AWEA — Investor Presentation 2017

Aug 31, 2017

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AWEA MECHANTRONIC CO.,LTD. Company Presentation

BY BRUCE KANG
General Manager
2017/08/31

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Presentation Outline

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 Market

 AWEA Group

 Products

• Market Trend

 Operating Performance

• Production Base Layout

• of the three places

• 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

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Machine tools
80% 20%
Cutting Forming
40% 25%
AWEA GOODWAY
EXTRON
4
EDM
Lathe
Machining center Broaching machine Milling machine Drilling machine Grinding machine Planning machine Planning machine Wire-cut machine Plastic forming Press machine Folding machine
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Importance of Machine Tools

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Crank Shaft Turning Center

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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 ( D ~~ONGGUAN )~~

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AWEA ( SHANGHAI ) / ~~8,600 m²~~

500 m²

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Global Sales Network

Los Angeles

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YAMA SEIKI / 20,000 m² Daughter company 100% owned by GOODWAY group

Swede Denma rk n Germa ny Pola nd Finla nd U. NetherlK. and Fran Spaice n Portu gal

Japan Pakist an Thaila Indi nd Vietna a Malays m ia Singapo re Indon esia

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

New Zealand

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 2017/08

• Capital:NT$965m (USD$32m)

• Employees:505(Hsin-Chu factory:230,Tai-Chung factory:260,other:15)  RD members:65

• 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 A X T R O N
MACHINERY INT’L INT’L ( 嘉 興 )
INVESTMEN INVESTMEN
INC
T CO.,LTD T LIMITED
100%
AWEA 100% B-Way 100% Billion-Way SHANGHAI
Mechantronic (Cayman)Co., (Cayman) Co., (BEST WAY)
Ltd. Ltd.
100%
SUZHOU
(DAWEA)
28.58%
YAMA SEIKI
USA, INC.
100%
SUZHOU
(AWEA)
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Featured Products

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Featured Products - Extra-lar e Machinin Centers g g

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Production Base: Hsinchu Advantage: Largest in Taiwan with working area: 20,000 x 7,000 x 1,400 mm

Application: Extra-large working piece

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MCP Series

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LG Series

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Featured Products - 5-axis Machinin Centers g

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Production Base: Hsinchu, Taichung Advantage: Comprehensive lines with loading up to 1,000 kgs Application: High efficiency production for complex parts, integrated with robots for light-off productions

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FV Series

FCV Series

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Featured Products - 5-axis Machining Centers

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Production Base: Hsinchu, Taichung Advantage: Comprehensive lines with loading up to 1,000 kgs Application: High efficiency production for complex parts, integrated with robots for light-off productions

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MEGA5 Series

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Featured Products - Horizontal Machinin Centers g

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Production Base: Taichung Advantage: Comprehensive lines for various demands, auto pallet changer

Application: Automobile, oil & gass industries

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AH Series MB-APC Series

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Featured Products - Borin Mills g

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30T

Production Base: Hsinchu, Taichung Advantage: Working table for heavy loading (30 tons) , automatic attachment heads Application: Large molds, energy industries

20T

15T

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12T

10T 6T BL Series 5T

8T

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Featured Products - 5-face Double Column Machines

Production Base: Hsinchu Advantage: Working area up to 8000 x 4000 x 2650 mm Application: Large molds, rail, oil & gas industries

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MVP Series

HVM Series

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Featured Products -

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Hi h s eed Machinin Centers g p g

Production Base: Hsinchu, Taichung Advantage: Acceleration RG5 series up to 0.5G, AG5 series up to 0.5G

Application: Aerospace, high precision mold industries

RG5 Series

AG5 Series

X / Y /Z axes driven by high speed ballscrews

X / Y axes driven by high speed linear motor

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Featured Products -

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Double Column Machinin Centers g

Production Base: Hsinchu, Taichung, Wujiang (China) Advantage: Comprehensive lines – X travel: 2500 – 8000 mm, Y travel: 1600 – 4000 mm, Z travel: 760 – 1400 mm Application: A variety of precision industries

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Featured Products - Vertical Machinin Centers g

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Production Base: Taichung, Wujiang (China) Advantage: Comprehensive lines - boxway & linear guideway BM(boxway) X:850~2500mm, Y:600~1000mm, Z: 600~1000mm, AF(linear guideway) X:510mm~1800mm, Y:400~800mm, Z: 330~800mm Application: Mold, automobile, bicycle parts, aerospace, photoelectric industries

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Market Trend

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Self-developed Attachment Heads

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- -
萬向頭 手動 萬向頭 自動
-
35 度頭 自動
- -
延長頭 自動 臥頭 自動
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International Cooperation Attachment Heads

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AWEA Model	TIN- 6324	COM- 6324	COM- 10015	STR- 10012	NOV- 6324L	NOV- 10015
Electro Spindle Specificat ions	HSK -A63	HSK -A63	HSK -A100	HSK -A100	HSK -A63, long nose	HSK -A100
	Max. Speed - 24000rpm	Max. Speed - 24000rpm	Max. Speed - 15000rpm	Max. Speed - 12000rpm	Max. Speed - 24000rpm	Max. Speed - 15000rpm
	Nominal power - 27kW	Nominal power - 42kW	Nominal power - 50kW	Nominal power - 40kW	Nominal power - 42kW	Nominal power - 50kW
	Nominal torque - 40Nm	Nominal torque - 67Nm	Nominal torque - 95Nm	Nominal torque - 248Nm	Nominal torque - 67Nm	Nominal torque - 95Nm

Italian-made 2-axis Head

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Market Trend –Automation

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 BL-FM with Emena head

 Head exchangeable

 Automatic universal head(2.5[o] /2.5[o] ;1[o ] /1[o] )

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Market Trend –Automation

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-  BL FM with Emena head

• High power spindle motor(104KW)

• High speed built-in spindle at 8000RPM

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Market Trend – Attachment Head Application in Automobile Industry

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Market Trend – Attachment Head Application in Automobile Industry

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Operating Performance

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Financial results

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Revenue cost net income and EPS , ,

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Unit:NT/Thousand
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4,500,000
4,000,000
3,500,000
3,000,000
2,500,000
2,000,000
1,500,000
1,000,000
500,000
0
2011 2012 2013 2014 2015 2016 2017/H1
Revenue 3,434,628 3,670,290 2,992,668 3,913,307 3,806,785 3,636,760 2,011,047
Cost 2,639,695 2,804,424 2,338,565 3,059,319 3,023,515 2,881,755 1,631,097
Net income 247,352 266,208 235,978 279,778 275,440 137,463 38,272
EPS 2.78 2.89 2.56 2.96 2.97 1.42 0.42
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Financial results--Dividends

year	2016	2015	2014	2013	2012
stocks	-	0.5	-	-	-
Cash	0.7	0.5	2.2	2.0	1.5
TOTAL	0.7	1.0	2.2	2.0	1.5

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Benchmark-O eratin ex enses rate p g p

Benchmark-Operating expenses rate	Benchmark-Operating expenses rate	Benchmark-Operating expenses rate	Benchmark-Operating expenses rate	Benchmark-Operating expenses rate	Benchmark-Operating expenses rate	Benchmark-Operating expenses rate
year 2017H1 2016 2015 2014 2013 2012 AWEA(1530) 12.93% 13.47% 14.09% 14.04% 14.17% 13.50% GOODWAY(1583) 15.51% 16.56% 15.69% 15.08% 15.87% 14.92% KAFO(4510) 14.94% 17.35% 17.08% 14.69% 14.21% 14.58% TONGTAI(4526) 21.66% 20.66% 22.78% 17.91% 18.64% 17.53% TTT(6609) 13.69% 15.47% 13.71% 13.45% 12.50% 12.83% 單位：%
year	2017H1	2016	2015	2014	2013	2012
AWEA(1530)	12.93%	13.47%	14.09%	14.04%	14.17%	13.50%
GOODWAY(1583)	15.51%	16.56%	15.69%	15.08%	15.87%	14.92%
KAFO(4510)	14.94%	17.35%	17.08%	14.69%	14.21%	14.58%
TONGTAI(4526)	21.66%	20.66%	22.78%	17.91%	18.64%	17.53%
TTT(6609)	13.69%	15.47%	13.71%	13.45%	12.50%	12.83%

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Marketing Share

EUROP

AMERICA

2014/2015/2016/2017H1 10%/12%/9%/9%

2014/2015/2016/2017H1 25%/26%/26%/19%

ASIA

2014/2015/2016/2017H1 9%/4%/6%/10%

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CHINA

2014/2015/2016/2017H1 25%/32%/34%/33%

TAIWAN

2014/2015/2016/2017H1 31%/26%/25%/29%

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一 Market Revenue ( )

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單位：台 / 新台幣百萬

區域別	區域別	區域別	2017H1	2017H1	2016	2016	2015	2015	2014	2014	2013	2013	2012	2012	2011	2011
			unit	amt.	unit	amt.	unit	amt.	unit	amt.	unit	amt.	unit	amt.	unit	amt.
China		Bridge	56	333	90	698	106	857	73	663	78	546	78	757	102	723
		C type	214	311	292	496	140	295	86	229	77	146	55	133	78	183
sum			270	644	382	1,194	246	1,152	159	892	155	692	133	890	180	906
Taiwan		Bridge	30	259	60	395	58	388	70	377	72	441	62	333	67	466
		C type	157	292	228	452	271	535	367	731	255	506	196	399	228	473
sum			187	551	288	847	329	923	437	1,108	327	947	258	732	295	939
Koera		Bridge	15	102	10	66	5	40	6	39	8	58	7	86	33	267
		C type	5	15	5	17	10	25	5	12	-	-	6	11	18	58
	sum		20	117	15	83	15	65	11	51	8	58	13	97	51	325

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二 Market Revenue ( )

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Unit ： set/NT million

Reg.	model	2017H1	2017H1	2016	2016	2015	2015	2014	2014	2013	2013	2012	2012	2011	2011
		unit	Amt.	unit	Amt.	unit	Amt.	unit	Amt.	unit	Amt.	unit	Amt.	unit	Amt.
Italy	Bridge	5	31	5	30	8	50	9	51	-	-	4	27	3	22
	C type	63	126	92	202	128	261	94	217	33	88	70	187	58	146
sum		68	157	97	232	136	311	103	268	33	88	74	214	61	168
German	Bridge	-	-	-	-	-	-	1	9	-	-	-	-	1	5
	C type	11	40	26	90	24	79	19	70	25	86	17	61	-	-
smm		11	40	26	90	24	79	20	79	25	86	17	61	1	5

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5-axis Machining Centers revenue

Unit ： set/NT million

	2017H1	2017H1	2016	2016	2015	2015	2014	2014	2013	2013	2012	2012
model	unit	Amt	unit	Amt	unit	Amt	unit	Amt	unit	Amt	unit	Amt
FCVSeries	7	32	28	152	13	64
FMVseries			1	12			2	10	5	33	2	20
Fvseries			1	3			4	17
MEGA5series			2	34			1	33	2	47	2	73
sum	7	32	32	201	13	64	7	60	7	80	4	93

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Production Base Layout of the three places

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Production Base Layout of the three laces p

 Hsinchu factory

 The 3[rd] time expansion  Build ： 2018/Q1

 Da Pu Mei factory

 Scale ： 30,000m[2]  Build ： 2017/Q4

 Taichung factory

 Plant refined

 In China

 Best Way assembly Line

 DAWEA professional machining workshop

 Wujiang factory

 Scale ： 66,700m[2] (With Goodway)

 Start ： Q3 in 2013  The 2[rd] time expansion2017Q4

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Hsinchu factory

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Da Pu Mei factory

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：  Scale 30,000m[2]

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Wujiang factory

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車間三：約 7360 平方米
1F-3F （研發車間）
車間二：約 13121.76 平方米
1F （大跨度車間）
 基地面積: 54,718平方米
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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.

• Central banks are raising the interest rate, market have .

• signs of warming up around the world

• Aerospace parts manufacturing localization creates new opportunities.

• Strong demand on semiconductor & LCD 10.5 generation

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

• Raw materials cost raising.

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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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