EMC — Investor Presentation 2023

Aug 28, 2023

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Elite Material Co., Ltd. Global leader of high end eco-friendly laminates

Presentation August, 2023

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Disclaimer

This presentation may contain “forward-looking statements” which may include projections on future results of operations, financial condition, and business prospects based on our own information and other sources.

The actual results of operations, financial condition, and business prospects may differ from those explicitly or implicitly indicated in those forward-looking statements for a variety of reasons, including but not limited to market demand, price fluctuations, competition, supply chain issues, global economic conditions, exchange rate fluctuation and other risks and factors beyond EMC’s controls. The forward-looking statements in this presentation, if any, only reflect the current view of EMC as of the date of its release. EMC undertakes no obligation to update those forward-looking statements for events or circumstances that occur subsequently.

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Agenda 2Q23 Financial result P.4 Capacity update P.7 Industry overview P.9 Executive summary P.13 Q&A P.18

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Financial Highlights

• Net revenue was NT$9.18 billion, representing an 24.8% increase from NT$7.36 billion in 1Q23 and an 8.0% decrease from NT$9.98 billion in 2Q22.

• Gross margin was 27.5%, 6.1 percentage points higher than 1Q23 and 4.5 percentage point higher than 2Q22.

• Operating margin was 17.6%, up 7.1 percentage points from 1Q23 and up 3.0 percentage point from 2Q22.

• Net income attributable to shareholders of the parent company was

• NT$1.0 billion, up 108.5% from 1Q23 and down 7.7% from 2Q22. Net profit margin was 10.9% and diluted EPS was NT$3.0

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2Q23 P&L summary

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Unit: NT$ million

Unit: NT$ million
Revenue Gross profit Operating profit Income before tax Tax expenses Net income EPS (NT$) - basic Gross margin (%) Operating margin (%) Net margin (%)	2Q23 9,180 2,525 1,619 1,588 (588) 1,000 3.00 27.5% 17.6% 10.9%	1Q23 7,359 1,572 769 729 (249) 480 1.44 21.4% 10.5% 6.5%	QoQ 24.8% 60.6% 110.5% 117.8% 135.8% 108.5% 108.3%	2Q22 9,983 2,297 1,454 1,448 (364) 1,084 3.25 23.0% 14.6% 10.9%	YoY
					-8.0% 9.9% 11.4% 9.7% 61.5% -7.7% -7.7%

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2Q23 Abstracted Balance Sheet

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	Unit:NT$ million Cash & Equivalent A/R+N/R Inv PPE Total Assets	2Q23 Amount % 13,951 29.1% 11,657 24.3% 3,980 8.3% 15,385 32.1% 47,962 100.0%	1Q23 2Q22 Amount % Amount % 14,414 31.2% 9,596 21.5% 9,814 21.2% 13,246 29.7% 3,728 8.1% 6,196 13.9% 15,189 32.9% 12,711 28.5% 46,235 100.0% 44,653 100.0% 8,192 17.7% 3,942 8.8% 5,986 12.9% 8,869 19.9% 4,168 9.0% 3,674 8.2% 19,799 42.8% 19,421 43.5% 46,235 100.0% 44,653 100.0%
	Short term Debt A/P Long term Debt	8,103 16.9% 7,180 15.0% 4,292 8.9%
	Shareholder's Equity	20,293 42.3%
	Total Debt and Equity	47,962 100.0%

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Manufacturing Locations and Monthly Capacity

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EMC (HS)
Huangshi
CCL: 900k sheets
PP: 4.8kk meters
Manpower: 650+
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EMC (KS) Kunshan CCL: 1.35kk sheets PP: 3.3kk meters Manpower: 1,400+ +300K SHT/M in 2Q, 2023 +450K SHT/M in 4Q,2023 EMC (TW) Taoyuan CCL: 400k sheets PP: 1.4kk meters Manpower: 900+

EMC (TW) Hsinchu CCL: 150k sheets PP: 1.1kk meters Mass Lam: 800k ft2 Metal Core: 40k pnls Manpower: 150+ EMC (ZS) Zhongshan CCL: 950k sheets PP: 2.1kk meters Manpower: 900+

EMC’s SEA investment situated in Penang Science Park North, Malaysia, phase one capacity of 450K sheets schedules to mass

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CCL Production in the USA

EMC is the only CCL manufacturer, among all Taiwanese & Chinese makers, having production capacity in the US.

To mitigate geopolitical risks, EMC is committed to better serve its customers by providing stabilized high-end materials in the local market with timely services.

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9433 Hyssop Dr, Rancho Cucamonga, CA 91730, United States

Arlon (aka Arlon EMD), a CA-based company at Rancho Cucamonga, makes specialty laminates and prepregs for PCBs used in aerospace, defense and semiconductor industries.

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World #1 HF material supplier in 2022

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Trend of 5G infrastructure development: HF, HDI, High Speed, High Frequency

Halogen Free HDI High Speed AAU AiP MIMO[RRU] Phone-5G High Frequency BBU mmWave Phone-4G ADAS Phone-3G 77GHz AI Server Switch-800G 26.56 GHz Server- PCIe5 Infotainment NB- USB4.0 Switch-400G 16GHz 14GHz E-Mobility

NB- USB3.0

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Switch-100G ECU Server- PCIe4 12.89GHz 8GHz Server- PCIe3 Switch-40G 4GHz 5GHz

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High-end CCL(HDI & High-speed/ frequency)

• High-end CCL market grows at 16% CAGR (2022-2025)

• Overall CCL market grows at 5% CAGR (2022-2025)

• • EMC expects to outgrow high end CCL market

Overall CCL Market

High-end CCL Market

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Source: Goldman Sachs Global Investment Research, Oct 2022

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EMC Momentum in High speed CCL – from Nothing to 16% Global Share in 4 years

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Source: Goldman Sachs Global Investment Research, Oct 2022

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Executive Summary

• Leader in HDI technology, with a global mobile phone market share of ~70%, and a 5G mobile phone market share of ~ 90%.

• The global market share of switch products has risen from ~10% of 100G to ~30% for mainstream 400G products.

• AI server, with a market share of ~60%.

• Our first Southeast Asia plant in Malaysia

• Our partnership with Insulectro across North America

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Steadily Sales Growth

NTD ： Billion

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40.0
2002 ： 1.9Bn → 2022 ： 38.7 Bn
35.0
2002 ~ 2022, CAGR=16.2%
30.0
25.0
20.0
15.0
10.0
5.0
0.0
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022
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Revenue

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Sustainable Operation Performance

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History of Cash dividend and Payout ratio

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The Corporate Social Responsibility Report

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Q & A

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