September, 2016

www.focaltech-electronics.com

Listed on TWSE

Ticker # 3545

2016 1H Revenue

NT$ 5.3 Billion

Market Cap. (August, 2016) Employee # (August, 2016) Dividend/ share

~NT$ 9 Billion

~800

$0.7316

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LCD Driver IC

Includes SOC, Source driver (SD) Both self and mutual capacitive Gate driver (GD), Feature driver controllers support 1.5”~15” (SD+TCON), Timing controller panels (TCON) FocalTech Fingerprint Solution Integrated Driver & Capacitive area type. Fast, reliable and secure Controller (IDC) Supports both α‐Si and LTPS TFT LCD panels Solutions for out‐cell, on‐cell Force Touch Solution and in‐cell applications

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@2016 FocalTech Systems Co., Ltd. All rights reserved 4
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Selected Applications Selected Customers
Tablet
Smartphones
E‐ Readers
Wearable Device
Automotive
Laptop
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@2016 FocalTech Systems Co., Ltd. All rights reserved
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Hero4: touch screen on the back
Model Name: Axon Watch
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Model Name: Smart Run

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Application: Smart Robot Model Name: XiaoYuZaiJia

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Model Name: P9 Lite

Huawei

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Model Name: LeMeng X3

Lenovo

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Model Name: Zenfone

ASUS

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Model Name: Honor 5C Model Name: Redmi Note3

Huawei

Xiaomi

Model Name: ZenPad370

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ASUS
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@2016 FocalTech Systems Co., Ltd. All rights reserved
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CXXX GXXX SXXX LXXX
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GXXX 3XXX MXXX

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@2016 FocalTech Systems Co., Ltd. All rights reserved
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GFF, Hybrid and Super In Cell Comparison
GFF Hybrid Super Incell
Cover Glass
Cover Glass
Cover Glass
TX Sensor &
Polarizer
PET Film Polarizer
OCA RX Sensor Color Filter
Glass
RX Sensor &
PET Film
Color Filter Glass
OCA
Polarizer
VCOM &
Color Filter Glass
VCOM & Tx Touch Sensor
Sensor
TFT
Glass
IDC IC
TFT Glass
TFT Glass
Polarizer
FPCB
Polarizer
Driver IC
Touch IC
Tx & Driver IC
FPCB Rx Touch IC
FPCB
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@2016 FocalTech Systems Co., Ltd. All rights reserved
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SIC+IDC in Short
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Thinner & Lighter

20% Thinner

Performance

Better Optical Performance 10% Brighter

Simpler Structure: Easier to Make& More Reliable

Cost & Reliability

More Integration, Shorter Supply Chain Competitive System Cost

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 Strong patent portfolio in Super In‐Cell with IDC

Cooperate with multiple LCD makers in TW, JP, CN & KR
Support HD, FHD ,WQHD, 4K
Support larger display size up to 10~13”
Support both LTPS & a‐si TFT LCD

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Company Revenue
NT$ MM
Revenue
4,000
3,500 3,202
2,948 2,960
3,000 2,900
2,429
2,500 2,309
2,000
1,500
1,000
500
0
15'Q1 15'Q2 15'Q3 15'4Q 16'Q1 16'Q2
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Financial Results
NT$ MM
Gross Profit Net Profit
580
600 552
536
504
432
376
200
200
66
63
29
‐
97
‐56
15'Q1 15'Q2 15'Q3 15'Q4 16'Q1 16'Q2
‐200
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Gross Margin
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Gross Margin

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% Gross Margin
21.00
19.6
18.7
18.2
18.00 17.2 17.4
15.5
15.00
12.00
15' 1Q 15' 2Q 15' 3Q 15' 4Q 16' 1Q 16' 2Q
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Amt: in NT$ M

3 months ended on	2016/6/30	2016/6/30	2016/3/31	2016/3/31	2015/6/30	2015/6/30	QoQ	YoY
Net Revenue	2,960.0	100.0	2,308.6	100.0	3,202.5	100.0	28%	‐8%
Cost of Rev.	2,379.9	80.4	1,876.7	81.3	2,650.8	82.8	27%	‐10%
Gross Profit	580.1	19.6	431.9	18.7	551.6	17.2	34%	5%
Op. Exp.	500.0	16.9	522.1	22.6	523.0	16.3	‐4%	‐4%
Income from Op.	80.1	2.7	(90.2)	‐ 3.9	28.6	0.9		180%
Non‐Op. Income & Exp.	(1.9)	‐ 0.1	(12.0)	‐ 0.5	27.4	0.9	‐84%
IBIT	78.2	2.6	(102.2)	‐ 4.4	56.0	1.7		40%
Income Tax Income (Exp.)	(12.2)	‐ 0.4	5.6	0.2	7.0	0.2
Net Income	66.0	2.2	(96.5)	‐ 4.2	63.0	2.0		5%
EPS	0.23		(0.33)		0.15			53%

Note1: EPS‐ ‐based on weighted average outstanding common shares.

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Amt: in NT$ M

6 months ended on	2016/6/30	2016/6/30	2015/6/30	2015/6/30	YoY
Net Revenue	5,268.6	100.0	5,631.6	100.0	‐ 6.4
Cost of Rev.	4,256.6	80.8	4,703.9	83.5	‐ 9.5
Gross Profit	1,012.0	19.2	927.7	16.5	9.1
Op. Exp.	1,022.1	19.4	1,044.9	18.6	‐ 2.2
Income from Op.	(10.1)	‐ 0.2	(117.2)	‐ 2.1	‐ 91.4
Non‐Op. Income & Exp.	(13.9)	‐ 0.3	122.8	2.2
IBIT	(24.0)	‐ 0.5	5.6	0.1
Income Tax Income (Exp.)	(6.6)	‐ 0.1	1.9	0.0
Net Income	(30.6)	‐ 0.6	7.5	0.1
EPS	(0.10)		0.02

Note1: 2015 EPS‐ ‐based on weighted average outstanding common shares.

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Amt: in NT$ M

As of	2016/6/30	2016/3/31	2015/6/30	QoQ	YoY
Total Assets	14,415	14,704	16,126	‐2%	‐11%
Cash Equivalent	6,219	7,328	7,623	‐15%	‐18%
AR	1,436	1,118	2,083	28%	‐31%
Inv.	2,737	2,355	2,470	16%	11%
Total Lia.	3,320	3,334	3,928	0%	‐15%
Short‐term Loans	323	245	62	32%	423%
AP	1,406	851	1,373	65%	2%
Convertible Bonds	34	961	949	‐96%	‐96%
Shareholder Eqt.	11,096	11,370	12,199	‐2%	‐9%
Net CF In (Out)	1,105	544	763	103%	45%
CF fm Operation	345	356	283	‐3%	22%

Net worth per share (NT$)	37.70	38.65	29.21
AR Days	52	53	69
Inv. Days	109	119	112

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Revenue in Q2 16’ was NT$ 2,960M, up 28% qoq and down 8% yoy. The yoy decline is due to the operational adjustment on the product mix. The qoq sequential increase indicates the worse quarter of 2016 is over .
Gross profit increased 34% qoq to NT$ 580M due to higher revenue and higher margin %. More significantly, this represents 5% growth in profit with a 8% less revenue on yoy basis. Gross margin in Q2 16’ was 19.6%, marking 6 quarters of consecutive improvement.
Net income before tax in Q2 was NT$ 78M, up 40% yoy, mainly attributed to more efficient operations.

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Q3 is typically a strong season for smartphones, we expect to see the same situation this year. Therefore, the Q3 business is expected to be better than Q2.
Gross margin will stay on an upward trend as product mix continues to improve. Favorable contribution mainly comes from growth in mid to high‐end product shipment.
On the product mix improvement, the increase in shipment of IDC product is an important contribution. Another important contribution comes from On‐cell touch solution. Both IDC and On‐cell products will continue to play a noticeable role for the entire 2H of 2016.

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The information in this document may contain predictive statements including, without limitation, statements regarding the future financial and operating results, future product portfolio, new technology, etc. There are a number of factors that could cause actual results and developments to differ materially from those expressed or implied in the predictive statements. Therefore, such information is provided for reference purpose only and constitutes neither an offer nor an acceptance. FocalTech may change the information at any time without notice.

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FocalTech Interim / Quarterly Report 2016

52342_rns_2016-09-05_a62bc172-acc3-44ce-baa5-170ada20662b.pdf

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Thinner & Lighter

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 Strong patent portfolio in Super In‐Cell with IDC

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Gross Margin

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Copyright ©2016 FocalTech Systems Co., Ltd. All Rights Reserved.

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FocalTech — Interim / Quarterly Report 2016

52342_rns_2016-09-05_a62bc172-acc3-44ce-baa5-170ada20662b.pdf

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Thinner & Lighter

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 Strong patent portfolio in Super In‐Cell with IDC

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Gross Margin

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Copyright ©2016 FocalTech Systems Co., Ltd. All Rights Reserved.

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