GEM Services Inc. — Investor Presentation 2021

Nov 24, 2021

TWSE ：2460 2021 Investor Conference

1

Contents

==> picture [180 x 46] intentionally omitted <==

Disclaimer

I. Business Overview - Production Base, Product Classification and Proportion II. Industry Breakthrough III. Product Development IV. Consolidated Financial Information

V. Key Messages

2

Disclaimer

==> picture [180 x 46] intentionally omitted <==

 This report and simultaneously released information are the Company’s internal and external data, and the Company’s vision is towards the future up to now. If there is any change to these views in the future, the Company is not liable for timely updating the information or sending reminder.

 The Company has not released financial forecast. Any descriptions related to the Company’s financial and business status, or Q&A details in this report may be differentiated from the actual results in the future. Such us market demand change, ex-factory price, fluctuation of raw material price, industry competition, world economy, fluctuation of exchange rate, upstream / downstream supply chain, and other risk factors that are out of the Company’s control.

3

Production Base

==> picture [180 x 46] intentionally omitted <==

==> picture [401 x 382] intentionally omitted <==

==> picture [11 x 11] intentionally omitted <==

==> picture [11 x 11] intentionally omitted <==

==> picture [11 x 11] intentionally omitted <==

==> picture [11 x 10] intentionally omitted <==

GEM Terminal IND. Co., Ltd.

Address: Luzhu District, Kaohsiung City Land area: 17,331.45 m[2] Plant area: 11,674.63 m[2] Suzhou GEM Opto-electronics Terminal Co., Ltd. Address: Xiangcheng District, Suzhou City, Jiangsu Province Land area: 81,364 m2 Plant area: 43,855.21 m2 Dongguan GEM Electronic & Metal Co., Ltd. Address: Humen Township, Dongguan City, Guangdong Province Land area: 42,270.20 m2 Plant area: 24,352.24 m2 Vietnam GEM Electronic and Metal Co., Ltd. Address: Nam Tan Uyen, Binh Duong Land area: 24,700 m[2] Plant area: 33,247.90 m[2]

4

Product Category

==> picture [180 x 46] intentionally omitted <==

==> picture [113 x 85] intentionally omitted <==

==> picture [113 x 85] intentionally omitted <==

==> picture [103 x 85] intentionally omitted <==

==> picture [114 x 85] intentionally omitted <==

==> picture [113 x 85] intentionally omitted <==

==> picture [114 x 86] intentionally omitted <==

==> picture [234 x 100] intentionally omitted <==

==> picture [213 x 100] intentionally omitted <==

==> picture [207 x 100] intentionally omitted <==

第5頁

Product Category

==> picture [180 x 46] intentionally omitted <==

==> picture [250 x 323] intentionally omitted <==

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

1.16%
0.00%
0.44% 10.54%
7.37%
0.40%
80.09%
----- End of picture text -----

Automotive Connector 7.37%

Home Appliance Terminals 80.09% Electronics & Communication Terminals 0.40%

Electrical Terminals 0.44%

Lead-Free Brass Products 10.54% Others 1.16%

■ Multi-gauge Strip Precision Materials 0%

Jan to Oct 2021 Operating Revenue : 128 Million USD

6

Industr Breakthrou h y g

==> picture [180 x 46] intentionally omitted <==

 The Dual Control of Energy Policy in China

 In order to comply with dual control of energy policy in China, the production scheduling will face a huge challenge. Moreover, the rising cost of electricity will significantly increase the production cost accordingly.

==> picture [259 x 211] intentionally omitted <==

• Countermeasures :

 Suzhou GEM Opto-electronics Terminal will install solar power panels to increase green energy supply and reduce the impact of power restriction.

 Since the cost of electricity for GEM’s production sites in China increased from 40% to 50% comparing with GEM's production site in Vietnam, GEM will expand and adjust the proportion of production . in Vietnam accordingly

7

Industr Breakthrou h y g

==> picture [180 x 46] intentionally omitted <==

 The Impact of Pandemic

• In order to control the spread of the epidemic, the Vietnamese government requires companies to follow the “3 on-site” production policy. Since Vietnam GEM had applied the pandemic preventive measures in advance and was capable of compiling with the “3 onsite” policy in time, the production lines were continued to produce. Compared with companies that fail to respond in time, the “3 onsite” policy had limited influence on Vietnam GEM.

• The Vietnamese government prioritizes vaccinations against COVID19 for companies that meet the “3 on-site” policy. Therefore, all the employees of Vietnam GEM are already fully vaccinated.

• Since the COVID-19 epidemic in Vietnam has become severe, Vietnam GEM has increased production capacity and reserve inventory in advance. Thus Vietnam GEM can support the main products for customer orders and shipments normally.

8

Industr Breakthrou h y g

==> picture [180 x 46] intentionally omitted <==

 The Impact of Pandemic

 With coronavirus outbreak, in addition to the shortages of ships, containers, and manpower, major ports continue to show congestion and slow unloading, resulting in a substantial increase in freight rates. Moreover, a global shortage of chips, causing the global supply chain to disrupt supply and demand imbalances, which leads a harmful impact to the economy. Overall external factors indirectly cause the decline of third-quarter revenue of GEM.

 The electrical wire harness market is dominated by imported terminals. Due to the pandemic and transportation issues, the supply interruption has accelerated the demand for localization. GEM seized this opportunity to replace foreign imported components, such as wire harness connectors, electrical terminals, etc., to increase sales of high-margin products.

9

Product Develo ment p

==> picture [180 x 46] intentionally omitted <==

• Multi-gauge Strip Process Technology Application

 The multi-gauge strip market has long been monopolized by European and Japanese companies. Nevertheless, due to the lengthened import delivery period, manufacturers starting to search for alternative demand. GEM Terminal has seized this opportunity and has now obtained orders from many customers such as Tyco Electronics Technology (SIP) Co., Ltd. , Xiamen Hongfa Signal Electronics, I-Chiun Precision Industry, Bright Toward Industrial, etc.

10

Product Develo ment p

==> picture [180 x 46] intentionally omitted <==

 Multi-gauge Strip Process Technology Application

• Power Lead-Frame

• Terminals for New Energy Vehicles

• Automotive Terminals

• Connector Terminals

(Press-fit Terminals and Electrical Terminals)

==> picture [206 x 169] intentionally omitted <==

==> picture [188 x 163] intentionally omitted <==

==> picture [216 x 157] intentionally omitted <==

==> picture [206 x 157] intentionally omitted <==

11

Product Develo ment p

==> picture [180 x 46] intentionally omitted <==

• RoHS 2.0 Exemption

• Regarding to EU exemption for brass material with lead :

• content less than 1000 ppm

 : Exemption expire +84.49% Due to GEM’s exclusive copper smelting technique and professional turning technology, this significantly increases the chances for customers to switch and use lead-free products.  : Exemption extend Vietnam GEM is currently applying for the qualification to purchase brass scarp in Vietnam, and with the rising electricity cost in China will result in greatly reducing the cost of production for Vietnam GEM.

12

Product Develo ment p

==> picture [180 x 46] intentionally omitted <==

 Wire Harness Terminals

 Benefiting from the extension of import lead time and accelerated localization demand, GEM Terminal seized the opportunity to enter the system maker market, such as: General Electric Company, Carrier Global Corporation, Stanley Black & Decker Inc. (Fortune 500 Companies), etc.

==> picture [297 x 199] intentionally omitted <==

==> picture [312 x 255] intentionally omitted <==

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

+21%
----- End of picture text -----

13

Product Develo ment p

==> picture [180 x 46] intentionally omitted <==

• Turning Process

• Formally signed the Procurement Agreement and Quality Assurance Agreement with Tyco Electronics Technology (SIP) Co., Ltd., to supply machined highvoltage connection terminals for new energy vehicles.

==> picture [394 x 187] intentionally omitted <==

==> picture [397 x 200] intentionally omitted <==

14

Consolidated Financial Information

==> picture [180 x 46] intentionally omitted <==

Year 2020 Item Operating Revenue, Net 3,454,386 Gross Profit 376,306 Consolidated Income (Loss) before Income Tax (55,819) Ordinary Shares 1,692,000 Earnings (Net Loss) Per (0.25) Gross Profit (%) 11%	Year 2020 Item Operating Revenue, Net 3,454,386 Gross Profit 376,306 Consolidated Income (Loss) before Income Tax (55,819) Ordinary Shares 1,692,000 Earnings (Net Loss) Per (0.25) Gross Profit (%) 11%	(In Thousands of NTD)	(In Thousands of NTD)	(In Thousands of NTD)
Year	2020	Jan to Sep 2021	Jan to Sep 2020	Growth Rate
Item
Operating Revenue, Net	3,454,386	3,248,709	2,355,772	37.90%
Gross Profit	376,306	688,111	227,001	203.13%
Consolidated Income (Loss) before Income Tax	(55,819)	349,325	(72,615)	581.06%
Ordinary Shares	1,692,000	1,692,000	1,692,000	0.00%
Earnings (Net Loss) Per	(0.25)	1.28	(0.34)	476.47%
Gross Profit (%)	11%	21%	10%	11%

15

Consolidated Financial Information

==> picture [180 x 46] intentionally omitted <==

Operating Revenue, Net and Gross Profit (%) Trend Chart

==> picture [652 x 353] intentionally omitted <==

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

Operating Revenue,Net
Gross Profit (%)
(In Thousands of NTD)
1,400,000 30%
24%
25%
1,200,000
20%
19%
20%
1,000,000 15% 15%
15%
800,000 10%
5%
600,000
0%
400,000
-5%
-10%
200,000
-10%
- -15%
Jan to Mar Apr to Jun Jul to Sep
Operating revenue,net (2020) 489,098 860,115 1,006,559
Operating revenue,net (2021) 932,863 1,267,006 1,048,840
Gross profit (%) (2020) -10% 15% 15%
Gross profit (%) (2021) 19% 24% 20%
----- End of picture text -----

16

Key Messages

==> picture [180 x 46] intentionally omitted <==

 GEM Terminal will focus on the needs of future trends and strengthen the promotion and development

1. Multi-gauge strips have been fully promoted and sold in the market, and will continue to develop new customers. Seized the opportunity of localization trend, break through the monopoly of foreign manufacturers, and achieve overall industrial upgrading.

2. Utilizing the electricity price advantage of copper smelting plant of Vietnam GEM to increase the market competitiveness of environmentally friendly lead-free brass and lead-containing products. Furthermore, with applying for qualification to purchase brass waste will gradually enhance the advantages of copper smelting plant of Vietnam GEM.

3. Continue to expand and promote wire harness terminal products.

4. Formally signed the Procurement Agreement and Quality Assurance Agreement with Tyco Electronics Technology (SIP) Co., Ltd to supply high-voltage connection terminals for new energy vehicles.

17

==> picture [180 x 46] intentionally omitted <==

Thank You

18