CHICONY — Interim / Quarterly Report 2020

Aug 27, 2020

==> picture [175 x 540] intentionally omitted <==

CHICONY ELECTRONICS

2Q20 Financial Results August 10, 2020

==> picture [146 x 540] intentionally omitted <==

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

2

==> picture [146 x 540] intentionally omitted <==

Chicony’s Global Manufacturing Network

==> picture [237 x 370] intentionally omitted <==

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

Taipei HQ
Wujiang
Dongguan
----- End of picture text -----

==> picture [71 x 14] intentionally omitted <==

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

Chongqing
----- End of picture text -----

Thailand

• New factory under construction, ready for mass production in 4Q20

• • Leased facility started mass production in 4Q19

3

==> picture [146 x 540] intentionally omitted <==

Positioned as Number 1 Global Market Leader

Chicony Continued to Achieve Leading Market Share

==> picture [557 x 362] intentionally omitted <==

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

37%
NB Keyboard
32%
DT Keyboard
Number #1
Market
42%
Share in NB Camera Module
2019
47%
NB Adaptor
30%
IP Cam
----- End of picture text -----

4

==> picture [146 x 540] intentionally omitted <==

Consistent Dividend Pay-Out Policy to Reward Investors

Chicony	2014	2015	2016	2017	2018	2019
EPS	6.22	5.79	5.24	5.9	5.22	8.45
Cash Dividend	4.65	4.3	4.25	4.45	3.80	5.90
Stock Dividend	0.05	0.05	0.05	0.05	0	0
Dividend Payout %	76%	75%	82%	76%	73%	70%
Cash Yield Rate %	5.43	5.79	5.25	6.1%	4.8%	7.1

Source: CMoney

5

==> picture [146 x 540] intentionally omitted <==

2Q20 Revenue Jumped 38.6% QoQ / 11.3% YoY

==> picture [511 x 339] intentionally omitted <==

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

NT$M 2018~2020 Quarterly Revenue
2018 2019 2020
30,000
25,096
25,000
19,177
20,000
17,574 18,111
15,000
10,000
5,000
0
1Q 2Q 3Q 4Q
----- End of picture text -----

6

==> picture [146 x 540] intentionally omitted <==

2Q20 Operating Profit Increased 36%YoY;

Million NT$	2Q 2020 1Q 2020 QoQ %2Q 2019 YoY %
Net Sales	25,096 100.0 18,110 100.0 38.6 22,551 100.0 11.3
COGS	(20,062) (79.9)(15,296) (84.5) (18,736) (83.1)
Gross Profit	5,034 20.1 2,814 15.5 78.9 3,815 16.9 32.0
Operating Expense	(2,729) (10.9)(1,528)1 (8.4) (2,123) (9.4)
Operating Profit	2,305 9.2 1,286 7.1 79.3 1,692 7.5 36.3
Other Income/Expense	9513 3.8 (1,163)2 (6.4) (42) (0.2)
Profit Before Tax	3,256 13.0 123 0.7 2,555.11,650 7.3 97.4
Tax	(478) (1.9) (44) (0.2) (222) (1.0)
Net Income	2,389 9.5 40 0.2 5,851.81,286 5.7 85.7
After Tax EPS	3.40 0.06 5,566.71.86 82.8

Note 1: Lower operating expense was due to less commission, bonus and travel expenses in 1Q20. Note 2: Other Income/Expense was mainly due to mark-to-market revaluation loss of Newmax, a long-term strategic investment, amounting to NT$960M.

Note 3: Mark-to-market revaluation gain of Newmax in 2Q20 amounted to NT$166M.

7

==> picture [146 x 540] intentionally omitted <==

1H20 Operating Margin Reached 8.3%, Leading to 70% YoY Growth for Operating Profit

to 70% YoY	Growth for Operating Profit
Million NT$	1H 2020 1H 2019 YoY %
Net Sales	43,206 100.0 41,729 100.0 3.5
COGS	(35,358) (81.8) (35,018) (83.9)
Gross Profit	7,848 18.2 6,711 16.1 16.9
Operating Expense	(4,257) (9.9) (4,598) (11.0)
Operating Profit	3,591 8.3 2,113 5.1 70.0
Other Income/Expense	(212) (0.5) 1,867 4.5
Profit Before Tax	3,379 7.8 3,979 9.5 -15.1
Tax	(521) (1.2) (681) (1.6)
Net Income	2,429 5.6 2,933 7.0 -17.2
After Tax EPS	3.47 4.26 -18.5

8

==> picture [718 x 540] intentionally omitted <==

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

Substantial Improvements for Both Gross
Margin and Operating Margin in 2Q20 and 1H20
Gross Margin 20-year Operating Margin 13-year
high high
2Q20 20.1% 2Q20 9.2%
2Q19 16.9% 2Q19 7.5%
15% 16% 17% 18% 19% 20% 21% 0% 2% 4% 6% 8% 10%
11-year 13-year
Gross Margin Operating Margin
high high
1H20 18.2% 1H20 8.3%
1H19 16.1% 1H19 5.1%
15% 16% 16% 17% 17% 18% 18% 19% 0% 2% 4% 6% 8% 10%
9
----- End of picture text -----