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Intrinsic Value is all-important and is the only logical way to evaluate the relative attractiveness of investments and businesses.
Hello. Good afternoon, my dearest investors and potential investors. This is Paul Ying, CFO of Chroma. Here, Jennifer Chieng with me, welcome to the 2021 First Quarter Investors Web Conference. For today, we are going to conduct this presentation in English and afterwards for the Q&A, where according to your language, we are going to make answer by Mandarin or English.
Well, let's start to -- from the -- skip a few pages and go to the Slide #5. You can see that the first quarter condensed consolidated income statement. You can see here that the net sales for the first quarter of 2021 is around -- somewhere around TWD 4.27 billion, compared to last year first quarter, this is a 27% growth.
And if we go to the detail, you can see that consolidated sales of test equipment business, which is the mainstream of the of the Chroma operation, is approximately TWD 3.34 billion, and compared to last year first quarter, this is a 31% growth. Well, as to the first amount of the MAS is TWD 143 million and close to a 19% drop compared to last year.
Well, as to the new material sales numbers, close to TWD 692 million, and this is a 24% growth. So overall, it gives us a 27% growth on the top line. As to the gross margin, you can see that for the first quarter, the consolidated gross margin is approximately to TWD 2.1 billion, and close to 49% of the gross margin rate, and compared to last year, this is a 21% growth as well.
And for the OpEx, we maintained approximately the same level, a little bit over and give us the operating income close to TWD 890 million, and compared to last year, this is a 62% growth as well.
But if you look at the -- and operating margins give us 21% compared to the sales revenue, and which is -- this is a new high. And compared to the last year, if you look at the nonoperating sections, you can see that they're sitting at approximately TWD 1.8 billion, and this is almost -- well, a big chunk of percentage of growth compared to last year, I don't give the numbers to you. But if you look at the income before tax, it's close to TWD 2.69 billion, compared to last year's 600 million -- TWD 607 million, and this is a 343% growth already.
And net income, it went back to like TWD 2.25 billion, compared to last year, again, another 365% growth. So that gave us the first quarter. The EPS close to TWD 5.36. I think, well, if you look at this as big numbers and thought, well, it's all coming from the nonoperating, yes, we have -- we enjoy capital gain for sales of our original headquarters back to the Huaya Industrial Park.
If we exclude that section out. If you look at the Slide #6, we give you a comparison or a proforma income statement. If you look at the blue columns, you can see that the operating income, well, again, it's TWD 889 million and for the -- compared to last year, it's a 62% growth.
And if we take the capital gain out of the nonoperating, then the net income is close to TWD 729 million, and this is a 50% growth so we still enjoy like somewhere like TWD 1.74 of EPS, and that compared to last year, it's a 54% growth. So for the main, during all the year, the core business of Chroma, we're still doing a very good at the first quarter.
Okay. If we go to the balance sheet, for those highlights, if you look at here, I think I want to highlight to you is here, for those good numbers from the income statement, you can see that for the turnover days, for inventory, for accounts receivable or even for the accounts payable, I think they are improving and also in a very healthy status.
And for the consolidated -- for our financial status, you look at this as a net cash at the first quarter. And for the return on equity, it's 17%, which is excluding all the capital gains already, which is the fair numbers, and it's pretty good numbers to us. And return on assets is 10%. It's a double digit. And free cash flow for the first quarter is somewhere TWD 3 billion, a little bit close to TWD 3.1 billion.
And for the first quarter, as to the first quarter of the parent company highlights. If you look at here, you can see that the sales revenue is close to TWD 2.66 million -- up to TWD 2.66 billion and up to 10% on a Q-over-Q base and 30% on a year-over-year basis. And the gross margin still maintaining at the over 50%, close to 53%.
Operating margin close to 26%, which is approximately at the high end of the -- for the past few quarters. And net income, we are making TWD 2. 248 billion and up to -- this is Q-over-Q 228% growth and the 377% growth on a year-over-year basis. The major growth in the first quarter is contributed from the semiconductor and photonics sectors. And this represents a 53% growth, on either Q-over-Q, or y -- year-over-year, respectively.
So if we look at the income statement for the first quarter, again, if you look at the Slide #9, you can easily see that, again, operating margin is close to TWD 700 million. And this is, yes, 28% growth on Q-over-Q and 38% growth on year-over-year. And a big chunk of the capital gain sitting in the nonoperating, and for the first quarter of close to TWD 1.9 billion. And that gave us the first quarter net income, TWD 2.24 billion and close to TWD 5.36 earnings per share.
So if we look at the next page on the financial ratio and the balance sheet highlights, again, if you look at here, you also can see that the improvement on the turnover days of the inventory turnover, accounts receivable turnover and also the accounts payable turnover. Return on equity also on the -- sitting on the high end, on the 18%, and free cash flow, close to TWD 3 billion. All right.
Well, one extra slide, I would like to show you is on the capacity expansion. I think maybe you know or you don't know, we have been moved from our original headquarter in Huaya Industrial Park to our new, Guishan A7 Headquarters. Well, the basic highlight for this floor space, well, approximately, the new headquarters, almost double the size of the original one. And the original headquarters were been sold and recognized the capital gain at the first quarter of this year on the gross, approximately TWD 1.99 billion, close to TWD 2 billion. And if we break it down, you can see that, well, the net gain of this transaction will be approximately TWD 1.73 billion. Well, that will be excluding the -- still has had to be, excluding the leaseback, a certain portion of our original headquarters due to the production we still maintain on the old site. Well, we have to deduct it by TWD 42 million. And also due to the counterpart that we are selling to is the ADLINK, and we're holding ADLINK around 11.26%. So that portion of the capital gain will be deferred in the future. And you also can see that the new sites here, we are staying in the station, Taoyuan A7 Headquarters, on the land utilization is approximately 18% of that. So we still have a lot of space to -- for the future expansions.
And after the cash flow for the first quarter, you can see that the first quarter, our cash -- free cash flow approximately is TWD 3.1 billion. And our cash dividend for the last year, 2020 is approximately TWD 1.88 billion. And also our ordinary CapEx spending for each of the year is approximately TWD 400 million. So we still have the balance of the extra cash flow -- cash inflow, around TWD 800 million for the possible M&A project or the future capacity expansions. I think this is the cash flow for the year, for our capacity and also the sales of the original headquarters in Huaya Industrial Park. If we look at the operation side, you can see from the Slide #13. On this page, you can see that -- well, for the first quarter of this year, for the product mix, you can easily see that the test instruments and automatic testing systems for ATS sections, well, it's a bit of flat to last quarter and also the first quarter of last year. And for the semiconductor and photonics testing solutions, you also can see from here that both Q-over-Q and year-over-year, it's a 53% growth, and which is the growth driver for the first quarter. And Turnkey, again, if you look at the numbers, well, for the first quarter, Q-over-Q, this is a 33% drop. But compared to last year first quarter, it's nearly triple the size due to the project that we delivered to our customers. And again, service and others still have steadily grown compared to last quarter and a big chunk of growth rate on 82% on a year-over-year base. Well, overall, we still can see that for the first quarter, well, the Chroma consolidated testing equipment business growing like a 4% compared to last quarter and 31% growth on a year-over-year basis. For the MAS, again, this is a 19% drop. And for the new material, well, contributed from the semiconductor business booming. Well, the utilization of the special material, I think, is growing. We are looking at the 24% growth on a year-over-year basis on as well, a 10% drop on a Q-over-Q base. Okay. This is the -- basically, is the -- my presentation. Well, for the year 2021 for the guidance, we didn't make any change right now. Well, probably until next financial release and the conference, we are going to have a new one. Thank you. And now let's go to the Q&A. Any questions.
[Operator Instructions] we have received 2 questions. I'll start with [ Andy from PAG ]. The question is regarding to what will be the strongest growth in 2021st, which occasion?
Based on our current order on hand, I think semiconductor is -- semiconductor and photonics sectors remain strong. And I think our order visibility can probably over the quarters. And I think that for the first quarter, we generated over TWD 1 billion from a semiconductor and photonics sectors. I would say about 85% will be coming from IC testers and then remaining will come from the photonic sectors. And as you know, we don't cover any memory IC testers. So our major contributions mainly come from, first one, SLT system-level testers, the drivers come from HPC markets. Another part of business is actually come from the lager IC market, which is we provide a low frequency testers. And the next question is come from [ Mr. Hu Kevin ]. What is second quarter sales guidance and outlook by segment?
Regarding to this question, I think our guidance -- we do give like an overall 2021st's overall guidance. For example, the stronger growth will be come from the semiconductor and photonics sectors. We expect our leases to be over 20% growth. This kind of guidance will not be change as you may notice from the results on first quarter. And regarding to the second quarter, I think the best answer will be if there is no component shortage, influence factors, I think we start to be doing better than first quarter. But I still -- we still need to say that current this quarter, we still have some influence factors from this, as some components are still under shortage. And so our deliver time or the lead time to our customer will be slightly longer than previous -- compared to normal practice. Next question actually still comes Andy, it's in Chinese. IC testers burning -- regarding to IC tester, reliability testing like burning, the product cycled -- okay, and our customer -- the product -- he is asking about the customers' product cycles and also the customers. Okay. For system-level testers, we mainly cover HPC market at the moment and it's only partial for the 5G mobile. Regarding to the burning system, I think the majorities comes from high power-related HPC type of chips. For example, especially graphic, GPU, AI sensors and some of related to auto IC. So regarding to system-level testers, we do have -- we made 3 major features. First one, compatibility testing, which is how you chip interact with other chips, which is -- we call, focal functional testing. Second one, thermal control and third sort of burning system. And if customers need to have a burning system or burning functions, mostly because these chips are related to high-power, for example, some of the NVIDIA customers they're -- they say, their new type of GPU already stopped from the 600 watts. And if compared to other customers, some of the customers even over 600 watt. And our customer base for HPC, this year, I think the majors come from -- if you talk about GPU, NVIDIA, we have partial, a little bit from AMD, and then we do continue to penetrate new customers, for example, Skyworks and Xilinx. And for mobiles and other related , we do have Qualcomm as a -- long customers before. So last year, we also have -- not for last 2 years, we do cover some of Asia customer include Mediatech, Realtek, HiSilicon. But HiSilicon is not the big portion, very little. And these are all major customers. Next question is from, sir name called, [ Weiner ]. Okay. I don't quite understand this question regarding to auto IC. Normally for auto IC today, we mostly provide temperature simulations. And not really cover the CPU. So I don't quite understand this question. It's whether this -- for all talk purpose, it's going to include sensor or not? So I'm expecting this investor could give a more clear questions. Okay. The next question is come from Kunya . Can you share more on the outlook for power heavy equipment for EV industry? Can you share more about the company's perspective and its target for your metrology category, okay? Okay. As in our power testing in the first quarter, as you may notice, we also deliver another EV battery cell projects. And over the last year, okay, that started from last year. Our power testing breakdown is 25% to 30% related to EV industry. And 35% is related to consumer electronic goods, including passive components. It's very hard for us to really divide out the past components, how much it goes to consumer electronic goods, others or EV purpose. And remaining the percentage majorities go to 5G related, including infrastructure, data center, server power, okay. Obviously, last year, the EV investments, I mean, for the overall industry, we didn't see any -- like a very strong growth. I mean, for last year, maybe it could be a reason because of COVID's influence or impact. But this year, we do see the coming up, the picking up on the EV investment, no matter on the EV battery cell or particularly mostly comes from the EV battery pack and a charging station. And because EV battery cell projects need to content, every time we deal with this kind of project, we need to include or integrate automation part. As you know, we are a testing equipment company, we do manufacturing automation part. So sometimes we tend to be very selective on the project we select because if we need to bring a lot of automation parts, then we probably take some kind of price pressures, especially from China's system integrators. So for some projects, so we tend to bidding some approaches that deal with European car battery cell manufacturing phases instead of China local EV battery cell, for the China local car, okay? And so our challenge was, our main focus, mostly on battery packs, battery modules and also charging stations.
And we do see this part of business, I mean the customers' investments continue will start to picking up from second quarter. Because the first quarter, I think you already read from the market. I think I review our power testing sectors in all the testing equipment, that product sectors in the first quarter. I think pretty much in line with the market expectation. I think most of the -- some of the testers upgrades or investment is come from the panel industry. And -- but I think the -- we do start to see some of picking up, especially from battery pack and battery module investment. And we believe this kind of momentum will continue for the rest of the 3 quarters. And regarding to our metrology category. Okay. Metrology is simply, they do have a general term, in overall market it's called optical inspection. But how it's different to general kind of optical inspections, okay. Metrology is to measure, it's mostly related to measurement. And mostly is using for foundry process, foundry process, not the back end so-called cosmetics inspections. And this is the product sectors that we have been developed for several years. And our core technology, which is Hong Kong technology is white-light interferometric. And as you noticed that 2 years ago, we also acquired a company called Camtek, which is they have core technologies, is white-light triangulation, all about this is related to metrology because you need to measure because it's due to stack up process or new process or foundry process. So giving this kind of new, you can say, new process, so they need to add a several testers called metrologies to measure the die size during the foundry process. So we don't -- this is nothing to deal with cosmetics, which is very back end. And we believe this kind of technology. We do -- in the past one year, maybe we have such instance, slow down in the project in the -- exchange of technology between Chroma and Camtek. But I think we continue to develop a new tester, which is to cover metrology. And we believe this kind of -- the last year, we do have a sales contribution. And then this year also, we already have some backlog on hand. And we believe this kind of metrology testers by adding some to these customers will help us, the semiconductor and photonics sectors. I think maybe in the earlier time, the next 2 or 3 years, our -- these testers will be reached close to or over 50% of testing equipment business. But as you know, because the semiconductor, the ASP is relatively higher compared to general power industry. So this is all for this question. I think there's no more questions. So we -- I think we will wrap up. Paul, you'd like to comment?
Okay. Unless you have any questions right now. Otherwise, we are going to, well, turning on this conference. But again, thanks for your attention and also for your ongoing support to Chroma. And we believe well, the second quarter and onwards, we're going to -- we're making our efforts, our best efforts and to make the contributions to our investors. Thank you. Bye-bye.