AWEA — Investor Presentation 2016

Aug 24, 2016

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AWEA MECHANTRONIC CO.,LTD.

Company Presentation

BY JASON  HSU
 Spoke man
2016/08/24

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Presentation Outline

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 Market

 AWEA Group

 Products

 Operating Performance

 Current market situation& Competitive strategy

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What is Machine Tool ?

• Machine Tool is the machine to produce the parts of a machine.

It has high quality of technology, and reflects the industry capability, such as Japan , German , US and Italy .

• Most of the parts and the moulds of the plastic, quartz and electronic

• components need machine tools to do machining.

。 It is a big market and not easy to be replaced.

• Main applications  Automobile component

• molds 30%

• Hi-precision parts 30%

• Aerospace components

• machining 10%~20%  3C industry 10%

• Others 10%

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The T es of Machine Tools yp

Machine tools 80% 20% Cutting Forming 40% 25% AWEA GOODWAY

EXTRON

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Importance of Machine Tools

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Crank Shaft Turning Center

Cylinder

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Bumper Mold

Aluminum Wheel

Bridge Type Machining Center

Wheel Turning Center

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Wheel Mold

Brake Disk

Vertical Turning Center

Vertical Turning Center

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Importance of Machine Tools

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Hub Precision Parts Horizontal Boring Mills Turning Center

Turbo-propeller 5-axis Turning Center

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Company Profiles

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Group Members

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GOODWAY MACHINE CORP.(Taiwan&China) CNC Turning Center Manufacturing / Since 1975

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AWEA MECHANTRONIC CO.,LTD. .(Taiwan&China) CNC Machining Center Manufacturing / Since 1986

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YAMA SEIKI USA., INC.(America)

Sales of Turning Centers & Machining Centers / Since 2000

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 YIH CHUAN MACHINERY INC.

CNC Machining Center Manufacturing / Since 1972

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Operating Centers ─ Taiwan

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GOODWAY Headquarters / 18,600 m² Taipei Hsinchu Taichung

Chiayi

GOODWAY CTSP Branch / 26,600 m²

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EXTRON Headquarters / 10,400 m²

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AWEA Headquarters / 26,000 m²

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AWEA CTSP Branch / 26,600 m²

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GOODWAY GROUP Chiayi Branch 100,000 m²

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Operating Centers ─ CHINA

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Beijing

shangha i Wujiang Dongguan

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GOODWAY GROUP ( WUJIANG ) 66,800 m²

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GOODWAY GROUP ( AWEA ( SHANGHAI ) / D ~~ONGGUAN ) 8,600 m²~~

500 m²

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Global Sales Network

Swede Denma rk n Germa ny Poland Finla Russi nd Switzerl a U. and Roma NetherlK. nia Hunga and Fran ry Ukraine South Cana Spaice Czech Korea da n Portu BulgariRepublic gal Isra Turkey a Japan Los el Angeles Ital Croa Pakist tia y Slove an Thaila nia Egyp Indi nd t a Vietna Malays m ia Singapo re Indon esia Bra zil / 20,000 m² South Africa Austra

YAMA SEIKI / 20,000 m²

New Zealand

Daughter company 100% owned by GOODWAY group

Argent ina Over 60 professional dealers around the world in 43 countries

Company Profiles

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 1986 AWEA was founded in Hsin-Chu,Taiwan.

 1998 Entered the OTC market.  2000 Became the listed company in TSEC.

End of 2014/08

• Capital:NT$920m (USD$30m)

• Employees:486(Hsin-Chu factory:216,Tai-Chung factory:270)

• RD members:68

• Major products: C type and bridge type CNC machine center

 Subsidiaries : Best Way Shang-Hai , Dawea Su-Zhou, Wu-jiang Su-Zhou (all 100% holding),EXTRON(60% holding)

Certification

• ISO 9001 Quality System --Germany TUV CERT

• ISO 14001 Environmental System --Germany TUV CERT

• CE European Safety System --UK AMTRI

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Investment

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100% 100% 100% 60% YIH CHUAN .AXTRON AXTRON AXTRON( MACHINERY INT’L INT’L 嘉 興 ) INVESTMEN INVESTMEN INC T CO.,LTD T LIMITED 100% AWEA 100% B-Way 100% Billion-Way SHANGHAI Mechantroni (Cayman)Co., (Cayman) Co., (BEST WAY) c Ltd. Ltd. 100% SUZHOU (DAWEA) 28.58% YAMA SEIKI USA, INC. 100% SUZHOU (AWEA)

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Products

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Market position strategy-global view

Targeting medium-class: good market size with healthy margin

Controller Marker Machine tool makers FANUC Heidenhain Mitsubishi High class Germany, Japan SIEMENS Machines Swiss PC BASE (Price more than USD300,000.00) Medium Class machines Taiwan Korea (Price between USD100,000.00 [ AWEA ] AWEA and USD300,000.00) Mainland China Low cost machines (Price less than USD100,000.00)

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Main Products

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 5-axis Machining Center Series

 Work-piece side rotation / Tooling side rotation  5-face Machining Center Series

 Moving cross-rail / Multi-storage automatic head changer / High efficiency automatic head changer

 Bridge Type Machining Center Series  X : 1,600 ~ 20,000 mm / Y : 1,200 ~ 7,000 mm / Z : 760 ~ 1,400 mm

 Horizontal Boring Mills Series  X : 1,500 ~ 4,000 mm / Y : 1,200 ~ 2,400 mm / Z : 900 ~ 1,700 mm  Vertical Machining Center Series

 X : 510 ~ 2,500 mm / Y : 400 ~ 1,000 mm / Z : 330 ~ 1,000 mm

Feature Models of AWEA

MB-APC Series

High Precision Boring Mills w/ Auto Pallet Changers

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BM/AF-APC Series

~~VMC w/ High Efficiency~~ Auto Pallet Changers

LG-20070 Series X-axis Travel : 20,000 mm Y-axis Travel : 7,000 mm

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AH Series

Ultra Performance Horizontal Machining Centers

MVP Series Movin Cross-Rail g Multi-storage AHC

Feature Models of AWEA

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FV-960

FCV-620

Ultra Performance 5-Axis Machining Center

FCV-800

Gantry Type 5-Axis Machining Center

MEGA5 Series A / C axes milling head

5 axes Simultaneous Machinin g

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Operating Performance

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Financial results

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Revenue cost net income and EPS , ,

Unit:NT/Thousand

4500000
0 500,000 1,000,000 1,500,000 2,000,000 2,500,000 3,000,000 3,500,000 4,000,000 ,,
	2010	2011	2012	2013	2014	2015	2016(H1)
Revenue	2,952,011	3,434,628	3,670,290	2,992,668	3,913,307	3,806,785	1,710,729
Cost	2,162,261	2,639,695	2,804,424	2,338,565	3,059,319	3,023,515	1,342,232
Net income	231,760	247,352	266,208	235,978	279,778	275,440	66,436
EPS	2.62	2.78	2.89	2.56	2.96	2.97	0.72

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Financial results--Dividends

year	2011	2012	2013	2014	2015
stocks	-	-	-	-	0.5
Cash	1.5	1.5	2.0	2.2	0.5
TOTAL	1.5	1.5	2.0	2.2	1.0

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Marketing Share

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AMERICA EUROPE 2014/2015/2016(H1) 2014/2015/2016(H1) 10%/12%/7% 24%/26%/22%

CHINA 2014/2015/2016(H1) 26%/32%/35%

ASIA TAIWAN 2014/2015/2016(H1) 2014/2015/2016(H1) Others 9%/4%/7% 31%/25%/28% 0%/1%/1%

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Market & Competitive strategy

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Current market situation

• Currency exchange rate fluctuation creates new challenges.

• Demand for automobile industry remains.

• Quantitative easing policies around the world stimulates new demands.

• Aerospace parts manufacturing localization creates new opportunities.

• Government policy for intelligent machines and indigenous naval ship building creates new requirements.

• Raw materials cost remain at low range

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O eratin risk p g

• Goodway group already grows to a scale competing with international major players.

• Government support is limited. No international agreement on tax deduction. Having a unfavorable stance competing with major export countries.

• Currency exchange rate fluctuation is too big. NT$ recent appreciation is not helpful for export market.

 Competition from domestic makers using low price strategy is harmful for the industry long term development.

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Com etitive strate p gy

• Comprehensive product range.

• Well established global sales network.

 Accommodated production bases (Taiwan-High production efficiency：China-Big market potential, has regional tax deduction agreement and export subsidies)

• Continuous new product development and RD investment.

• Group resources support.

• Long term production base expansion for future development requirements.

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Thank you & Q & A

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