Asia Vital Components Co., Ltd. — Call Transcript 2018

Mar 22, 2018

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Y2017 Earnings Conference

March 22, 2018

AVC Confidential

Disclaimer

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The above statements that pertain to future projections constitute the expectations, opinions, outlooks, or predictions of our company and its affiliates based on information available at the time the statements were made. Such statements may be affected by known and unknown risks and inherent uncertainties, the existence or emergence of facts or factors that differ from the assumptions, suppositions, or judgments of the Company, or other factors. Consequently, there may be significant discrepancies between actual results pertaining to the Company's future earnings, management results, financial conditions, and other matters as explicitly or implicitly referred to in the statements and the content of such statements.

The presentation is run exclusively for the purpose of providing information and not for the purpose of soliciting investments or recommending the buying or selling of specific shares or products. Company makes no warranty concerning the accuracy or completeness of the information and will not be liable for any damages arising out of use of the Information thereof.

本報告內容係依現有資訊而做成，上述說明中的財務或相關資訊可能包含一些對本公司 及其子公司未來前景的說明，這些說明易受重大的風險和不確定性因素影響，致使最後 結果與原先的說明迥異，是本公司特此聲明，本報告中的內容，僅為資訊流通之目的而 公佈，並非投資建議，本公司不對報告內容的正確性、完整性或任何使用本報告內容所 產生的損害負任何責任。

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Y2017 Statements of Comprehensive Income

Items	2016(A)	2017(A)		YoY	YoY
Sales Revenue	26,504	27,109		605	2.28%
Gross Margin	3,695	3,331		(364)	-9.85%
Gross Margin %	13.94%	12.29%		-1.65%	-11.86%
OPEX	2,259	2,177		(81)	-3.59%
OPEX %	8.52%	8.03%		-0.49%	-5.74%
SellingExpense	573	513		(60)	-10.48%
ADM Expense	435	418		(17)	-3.88%
R&D Expense	1,250	1,246		(4)	-0.33%
OperatingIncome	1,436	1,154		(283)	-19.68%
OperatingIncome %	5.42%	4.26%		-1.16%	-21.47%
Non-operatingItems	(155)	113		269	-172.78%
Pretax Income	1,281	1,267		(14)	-1.11%
Net Income	860	887		27	3.09%
Net Income %	3.25%	3.27%		0.03%	0.79%
EPS	2.43	2.51		0.08	3.29%

＊ All the figures are audited/ reviewed by CPA; Currency is shown as NTD in million

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Y2017 Statements of Comprehensive Income

Items	2017.Q4	2017.Q3	2016.Q4		YoY	YoY	QoQ	QoQ
Sales Revenue	7,551	6,819	7,192		359	4.99%	732	10.74%
Gross Margin	911	900	1,097		(186)	-16.95%	12	1.29%
Gross Margin %	12.07%	13.19%	15.26%		-3.19%	-20.90%	-1.13%	-8.53%
OPEX	678	470	675		4	0.53%	209	44.41%
OPEX %	8.98%	6.89%	9.38%		-0.40%	-4.25%	2.09%	30.41%
Selling Expense	147	114	170		(23)	-13.55%	33	28.68%
ADM Expense	129	78	119		10	8.46%	51	66.13%
R&D Expense	402	278	385		17	4.29%	124	44.81%
Operating Income	233	430	422		(190)	-44.88%	(197)	-45.83%
OperatingIncome %	3.08%	6.30%	5.87%		-2.79%	-47.50%	-3.22%	-51.08%
Non-operatingItems	77	(83)	(7)		84	-1260.15%	160	-193.71%
Pretax Income	310	347	416		(105)	-25.37%	(37)	-10.63%
Net Income	206	247	249		(43)	-17.18%	(41)	-16.46%
Net Income %	2.73%	3.62%	3.47%		-0.73%	-21.12%	-0.89%	-24.56%
EPS	0.58	0.71	0.71		(0.12)	-17.18%	(0.13)	-17.69%

＊ All the figures are audited/ reviewed by CPA; Currency is shown as NTD in million AVC Confidential

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產品組合

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----- Start of picture text -----

Y2017
Interface
peripheral
8%
Thermal
54%
System
assembly
20%
Y2016
Interface
peripheral
System 13%
Chasiss and assembly
Thermal
Cabinet 6%
52%
18%
Chasiss and
Cabinet
29%
----- End of picture text -----

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Y2017 Non-operating Breakdown

Account Item	Y2016	Y2017
Net Interest revenue (Expenses)	(95)	(113)
Investment Revenue (Loss)	19	11
Gain (Loss) on Disposal of Fixed Assets	(145)	45
Exchange Income (Loss)	76	(11)
Others	145	68
Total	(155)	113

＊ All the figures are audited/ reviewed by CPA; Currency is shown as NTD in million

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Y2017 Consolidated B/S

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Account Items	2016.12.31	2017.12.31		YoY
Cash	7,303	6,844		(459)
Accounts receivable	6,587	6,383		(204)
Inventory	4,567	5,081		515
Current Assets	19,872	19,881		9
Non-current assets	7,751	8,333		582
Property,Plant and Equipment	5,751	5,802		51
Financial assets carried at cost - non current	59	56		(3)
Total Assets	27,623	28,214		591
Non-current Liabilities	4,558	4,362		(196)
Current Liabilities	14,459	15,025		566
Accounts Payable	9,092	9,725		634
Total Bank Loans	5,885	5,772		(113)
Total Liabilities	19,017	19,387		370
Stockholders Equities	8,398	8,591		193

＊ All the figures are audited/ reviewed by CPA; Currency is shown as NTD in million

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Y2017 Key Indicators

Key Index	2016.12.31	2017.12.31		YoY
Current Ratio	137.44%	132.32%		-5.12%
Quick Ratio	104.59%	97.17%		-7.42%
Debt Ratio	68.85%	68.72%		-0.13%
AR turnover days	86	87		1
Inventory turnover days	74	74		0

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Y2017 Cash Flows

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Account Items	2016年度	2017年度
Cash and cash equivalents at beginning of period	7,706	7,303
Depreciation and Amortization expense	709	631
Cash flows from (used in) operating activities	2,154	1,806
Capital Expenditures	(1,911)	(991)
Net cash flows from (used in) investing activities	(1,989)	(1,519)
Net cash flows from (used in) financing activities	(32)	(436)
Cash and cash equivalents at end of period	7,303	6,844
Free cash Flow	242	815

＊ All the figures are audited/ reviewed by CPA; Currency is shown as NTD in million

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Ｑ＆Ａ

http://www.avc.co

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