AEC — Investor Presentation 2018

Nov 21, 2018

亞力電機股份有限公司說明會
Reporter：C.P. Cheng 鄭朝彬
(President)
Date：Nov. 21, 2018
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Disclaimer•
This document and any verbal presentation accompanying it includes prediction of financial, market demand and products sales. Any prediction stated in this presentation may vary from the actual operating results and financial conditions due to significant contingencies or other unknown factors that AEC has no way to control. The prediction and ongoing statements has made by AEC are reflecting current conditions. AEC shall not be held liable for updating or modifying this presentation and accompanying information.
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Notes:

Agenda•
1、Company Overview ………..…….4.
2、Corporate Philosophy …….………10.
3、Products …………………..….……11.
4、Market Demand ……………...……17.
5、Corporate Strength ……...………18.
6、Key Customer Reference …………19.
7、Research & Development .………20.
8、Ongoing Market Strategy …………29.
9、General Operating Status..…………30.
10、Future Market Plan …….………32.
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1、Company Overview •
Established on Sep.1968 (50years)
Headquarter : Taipei Nankang Software Park
Listed in TWSE since 1994
TWSE Code：1514
Paid-in Capital : NTD 2 Billion and 10 Million
Number of Employee
:580

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Company Overview •
Factories & Products:
Hsinchuang, Taiwan
Telecom Equipment
3-Phase Uninterruptible Power Supply Systems
PV Inverter
Batter Charger of Railway& EV Charger of Bus
Smart Grid Transmission & Distribution Apparatus
Yangmei, Taiwan
Switchgear(High/Low Voltage, MCC,GIS)
Transformer(Oil-immersed, Cast resin, Amorphous core)
Xizhi, Taiwan (ARES Technology)
Single-Phase Uninterruptible
Power Supply

5

Company Overview •
Oversea / Strategic Partner :
AEC International S.r.l.(Europe)
Impact Power, Inc.(North America)
PT. Sintra (Indonesia and Southeast Asia)
PHD Powerhouse(South Africa)

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Company Overview •

Local Subsidiaries

Nissin-Allis
Electric

Li-Min Industrial

ARES Technology

Taiwan Marine Electric

Air King
Industrial
Allis Communication
Nissin-Allis Union
Ion Equipment
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Company Overview
-Investment (domestic) •

Company　 Business Scope 　 Capital 　 Shareholding %
Allis GPS NTD100million 76.9 %
Communications
Ares Technology UPS NTD150 million 99.6 %
Air King Industrial　 Engineering Project NTD49.5million 83.1 %
Nissin-Allis Electric GIS　　 NTD300million 30.0 %
Nissin-Allis Union Sales and Maintenance NTD100millio 40.0 %
Ion Equipment of the Ion Implanter and
Related Equipments

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Company Overview
-investment (oversea) •

Company　 Business Scope 　 Capital 　 Shareholding %
AYM(Guam) Electrical Engineering US$1,000 40.0 %
Hengyuan Electrical Switchgear US$ 800 100.0%
Allis Electric
(China)
Qingdao Liming Telecom Equipment US$2,600 65.4 %
Industry (China) Electrical Apparatus
PHD(South Africa) Sales of UPS US$670 45.0 %

(In Thousands Of US Dolla rs)
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2、corporate PHILOSOPHY•
Harmony
　 AEC is committed to providing quality products and excellent service to satisfy all its customers and pursue harmony between it employees, customer and the society.
Innovation
AEC keeps improving ideas, products, techniques, processes, management and services for continued growth.
Responsibility
　 AEC responds to the quality of work, life, and society and share the success with our customers, employees, and society.
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3、Product portfolio

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Product introduction-A.switchgear•

High voltage switchgear
Low voltage switchgear
Motor control centers(MCC)
SF6 Gas-insulated switchgear(GIS)

12

Product introduction-B.tRANSFORMER•
Cast resin transformer
Amorphous core transformer
Oil-immersed transformer

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Product introduction-C. t&d aPPARATUS•

SF6 Pole-mounted load break switch 24kV 630A 12.5kA (I.C.) maximum value
4-way – SF6 Pad-mounted load break switch

2-way - SF6Pad-mounted load break switch
Oil switch(single phase) 14.4kV 200A
Vacuum Switch
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Product introduction
-D.Power electronics product•
Switch mode rectifier(SMR)
Uninterruptible power supply(UPS)
EV Charger(Charger for Electric vehicle)
Battery Charger for Railway
Photovoltaic Inverter(PV Inverter)

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Product introduction
-E. electrical engineering •

Rail Industrial：Taiwan High Speed Rail、Taiwan railway、MRT 、Light Rail Transit
Green Energy System
UPS commissioning
SCADA & Other electrical engineering

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4、Market demand•
Electrical Market Demand
Telecommunication Market Demand
High-tech industries : Semiconductors 、 Optoelectronics、 Petrochemicals 、Steel、?Public engineering, etc..
Rail Industrial：
（Taiwan railway、MRT、Taiwan High Speed Rail、 Light railway related equipment and engineering）
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5、Corporate strength•
50 years of accumulated experience which established the professional expertise and solid reputation.

Offering professional＜Customized＞service
Faultless production and system integration capability
Reputation from customer and support
Autonomous technology and research & development capability

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1. Key customers reference
   Public utilities:
   Taiwan Power Company
   Taiwan High Speed Rail(THSR)
   Taiwan Railways Administration(TRA)/MRT
   High Technology Industry & Heavy industry:
   TSMC
   UMC
   China Steel Corp.
   Chinese Petroleum Corp.
   Communication:
   Chunghwa Telecom
   Taiwan Mobile/Taiwan Fixed Network
   Falcon
   Greek PTT
   PHD

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1. research & development

Item
Automation of power distribution underground 4-way Pad Mounted Automatic Load Break Switch(2B2S)

Turn to sales
After completion of development in Dec. 2014, total quantity over 3,400 units, with total amount of 1.72 billion NTD has been received from Power Company, and the expected demand in next 5 years is 1,000 units per year from local power company.
Moreover, in the future, the South East Asia will be a very potential market for exportation.

20

Technology & development •

Item
Pole-Mounted load break switch GP

Turn to sales
After the completion of development, several orders of manual & auto switch with total quantity over ten thousand units have been received from power companies. It is estimated that an output value of 120 million NTD per year will be added in the power market.
Furthermore, we have successful feedback from the exportation of South East Asia market, with orders of more than 1,490 units received.

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Research & development •
Item
pad-mounted switch manual 4-way earthed type
Turn to sales
after its completion of development, and got the approval in Apr. 2017, 2 orders of total 473 units with amount of 120 million NTD has been received from power companies.
the demand expected in the power market is 500 units per year.

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research & development •

Item
PV Inverter

Turn to sales
Our government is pushing the solar power policy with target of establishing 20GW by 2025，which will increase of our annual turnover by adding about hundred million NTD and with gradual growing every year.

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research & development •

Item
TRA’s signal control & monitoring system

Turn to sales
With years’ cooperation with Japanese Nippon Signal Co., Ltd., we get the orders from TRA, and have our rail industry technology basis well established.
our Signal Engineering Division has been established in order to continue the cooperation with our Japanese partner, to develop the coming huge market of rail industry in government prospective plan.

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research & development •
Item
O.C.S.cantilever supporting devices & installion contruction for rail
Turn to sales
In recent years, orders of more than billion NTD have been obtained from TRA & New Taipei City’s MRT, and have our rail system building/ contracting capability well established. (high speed rail,TRA, light rail, etc.)
The projects under the process of construction include TRA, Tanshui light rail & Anken light rail O.C.S. systems.

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research & development •

Item
Telecom. switching control room/communication base station DC high frequency power source switch

Turn to sales
Promoting aggressively to 4G/5G markets.

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research & development •
Item
Charging devices for electrified bus
Turn to sales
The government has announced its target of full-scale electrification on urban buses by 2030, which creates a demand of ten thousand of electrified buses.
Our company has cooperated /jointed venture with Tangeng Advanced Vehicles Co., Ltd., and established totally about 50 charging stations, in Taoyuan, Taichung, Tainan, Chinmen,etc. Per Tangeng’s estimation, the demand of electrified buses in the coming 10 years will be greatly increased, which will also drive up the demand of charging and energy saving facilities.

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research & development •
Smart Grid：Feeder Automation、SCADA System

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8、ongoing market strategy
-Steady growth development plan
Continue to increase own technology and added value to meet global intelligentize trend
Intelligentize、Energy Saving
Integrating SCADA with electrical product

HV Product

PV Inverter
Railway Signal、Station equipment
OCS
Photovoltaic System
Railway Vehicle / Charging equip for Electrical bus
Following Government policy on investing green energy and railway vehicle infrastructure
Renewable & Railway Industry

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9、general operational status•?-consolidated revenue movement in past 5 years

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General operational status
-Net income

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EPS　　　 0.55　　　　 0.59 　 　　　0.51　　　 　0.58　　　 　0.72
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10、future market plan
-market opportunity •
Business opportunity in Railway infrastructure：
In order to boost the domestic economy and improve the electrification of the round-the-island railway, the Executive Yuan plans to invest in the Taiwan Railway for NTD$500 billion over ten years. The company's charging equipment for rail vehicles and OCS, CTC and signal control also to be “newly implemented” or "massive replacement" In the light rail sector, the company will continue to strengthen the market development of light rail for OCS and rectifier transformers, AC and DC switchboards and other products.
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10、future market plan
-market opportunity(conti.) •
Business opportunity in semi-conductor factory：
In recent years, it has had excellent performances in semiconductor factories such as Hsinshu Science Park, Tainan Science-based Industrial Park and China. At present, well-known semiconductor manufacturers in China still have plans to expand their factories. It is expected that the following cases will still be able to be worked under the company's efforts. Outstanding performance.
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10、future market plan
-market opportunity(conti.) •
PV INVERTER：
In line with the government policy, new products with a capacity of 30kW or more have been developed successively, and domestic and foreign customers have been arranged, and there are also great demands in emerging developing countries. The company has established the Green Energy Division, which combines production, sales and research, and has achieved significant growth.
Switch Mode Rectifier (SMR)：
High-efficiency new models have been completed, which has met the needs of telecom operators 4G and future 5G communication power systems.
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10、future market plan
-market opportunity(conti.) •
Charging equip for E-Bus：
In the next 12 years, there will be about 10,000 electric buses inside Taiwan. With the cooperation of Tangeng Advance Vehicle Co., Ltd, the company has started to build DC charging piles on the outlying islands and the island. In the future, it will cater to the demand for DC charging facilities for electric buses and continue to expand the market.
Energy storage equipment：
The energy storage equipment is the reuse of the electric bus for the replacement of the battery, which can achieve the purpose of peaking and filling the valley energy management and stabilize the function of the solar photovoltaic system. The future has great development potential.

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10、future market plan
-market opportunity(conti.) •
Oversea market opportunity：
In addition to strengthening the existing foreign distribution system (Europe, Europe, Southeast Asia, South Africa countries)?In line with the government's southward policy, it will rise to emerging markets such as Southeast Asia.?The infrastructure needs are strong. The company will grow its experience and products and technologies with competitive advantages, such as power switchgear, molded transformers, solar photovoltaic inverters/storage equipment, electric bus/rail vehicle chargers... And system integration technology, through the local distribution agent or strategic alliance to quickly transfer to create greater business opportunities
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Thank you for your attention
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