CHICONY — Call Transcript 2021

May 26, 2021

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CHICONY ELECTRONICS

1Q21 Results Conference Call

May 6, 2021

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Safe Harbor Notice

Chicony’s statement of its current expectations are forwardlooking statements which are subject to significant risks and uncertainties. Actual results may differ materially from those . contained in any forward-looking statements

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Chicony’s Global Manufacturing Network

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Taipei HQ
Wujiang
Thailand Chongqing Dongguan
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Ramping up New Thailand Factory Capacity

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Chicony’s New Thailand Factory

• More than one thousand employees in the new factory

 Revenue contribution to account for at least 15% of total company’s revenue in 2021

• Product pipeline includes image devices, networking products, and mouse

• To deliver NT$25B revenue when fully utilized

• Exempt from corporate income tax for 8 years

• Well-educated workforce with low turn-over rate

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Number 1 Global Market Leader in Keyboard, Camera Module, Adaptor, and IP Cam

Market share for NB keyboard, camera module, adaptor and DT keyboard all increased in 2020

38% NB Keyboard 41% DT Keyboard Number #1 Market 43% Share in NB Camera Module 2020 48% NB Adaptor 25% IP Cam

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Consistent Dividend Pay-Out Policy to Reward Investors

Chicony	2016	2017	2018	2019	2020
EPS	5.24	5.9	5.22	8.45	7.80
Cash Dividend	4.25	4.45	3.80	5.90	5.5
Stock Dividend	0.05	0.05	0	0	0
Dividend Payout %	82%	76%	73%	70%	71%
Cash Yield Rate %	5.25	6.1%	4.8%	7.1	5.2%

Source: Cmoney

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1Q21 Financial Results

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1Q21 EPS Reached NT$2.23 Driven by Strong Growth of Operating Profit

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Million NT$ 1Q 2021 4Q 2020 QoQ % 1Q 2020 YoY %
Net Sales 25,137 100.0 25,455 100.0 -1.2 18,110 100.0 38.8
COGS (20,741) (82.5) (20,967) (82.4) (15,296) (84.5)
Gross Profit 4,396 17.5 4,487 17.6 -2.0 2,814 15.5 56.2
Operating
(2,547) (10.1) (3,166) (12.4) (1,528) (8.4)
Expense
Operating Profit 1,849 7.4 1,321 5.2 40.0 1,286 7.1 43.8
Other
504 [1] 2.0 821 3.2 (1,163) (6.4)
Income/Expense
Profit Before Tax 2,353 9.4 2,143 8.4 9.8 123 0.7 1818.1
Tax (464) (1.8) (594) (2.3) (44) (0.2)
Net Income 1,569 6.2 1,251 4.9 25.4 40 0.2 3808.9
After Tax EPS 2.23 1.78 25.3 0.06 3616.7
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Note 1: Mark-to-market revaluation of Newmax was a gain of NT$276 in 4Q20 and NT$114 in 1Q21.

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1Q21 Operating Margin Hit a Record High in the Same Period of the Past 14 years

1Q20/1Q21 Gross & Operating Margins

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1Q21 gross margin set
a record high in the
same period of the
past 12 years
%
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1Q21/4Q20 Gross & Operating Margins
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OPM GPM
7.4
1Q21 operating
1Q21
17.5
margin improved 2.2
percentage point QoQ
thanks to disciplined
5.2
4Q20 control of SG&A
17.6
0.0 5.0 10.0 15.0 20.0 25.0 %
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1Q21 Operating Results

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1Q21 Revenue Jumped 39% YoY

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2018~2021 Quarterly Revenue
NT$M
2018 2019 2020 2021
30,000
26,421
25,137 25,096 25,455
25,000
20,000
18,111
15,000
10,000
5,000
0
1Q 2Q 3Q 4Q
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Outlook

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Gaming NB to Grow 16% YoY in 2021

Global Gaming PC and Monitor Market Hit New Record High in 2020, According to IDC

Despite being affected by display panel shortages, gaming notebooks grew a record 26.9% in 2020 as consumers appreciated their versatility for both work and play.

M units	2020	2021	2025	CAGR
Desktop	16.7	17.5	15.7	-1.2%
Notebook	24.0	27.9	33.7	7.0%
Monitor	14.3	19.7	23.5	10.5%
Total	55.0	65.1	72.9	5.8%

Source: IDC, April 2021

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12% CAGR of Smart Home Devices Shipments during 2020~2025 as Consumers Embrace Home Automation and Ambient Computing

• 1 In 4 Americans Purchased Smart Home Tech For The First Time In 2020

By SafeWise, March 2021

 Despite of some challenges in 2020 such as high unemployment, an uneven economic recovery, and lockdown measures, sales of smart home devices have remained fairly resilient during the global Covid-19 pandemic.

• Worldwide shipments of smart home devices reached 801.5 million units in 2020, an increase of 4.5% over 2019

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Source: IDC, March 2021

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