CHELIC — Investor Presentation 2020

Apr 30, 2020

1

Company information

==> picture [321 x 231] intentionally omitted <==

• Establish：November, 1986

• IPO：October, 2015

• Market Value：NT 3,344,000,000

(USD 111,500,000)

• President：MR. Barton Yu

 Main Production Plant ：Taiwan, Shanghai, Ping Hu(Bang Yen)

2

Brand meaning

99% of revenue comes from brand CHELIC

TAIWAN CHELIC CO.,LTD. manufactures pneumatic components. We believe in the specialization of production and the solid manufacturing management. Our outstanding team produces every hi-tech product with 100% effort and dedication to guarantee the supplying the best-quality pneumatic components.

We expect we play a leading role in our industry trusted by our clients and established a long term and beneficial relationship with manufactures and clients. We continually corporate and provide service to our customer and impress customer by our honest.

3

Application

Pneumatic adopted widely in industries

==> picture [321 x 250] intentionally omitted <==

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

electronic
optical
washing
robot
auto
medical
food
laser
package CNC
----- End of picture text -----

Pneumatic components can effectively transform the composed actions required for automated manufacturing. Therefore, pneumatic components are widely used in various automated production equipment. Instead of a large number of labor-intensive production processes, automated equipment could help enterprises to reduce in labor costs, production costs etc.

With the changes in machinery nowadays, our business has been engaged in various industries such as agriculture, engineering, metallurgy, mining, lathe, plastics, automobile, petrochemical, aviation and aerospace, railways, medicine, and printing industry. Owing to the diversification of industrial applications, our business will be affected less by the phenomenon of business slump.

With the new policy of “INDUSTRY 4.0”, our sales volume is still increasing even though we’ve been in the business over 30 years.

Therefore, we could proudly say that Chelic’s products – pneumatic components are the key components in your automated production equipment.

4

Air pressure device production

==> picture [566 x 313] intentionally omitted <==

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

Over the past decade, the pneumatic automation
equipment market has shown a trend of growing
year by year
----- End of picture text -----

5

Market of China

Market share %

2020 growth of pneumatic components

==> picture [204 x 199] intentionally omitted <==

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

other SMC
35% 35%
FASTO
AIRTAC
10%
20%
----- End of picture text -----

• 5G drives equipment expenditures.

• U.S.-China trade war speed up industries upgrading.

• COVID 2019

• Medium to long term growth of pneumatic components

• GDP

• Industry 4.0

• Smart manufacturing

6

Reasons for pneumatic component replacement

==> picture [378 x 315] intentionally omitted <==

• Maintenance of requirements

• Yield improvement

• Upgrading products

7

Main Production Plant

==> picture [182 x 122] intentionally omitted <==

• Employee ： 220

==> picture [36 x 12] intentionally omitted <==

• Area ： 15,500 ㎡

• Operation Item ： RD center 、 Manufacture 、 Sales

==> picture [182 x 122] intentionally omitted <==

==> picture [64 x 12] intentionally omitted <==

• Employee ： 450

• Area ： 40,000 ㎡

• Operation Item ： Manufacture 、 Sales 、 RD

==> picture [206 x 119] intentionally omitted <==

==> picture [44 x 15] intentionally omitted <==

• Employee ： 200

• Area ： 30,000 ㎡

• Operation Item ： RD 、 Manufacture 、 Sales

8

Covid-2019 impact

1. The customer will cancel the order？

Pneumatic components are components on air compressor automation equipment. Our order delivery time is short. Generally speaking, the average delivery time from order receiving to shipping is about 7-10 days. Customers' orders are short orders, so they will not be affected cancel .

2. Current order status？

At present, customer orders are mainly for mask production equipment . Especially after the Shanghai factory started, the average daily order receiving volume was around NTD 8 million, which has increased significantly by 30% to 40% in the short term compared with the same period last year. The Taipei factory has been operating 16 hours a day. The Shanghai plant has also begun night shifts.

3. Outlook for the second half of the year？

We look forward to the outlook for the second half of the year, mainly because the demand for 5G equipment will gradually increase , and the capital expenditure suppressed by the trade war in 2019 will also recover . We will use the first half of the year to actively fill up safety stocks to respond.

New plant status

1. project progress？ Mass production is expected to begin in July this year . 2. Company benefits？ Through the Pinghu Plant, our company can integrate the upstream die casting and downstream anode and baking process, which can not only reduce costs, but also shorten lead time. More importantly, these processes can also be used for external orders, which is . expected to bring an additional 100 million RMB in revenue to the group in 2021 3. Competitive Advantage？

• (1) Die-casting is a regulated industry. The Pinghu Plant has obtained a legal sewage discharge license . Many industries need to open molds. We believe there will be a concentrated order in the future.

(2) Excellent traffic location: It is close to the big city of Shanghai, the industrial city of Jiaxing on the left, Suzhou in the north, and the cross-sea bridge down to Ningbo. It is only 40-50 minutes away from our Shanghai factory, and can be quickly supplied to customers who . require

Sales trends

Sales trends

==> picture [391 x 262] intentionally omitted <==

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

1,800,000
1,600,000
1,400,000
1,200,000
1,000,000
800,000
600,000
400,000
200,000
0
2016 2017 2018 2019
Distributors 624,656 622,208 646,298 513,626
Direct 601,754 851,587 1,055,957 848,416
NTD (thousand)
----- End of picture text -----

11

Sales points

==> picture [422 x 216] intentionally omitted <==

34 Offices & 17 Sales Point in China

3 Offices in Taiwan

12

Main product

Executive unit is the majority components that implement to loading, gripping, positioning, picking and rotating.

According to function, it includes variety cylinders such as standard type, double acting, clamping, rodless, rotary type and gripper type.

==> picture [262 x 170] intentionally omitted <==

==> picture [264 x 170] intentionally omitted <==

13

Main product

==> picture [148 x 103] intentionally omitted <==

==> picture [165 x 110] intentionally omitted <==

==> picture [296 x 205] intentionally omitted <==

The valve is to control the flow direction of pressured air, to switch direction and to achieve the orders from users.

• According to variety controlling needs, mechanical valves, hand operated valves and solenoid valves provides different performance.

14

Main product

The air unit being used to filter the air, pressure adjustment and lubricate in pipelines. According to different working environment, air units includes Filter, Regulator, Lubricator and Filter Regulator.

==> picture [181 x 136] intentionally omitted <==

==> picture [180 x 136] intentionally omitted <==

15

Main product

==> picture [379 x 214] intentionally omitted <==

• Sub unit includes vacuum items, fittings, tubing and other accessories which are to match with air unit, control unit and executive unit.

16

Major sales region

==> picture [564 x 245] intentionally omitted <==

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

90.00%
80.00% 79.09% 81.42% 81.43%
77.23%
70.00%
60.00%
50.00% taiwan
40.00% china
others
30.00%
20.00%
16.49% 15.96%
14.50% 14.17%
10.00%
6.28% 4.95% 4.08% 4.40%
0.00%
2016 年 2017 年 2018 年 2019 年
----- End of picture text -----

17

Industrial percentage

Year	2020Q1	2019
Industrial	%	%
Distributors	44.47%	37.07%
Electronical	17.68%	21.86%
Pneumatic	16.12%	17.78%
Mechanical	5.92%	6.71%
Auto	1.39%	2.35%
Textile	2.66%	1.98%
Tool machine	3.08%	2.37%
Package	0.81%	0.96%
Instrument	0.86%	0.91%
Welding	1.45%	1.33%
Chemical	0.63%	0.65%
others	4.92%	6.03%
total	100.00%	100.00%

2020 年 Q1

==> picture [325 x 236] intentionally omitted <==

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

1% [1% ]
1%
1% 經銷商
5%
電子行業
3%
3%
1% 氣動行業
通用機械
6%
汽車行業
44%
服裝行業
機床設備
16% 包裝機械
儀器行業
焊接設備
化工機械
18%
其他
----- End of picture text -----

18

Pinghu investment

Chelic Zhejiang Pinghu Industrial Park

==> picture [454 x 276] intentionally omitted <==

19

Pinghu investment

==> picture [407 x 310] intentionally omitted <==

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

Anodizing and backing process
Casting factory
CNC factory
1 [st] floor: molding factory
2 [nd] floor: assembly factory
3 [rd] floor: warehouse
1 [st] floor: QC and PM dept.
2 [nd] floor: office and meeting rm.
----- End of picture text -----

• Land area- 43000 square meters

• Overall investment- RMB 180 million

 Vertical integration, which includes casting factory, two anodizing and backing process line, CNC factory, etc.

Chelic focus on vertical integration and also adapt advanced technologies to improve smart manufacturing for customers.

20

Pinghu investment

==> picture [357 x 188] intentionally omitted <==

Photo by December 2019

May 2020 Plant Construction Finished. June 2020 Acceptance and License Obtained July 2020 Start to Run Officially

21

R&D Center

==> picture [162 x 304] intentionally omitted <==

In May of year 2017, the R&D center established, now Chelic have 35 expert engineers in the R&D center

Current development scope:

A 、 Energy Saving

B 、 Vacuum in high efficiency

C 、 Industry 4.0 directions

D 、 Electrical product related to high level of industries

22

2020 Market-development strategy

• Expanding China's business bases, increasing the proportion of direct sales, and ensuring stable revenue growth.

• The R & D center continues to launch high-end pneumatic products, grasping the trend of Industry 4.0 and smart manufacturing. At present, Chelic has launched the first electro-pneumatic regulator and flow switch in Taiwan.

• The case of land purchase and construction in Pinghu, Zhejiang, China, with an investment scale of RMB 180 million, has begun in December 2018. It is expected to be put into production in the third quarter of 2020.

 Through merger other companies, integrate vertical processes, such as die-casting, grinding, pneumatic valve, electric cylinder etc., to enhance the company's competitiveness.

Electro-pneumatic regulator

==> picture [119 x 93] intentionally omitted <==

Pressure switch

23

2016-2017 Taiwan Excellence

==> picture [590 x 307] intentionally omitted <==

24

2018 Taiwan Excellence

==> picture [446 x 275] intentionally omitted <==

25

2019 Taiwan Excellence

==> picture [455 x 322] intentionally omitted <==

26

2020 Taiwan Excellence

==> picture [449 x 318] intentionally omitted <==

27

28