover days was 38 days in Q4, the same as in Q3 of 2019.
Page 16, consolidated statements of cash flow. Cash and cash equivalents at beginning of 2019 were $155.2 million. Net cash generated from operating activities was $200.4 million. Net cash used in investing activities was $142 million. Net cash used in financing activities was $56.1 million. As of December 31st, 2019, our balance of cash and cash equivalents was $157.3 million, increased $2.1 million compared to beginning of the year. Free cash flow in 2019 was negative $4.5 million. Free cash flow was calculated by adding depreciation, amortization, interest income, together with operating profit and then subtracting capex, interest expense, income tax expense and dividends from the sum
Page 17, capital expenditure and depreciation; we invested $57 million in capex in Q4. The breakdown of capex was 8.6% for bumping, 59.2% for LCD driver, 15.5% for assembly, and 16.7% for testing. Depreciation expenses were $32 million in Q4. We invested $163.8 million in capex and depreciation expenses were $124.8 million in 2019. At February 29, 2019, the company's outstanding ADS number was approximately 5 million units, which represents around 13.2% of the company's outstanding common shares.
Operator, that concludes our formal remarks, we can now take questions.
Questions and Answers:
Operator
[Operator Instructions]. We can take our first question from Scott Bishins of Caffeine Holdings. Please go ahead, your line is open.
Scott Bishins -- Caffeine Holdings -- Analyst
Yes, hi S.J. and Silvia. Looks like it was a great year. It looks like at this point, the momentum is also moving in 2020. I have a couple of questions. Number one, could you give me the reasons why taking a look at what the OSAT companies that reported in February, that ChipMOS was the only one that had substantial increases in revenue month over month versus the other OSAT companies, that mostly were either flat or negative?
Shih-Jye Cheng -- Chairman and Director/President
Scott, this is S.J. Thank you for all those questions you asked. The [Indecipherable] are very, the customer requirements is really strong, especially, from memory stack. Those, including the commodity DRAM and niche DRAM, low flash and also NAND flash. So that's the first one to, driving for us. And the March timeframe also maintained the same pressure. And we also are [Indecipherable] to see the -- will continue increase in the whole year, just in memory side. Second one is, we increased a lot of LCD driver bumping business for memory operations, and also the [Indecipherable] of depreciation and [Indecipherable]. And we also convert our COF equipment, especially tested to COD to support the OLED and TDDI. So that's three segment to support the very very -- is a record high for the revenue. And we also invest a lot of automation and AI to increase our efficiency and also increase our revenue per headcount. That also further helped to drive our gross margin and profit for the company.
Scott Bishins -- Caffeine Holdings -- Analyst
That sounds great. Would you say, at this point right now that the factories are running at a full utilization or about what percentage will you say they are running at?
Shih-Jye Cheng -- Chairman and Director/President
Actually, right now it's around 76%, in Q4. And Q1, some -- the memory-wise was increase utilization rate will increase. But regarding to a driver, we see the COF, they had a softness in the TV. But we see the TDDI and OLED can offset this kind of decline. So for this quarter, the memory was increasing and LCD driver was decreasing.
Scott Bishins -- Caffeine Holdings -- Analyst
And how do you see that moving into the second quarter? Would you say the same scenario?
Shih-Jye Cheng -- Chairman and Director/President
Yes, that's -- from my personal viewpoint, I think right now, a lot of like story in the street about -- for our product segment and for example, our memory customer, all their wafer fab is located in Taiwan. So all the supply chain is in Taiwan. So we are pretty confident on the supply chain. We will take this as a value chain. But for the LCD driver, that would depend on the TV and the smartphone business, that would be vis-a-vis uncertainty. But the overall demand are still existing that they might had a one quarter delay or something like that. That depends on the coronavirus situation is under control now. So for the whole year, we feel committed. I think we had a good Q1, and our product segment right now is pretty strong.
Scott Bishins -- Caffeine Holdings -- Analyst
Okay. What are gross margin percentage should we model in for 2020? Last year, we came in at around 19% for the year. I know the back half of last year was a much stronger. We were probably closer to about 22%. How do you see the whole -- the full year of 2020 on a gross margin percentage?
Shih-Jye Cheng -- Chairman and Director/President
I think they can use the average for Q4 last year and Q1 this year...
Scott Bishins -- Caffeine Holdings -- Analyst
Okay...
Shih-Jye Cheng -- Chairman and Director/President
Deliveries. Yes...
Scott Bishins -- Caffeine Holdings -- Analyst
Is Q1 going to be a little stronger than Q4 of last year?
Shih-Jye Cheng -- Chairman and Director/President
Actually, I will see the break of the low single-digit decline that depends on the -- in [Indecipherable]
Scott Bishins -- Caffeine Holdings -- Analyst
Okay. So would you feel safe if we -- if I modeled around 21% for the year?
Shih-Jye Cheng -- Chairman and Director/President
I think 20% to 21% will be pretty reasonable.
Scott Bishins -- Caffeine Holdings -- Analyst
Okay, good. A couple of other questions. What kind of impact on demand do you see in the first quarter from the virus?
Shih-Jye Cheng -- Chairman and Director/President
Actually, we can see the transportation from the China supply and the Korea test supply. The total quality will not impact, but the supply is nonlinear. For example -- or previously, maybe they supply every two days in one price. Right now, maybe one price, in one week or two weeks, one price. That will create some impact for our supply chain. But we see how we'll counter. So we grow our inventory and supply chain and labor to support customer demand. And customer also would like to invest, also take this kind of inventory risk with us.
Scott Bishins -- Caffeine Holdings -- Analyst
Okay. Also, I've noticed in the last two or three days that the coronavirus has started to slow down in China. Do you think that quarter two will be affected at all by the virus? Or do you believe that it's contained most of the most of the issues with, I guess, supplies to make sure there are enough supplies and inventory in the first quarter?
Shih-Jye Cheng -- Chairman and Director/President
Yes. Scott, actually I'm not the right person to answer your question regarding the coronavirus situation. But we prepare and when -- we have prepared for us and we even had a worst-case scenario preparation. But at least today in China, it is under control. But outside of China -- still not -- we had to control yet. But Taiwan, this time since we had soft retailers, 10 or 15 years ago. So the Taiwan Government and people how to have a very serious and the know-how, how to prevent this one. So this time, I think, we will try our best, but so far, so good.
Scott Bishins -- Caffeine Holdings -- Analyst
Okay. For 2019, I guess, our capex was about $163 million. I know you just mentioned that you're looking to -- try to hold down the spending and should be less than last year. What do you -- what should I model in for capex for 2020? And what -- even just give me a percentage of maybe how much it might drop?
Shih-Jye Cheng -- Chairman and Director/President
Yes. To date, in the moment, we also had this kind of discussion. At least for the new factory preparation, we are put on hold or postponed to the next year. That's around -- pretty close to the one third, our capex for the 2020 and the rest of the capacity increase. I think we were focused on the efficiency improve, automation itself, capacity expansion. But right now, it's still too early to say.
Silvia Su -- Director of Finance and Accounting Management
Yes, if we exclude the land and building expansion, and I think -- we hope we can control the capex under 20% of our total annual revenue.
Scott Bishins -- Caffeine Holdings -- Analyst
To a under 20%, OK. I know last quarter, we talked about, I guess, running out of space in the facilities. And you just mentioned now that you're looking to put that off for possibly, for next year. Will that constrain the amount of revenue that we could grow still for this year? Or do we still have enough space, and is the automation in the AI, is that going -- take up the slack and be able to produce more revenue.
Shih-Jye Cheng -- Chairman and Director/President
Actually, Scott you can see the utilization rate we increased around 76%. But actually, the total cash generation is much higher than this one because of the same equipment. They can -- during the efficiency improvement and the process step improvement. We can generate more revenue, given in the same utilization rate neighborhood. So that's...
Scott Bishins -- Caffeine Holdings -- Analyst
That's great to know. Just two more questions. Talking about the China JV. A couple of questions about that. Number one, how have they've been affected by the coronavirus? And are they -- are all the employees back to work there? And what capacity would you say we're running over there?
Shih-Jye Cheng -- Chairman and Director/President
Yes. Actually, there's two issues. There's -- thank you in putting this question. The first one is, as in end of February, the ownership for China investor already convert or transferred from Unigroup to YMTC. So right now YMTC or Shanghai facility more than 50%. And the new Chairman is also -- is the CEO of YMTC. So that's the first one, just like you know.
And ChipMOS, we see around 45%. And in the similar Chinese New Year's, since the demand is good. So they maintained around 50% run rate during the Chinese New Years. So at a higher run rate and [Indecipherable]. So right now, there's a new business is continuing. And a lot of operational people from outside of China -- outside of Shanghai. When they arrive at Shanghai city, we'll need to stay away from the bakery by say a healthy manageable at least for two weeks. So they were ramping up by a weekly basis, right around it's 60%.
Scott Bishins -- Caffeine Holdings -- Analyst
Okay. Would the YMTC now taking over the new -- the position of Unigroup. First of all, will there be a change or a shift in the, I guess, the flash memory that they are doing versus what you were doing before? Or is it still the same company since Unigroup? I believe they haven't own a big percentage of YMTC.
Shih-Jye Cheng -- Chairman and Director/President
Yes. I think, eventually, since YMTC, they already invested a lot in the front end [Phonetic]. They are very eager to have their own bigger facility to establish their R&D and also [Indecipherable] for the future expansion. So you are right. They will continue to go to the look alike IBM business model.
Scott Bishins -- Caffeine Holdings -- Analyst
So do you believe that, it could become a larger and profitable business fast than [Phonetic] now with the new ownership?
Shih-Jye Cheng -- Chairman and Director/President
Exactly. About that or after the coronavirus under control.
Scott Bishins -- Caffeine Holdings -- Analyst
And my last question is, I know we talked about a couple of years ago that at one point in time, we were going to hope to take the JV in China and do a listing for over in Shanghai. Is that still part of the plan to take a public? Or is that just going to fall under the umbrella of YMTC?
Shih-Jye Cheng -- Chairman and Director/President
Actually, we selected the original strategy. But timing wise maybe postponed.
Scott Bishins -- Caffeine Holdings -- Analyst
Okay. Is YMTC, are they listed under -- in Shanghai?
Shih-Jye Cheng -- Chairman and Director/President
No. Not yet.
Scott Bishins -- Caffeine Holdings -- Analyst
Not yet. So they're still a private-public company then, right?
Shih-Jye Cheng -- Chairman and Director/President
Yes. And a major ownership is Government and Unigroup.
Scott Bishins -- Caffeine Holdings -- Analyst
Right. When you say the timing might be different now? I know, originally, we were hopefully shooting for 2019 when we first discussed it a couple of years ago. You think it's a possibility for end of 2020, 2021?
Shih-Jye Cheng -- Chairman and Director/President
I think, you need to give us some more time to develop our network infrastructure. And -- yes.
Scott Bishins -- Caffeine Holdings -- Analyst
Okay. All right. Also -- last question. I know I asked a lot of questions, but this is the last one. On the last conference call, you mentioned that one of the quarters that we had or one of the months, I don't remember, if it was a month or a quarter. You said, we actually ran at a profit. Is that something that you could expect for 2020, that we could start to be profitable and maybe, hopefully, end the year with a profit?
Silvia Su -- Director of Finance and Accounting Management
You mean, Unimos, right?
Scott Bishins -- Caffeine Holdings -- Analyst
I'm sorry?
Silvia Su -- Director of Finance and Accounting Management
You mean, Unimos, right? Unimos, Shanghai. Unimos.
Scott Bishins -- Caffeine Holdings -- Analyst
No, I'm talking about the JV in China?
Shih-Jye Cheng -- Chairman and Director/President
Yes, that's Unimos.
Silvia Su -- Director of Finance and Accounting Management
Yes, that's Unimos.
Scott Bishins -- Caffeine Holdings -- Analyst
Oh I'm sorry.
Silvia Su -- Director of Finance and Accounting Management
But because now -- you know now there is coronavirus. So I think, it's really hard to predict.
Scott Bishins -- Caffeine Holdings -- Analyst
Okay.
Silvia Su -- Director of Finance and Accounting Management
Yes, I think it's a trading change. Yes.
Scott Bishins -- Caffeine Holdings -- Analyst
Do you feel, based upon the information that you've been getting? Do you feel that the coronavirus in China is subsiding? I mean, that's what I've been seeing on the -- on a bunch of the newspapers and articles, I've read, that it looks like the -- even yesterday, they mentioned they had 14 mix shift hospitals and they've just closed down 11 of them because a lack of a new patients. So that sounds to me that's encouraging that we should be certainly on the downside as far as new cases and hopefully, getting back to full production in most areas of China.
Shih-Jye Cheng -- Chairman and Director/President
Yes, inside in China the answer is yes. But outside of China is out of control.
Scott Bishins -- Caffeine Holdings -- Analyst
Right...
Shih-Jye Cheng -- Chairman and Director/President
You are -- like Korea, like Japan and like Italy. Yes.
Scott Bishins -- Caffeine Holdings -- Analyst
Okay. Well, that's it for me. But again, congratulations. I really think last year was certainly a turning point in getting ChipMOS to start to become a revenue producer again, and growth and also nice to see the gross margins have moved up dramatically over the last couple of years by taking on businesses that now have a better profit margin. And I just hope that it continues, and it sounds like you've taken on also a lot of new businesses from some other accounts. And I'm just keeping my fingers cross that the virus will subside and we'll be back to heavy growth. So congratulations again, and looking forward to the next conference call.
Shih-Jye Cheng -- Chairman and Director/President
Okay. Thank you.
Silvia Su -- Director of Finance and Accounting Management
Yes. Thank you.
Operator
[Operator Instructions] We will now take our next questions from Vipul Sagar of Blash Capital. Please go ahead. Your line is open.
Vipul Sagar -- Blash Capital -- Analyst
Thank you, S.J. Thank you, Silvia. Really good year and...
Silvia Su -- Director of Finance and Accounting Management
Hi.
Vipul Sagar -- Blash Capital -- Analyst
Hi, there. And I was very impressed with your revenue numbers in January and February, especially February. I heard the capex number. Last year, you spent about 24% of your revenue and capex and this year, you're saying you can come under 20%. So my question is about free cash flow. Does that mean for the full year, you will show a positive free cash flow?
Silvia Su -- Director of Finance and Accounting Management
Yes. You mean 2020, right?
Vipul Sagar -- Blash Capital -- Analyst
Yes.
Silvia Su -- Director of Finance and Accounting Management
Yes, for the 2020, yes, we will have positive free cash flow.
Vipul Sagar -- Blash Capital -- Analyst
Fantastic. That is great news. And my next question was about gross margin. Again, for the second half last year, your numbers were really good. And I know, Scott asked you about gross margin. And then for this year, do you see the same pattern where second half, again, you see a little better gross margin than the first half or about 20%, 21% overall for the year?
Shih-Jye Cheng -- Chairman and Director/President
Yes. To answer your question, I think, the second half will be better than the first half.
Vipul Sagar -- Blash Capital -- Analyst
Oh, fantastic.
Shih-Jye Cheng -- Chairman and Director/President
Basically based on the coronavirus...
Vipul Sagar -- Blash Capital -- Analyst
Yes, yes...
Shih-Jye Cheng -- Chairman and Director/President
Can we work also with being Q2 on that. But the total -- I think maybe slightly a little bit delay, depends on the situation.
Vipul Sagar -- Blash Capital -- Analyst
Okay. That is a good news. And the last question I had was about the China joint venture. When did YMTC, take over the ownership of the China equity, I mean, the China joint venture. When did they become owner of the joint Unimos?
Shih-Jye Cheng -- Chairman and Director/President
February...
Vipul Sagar -- Blash Capital -- Analyst
It used to...
Silvia Su -- Director of Finance and Accounting Management
Yes in last year of -- YMTC, last year December 2019...
Vipul Sagar -- Blash Capital -- Analyst
Okay...
Silvia Su -- Director of Finance and Accounting Management
Maybe the shareholders of Unimos. Yes.
Vipul Sagar -- Blash Capital -- Analyst
Okay. Yes, I thought it was Shanghai and ChipMOS, but now it's YMTC and ChipMOS.
Silvia Su -- Director of Finance and Accounting Management
ChipMOS. Yes.
Shih-Jye Cheng -- Chairman and Director/President
ChipMOS. Yes.
Vipul Sagar -- Blash Capital -- Analyst
Okay. Got it. Thank you. You answered all my questions. And I appreciate it and again, really good revenue numbers. Thank you.
Shih-Jye Cheng -- Chairman and Director/President
Thank you.
Silvia Su -- Director of Finance and Accounting Management
Thank you.
Operator
Thank you. There are no further questions in the telephone queue at this time. I would now...
Shih-Jye Cheng -- Chairman and Director/President
Thank you, everyone.
Operator
Yeah, I'd now like to turn the call back. Please go ahead.
Shih-Jye Cheng -- Chairman and Director/President
Thank you, everyone, to join our 2019 full year's conference call. Thank you very much. Management team will keep -- effort to continue to drive the revenue and with good profit and also reward to the shareholders. Thank you very much. Bye-bye.
Silvia Su -- Director of Finance and Accounting Management
Bye-bye.
Duration: 48 minutes
Call participants:
David Pasquale -- Global IR Partners
Shih-Jye Cheng -- Chairman and Director/President
Silvia Su -- Director of Finance and Accounting Management
Scott Bishins -- Caffeine Holdings -- Analyst
Vipul Sagar -- Blash Capital -- Analyst
