GS — Call Transcript 2021

Nov 11, 2021

==> picture [228 x 110] intentionally omitted <==

2021 Third Quarter Earnings Conference Nov. 11, 2021 https://www.gshank.info/tw

==> picture [27 x 19] intentionally omitted <==

G-SHANK

Disclaimer

• This presentation is based on the information obtained from G-Shank Enterprise, included Business Forecasts, Development and Financial status. Please note that while the company has used its best efforts to make sure the accuracy and comprehensiveness of this presentation, all information shall be subject to the public financial information submitted to government authorities by the company. G-Shank is not responsible for the respective update changes or adjustments that might occur in the near future.

• This document may contain “forward-looking statements” and any nonhistorical information, including the company’s operating strategies, operating plans and future prospects, are forward-looking statements based on our assumptions about future operations and uncertain factors such as government regulations, economic changes, market trend... etc., so actual results may differ.

• This document shall not be considered as an inducement to buy or sell securities or other financial products.

Agenda

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

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

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

About G-SHANK

Operational Performance Current Status and Prospect

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

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

==> picture [103 x 104] intentionally omitted <==

About G-SHANK

Operational Performance Current Status and Prospect

G-SHANK

==> picture [27 x 19] intentionally omitted <==

Who We Are?

(TWSE: 2476)

Chairman: Yu-Huang Lin

==> picture [32 x 32] intentionally omitted <==

Capital: $1.85B (NTD)

CEO: Ying-Shou Lin

Est. 1975

==> picture [92 x 67] intentionally omitted <==

(Worldwide) 2,698 Employees 745 (TW)

Group Revenue Percentage

Parts

90%

Die 5%

Merchandise 3% (Transaction within the group)

Toolings 2%

==> picture [140 x 139] intentionally omitted <==

THE LARGEST COMPANY DEDICATED TO PRECISION STAMPINGS IN ASIA

G-SHANK

==> picture [27 x 19] intentionally omitted <==

Where We Are?

==> picture [19 x 5] intentionally omitted <==

==> picture [664 x 375] intentionally omitted <==

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

Tianjin
Suzhou
Qingdao
Wuhan
Shanghai
G-Long (Dongguan)
Shenzhen Japan G-SHANK AMERICA (TX)
(Tokyo)
G-Bao (Shenzhen)
Xiamen Mexico
World
Thailand Headquarters
(Taoyuan, Taiwan)
& Taiwan Bade Branch
Malaysia
Indonesia
Global
1 Headquarters
Service
14 Branch/ Factory
2 Office
17
----- End of picture text -----

==> picture [27 x 19] intentionally omitted <==

G-SHANK

How Did We Start?

Vertical Integration

Stamping

==> picture [446 x 387] intentionally omitted <==

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

Stamping Industrial
&Others 3C
1973 Founded 15% 75%
1980 Est. Design Center
1984 Est. 6S Policy
1989 Est. Malaysia Branch
1994 Est. G-Shank Mexico & USA
1996 ISO 9001 Certified
3C 10%
90% 1996 Est. Shanghai Branch Automotive
1998 Listed in Over-The-Counter
(The First Company in Metal
Stamping Industry in TW)
1998 Est. Thailand & Taiwan Bade Branches
1973 2000 2010
Industrial & Others
10% Global Growth
Automotive 10%
2000 Est. Shanghai II Branch
2001 Listed in TWSE (2476)
2001 Est. Dongguan, Xiamen,
Suzhou, Qingdao Branches
2002 Est. Indonesia Branch
80% 2003 Est. Tianjin Branch
3C 2005 ISO14001& ISO/TS16949Certified
----- End of picture text -----

==> picture [31 x 20] intentionally omitted <==

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

Others
10%
----- End of picture text -----

2009 Electroplating Lines Est. 2010 Est. Insert-Molding Dept. 2012 Est. Japan Branch 2012 Est. Wuhan Branch

2012 Record High Die PO (209 sets/mo) 2012 Stamping, Electroplating, InsertMolding, Automatic Assembly Vertical Integration

2018 Est. Automotive Market Div.

==> picture [135 x 129] intentionally omitted <==

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

3C 51%
2021
1~9
17%
32% Automotive
Industrial
&Others
----- End of picture text -----

2000 Est. Shanghai II Branch 2001 Listed in TWSE (2476) 2001 Est. Dongguan, Xiamen, Suzhou, Qingdao Branches 2002 Est. Indonesia Branch 2003 Est. Tianjin Branch 2005 ISO14001& ISO/TS16949Certified 2006 Est. Shenzhen I Branch 2007 Est. Shenzhen II Branch

==> picture [27 x 19] intentionally omitted <==

G-SHANK

One Stop Solution

Insertmolding x34

Die Design

Stamping

==> picture [56 x 60] intentionally omitted <==

x110 sets (Monthly Capacity)

==> picture [58 x 45] intentionally omitted <==

x722 (10 - 400T)

(35 -110T)

• Servo Feeds

• AOI Machine Inspection

• 3D/CAD Design

• Design Database System

• AOI Machine Inspection

• Vertical, Horizontal Insert-molding Machine

Automated Assembly

Machining

Electroplating

==> picture [56 x 67] intentionally omitted <==

==> picture [67 x 56] intentionally omitted <==

==> picture [45 x 45] intentionally omitted <==

x531

4 Machines

8 Lines(Hoop)

• Vertical CNC Machine

• Sawing Machine

• Jig Grinder

• E.D.M

• R J 45 Connector

• Profile Grinder

• Drilling E.D.M

Au (Gold) Sn (Tin)

• D-SUB Connector

• Wire E.D.M • Precision E.D.M

==> picture [51 x 51] intentionally omitted <==

• Automatic Laser Welding Machine

• Grinder • Horizontal Profile

• • Lathe Grinder

• Automatic Silver Brazing Assembly

• Automotive Safety Device Assembly

• Milling Machine

Ni (Nickel)

==> picture [27 x 19] intentionally omitted <==

G-SHANK

What Do We Do?

17% Automotive

• Regulators

• Transmission Coolers

• GPS/ USB/ Charger Connectors

• Airbag & Seat Belt Connectors

• Air Conditioning

• Fuses

• Button Adaptors

• TPMS

• Headlight Parts

• Anti-theft Systems

• Automotive Camera Module

32% Industrial &Others

• Sensors

• Relays

• No Fuse Breakers/ Switches

• PLC

• Timers

• Blood Sugar Testers

• Scalpels

• Semiconductor Lead Frames

• Furniture Parts

• Electronic Cigarettes

2019:16% 2020: 17% 2019:27% 2020: 31%

11%

2019: 09% Communications • Mobile Phones 2020:10% • ADSL • Internet Related 2019:15% 16% PC/NB 2020: 17% • I/O • Type C • USB • HDMI • FPC/FFC • Memory Card • Board-to-board 2019:33% 2020: 25% 24% Consumer Electronics

==> picture [117 x 238] intentionally omitted <==

• Appliances • Digital Cameras

• Gaming Parts

• Switches

• Video Recorders

• Jewelry industry

*2021/1~9 Group Data

==> picture [27 x 19] intentionally omitted <==

G-SHANK

Total Sales by Region (based on customer’s region)

==> picture [684 x 345] intentionally omitted <==

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

46% 49% 48%
42%
JP
EURO 42%
28%
U.S 18 19 20 21/1~9
9%
28%
TW
27%
26% 26% 14%
13%
11%
9%
8%
18 19 20 21/1~9
OTHS 14%
10%
7% 8% 8%
18 19 20 21/1~9
18 19 20 21/1~9
7% 7% 7%
6%
18 19 20 21/1~9
----- End of picture text -----

*2021/1~9 Group Data

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

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

==> picture [103 x 104] intentionally omitted <==

About G-SHANK

Operational Performance Current Status and Prospect

Group Revenue

Net Profits after Tax

(Attributable to owners of parent)

==> picture [8 x 9] intentionally omitted <==

Other Regions China Taiwan

==> picture [675 x 358] intentionally omitted <==

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

5.14 5.13 4.99
4.89% ▼ 0.31% ▼ 2.57% 4.78
4.77
1.20 1.20 ▼ 4.3% 0.52
1.28
1.25 1.36
11.9%
▼0.3%
7.0%
▼2.5%
3.09 3.05
0.38
2.87
2.89
2.80
0.33
0.29 0.29
4.0% ▼1.0% ▼6.0% 0.7%
▼19.6% ▼23.6% 14.1% ▼13.3%
0.86 0.87 0.84
▼1.0% 0.63 0.62
2.2% ▼3.7%
▼24.2%
17 18 19 20 21/1~9 17 18 19 20 21/1~9
NT$ billion %：YoY
----- End of picture text -----

NTD$ Thousand

Composite Income Sheets

Items	2021/1~9	2020/1~9	Growth%
Sales revenue	4,770,310	3,443,930	38.5%
Operating costs	(3,352,318)	(2,509,657)	33.6%
Gross Profit	1,417,992	934,273	51.8%
Gross Profit%	29.7%	27.1%	+2.6ppts
Operating Expense	(647,770)	(591,693)	9.5%
Net operating income	771,186	343,707	124.4%
Gains from Operations %	16.2%	10.0%	+6.2ppts
Non-operating income and expenses	55,862	(24,409)	328.9%
Revaluation Gains (Losses) on Financial Assets	(16,566)	(49,657)	66.6%
Foreign exchange gain (loss)	(16,853)	(45,992)	63.4%
Income before Tax	827,048	319,298	159.0%
Tax expense (income)	(223,128)	(107,201)	108.1%
Income tax %	27.0%	33.6%	-6.6ppts
Profit (loss)	603,920	212,097	184.7%
Profit (loss), attributable to owners of parent	516,478	164,029	214.9%
Consolidated Net Income Attributable to Parent Company %	10.8%	4.8%	+6.0ppts
Basic earnings per share	2.79	0.89	213.5%

NTD$ Thousand

Balance Sheets

Items	2021/9/30 2020/9/30
	Amount % Amount %
Cash & Marketable Securities	4,220,733 48.0% 4,306,660 53.9%
Notes Receivable and Net Accounts receivable	1,530,581 17.4% 1,041,587 13.0%
Current Inventories	1,032,719 11.7% 711,497 8.9%
Long-term Investments	364,356 4.1% 358,075 4.5%
Property, Plant and Equipment	1,196,360 13.6% 1,205,000 15.1%
Right-of-use Asset	134,761 1.5% 157,819 2.0%
Total Assets	8,795,247 100.0% 7,988,256 100.0%
Total Liabilities	3,251,481 37.0% 2,898,165 36.3%
Total Equity Attributable to Owners of Parent	4,963,212 56.4% 4,514,185 56.5%
Non-controlling Interests	580,554 6.6% 575,906 7.2%
Total Equity	5,543,766 63.0% 5,090,091 63.7%
Book Value Per Share	26.4 24.4

Financial Analysis

Items	2021/9/30	2020/9/30
Debts Ratio	37.0%	36.3%
Current Ratio	280.3%	285.9%
Quick Ratio	237.3%	251.8%
Average collection days	79	88
Average inventory turnover days	72	79

15

Cash Flow
		NTD$ Thousand
Items	2021Q3	2020Q3
Cash and cash equivalents at beginning of period	3,134,587	3,033,334
Net cash flows from operating activities	132,493	295,005
Capital expenditures	(126,016)	(140,097)
Net cash flows from (used in) investing activities	33,131	143,036
Net cash flows from (used in) financing activities	(248,914)	58,896
Effect of exchange rate changes on cash and cash equivalents	(68,244)	(75,573)
Cash and cash equivalents at end of period	2,857,037	3,314,601

16

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

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

==> picture [103 x 104] intentionally omitted <==

About G-SHANK

Operational Performance Current Status and Prospect

==> picture [27 x 19] intentionally omitted <==

G-SHANK

G-SHANK’s Core Competence Supply Chain & Future Strategies

Supply Chain

Raw material supply

Raw Material

Copper, copper alloy, steel, stainless steel, aluminum, LCP, and etc.

G-Shank’s core business is manufacturing and being flexible to allocate resources to integrate different processes based on the client’s needs.

G-SHANK core processes

Components manufacture

Progressive stamping, staged stamping, insert/injection molding, machining, reel-to-reel electroplating, laser-engraving, and etc.

Other capabilities: die-casting, metal injection molding, surface treatment (Anodizing/painting/barrel plating/bracket plating/sand-blasting, & etc.)

Assembly

Extended core processes

Extended core processes G-Shank Processes Automated assembly, semi-automated assembly, manual assembly Integration

Final Products

==> picture [344 x 85] intentionally omitted <==

Jewelry industry

==> picture [65 x 63] intentionally omitted <==

==> picture [109 x 63] intentionally omitted <==

18

==> picture [27 x 19] intentionally omitted <==

G-SHANK

One Stop Solution & Electroplating Process Optimization

==> picture [690 x 272] intentionally omitted <==

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

G-SHANK
Insert- Automated
Raw Material Stamping Electroplating Finished
molding Assembly
Products
Automated
Plastic Electroplating Insert-molding
Stamping Die Assembly
Materials Line Machine
Machine
----- End of picture text -----

Taiwan Brushing Electroplating

==> picture [137 x 80] intentionally omitted <==

Minimum precision: 3mm±0.5mm

Japan Brushing Electroplating

==> picture [136 x 79] intentionally omitted <==

Minimum precision: 0.3mm±0.1ｍｍ

19

Thank You

For any financial information of G-SHANK, welcome to G-SHANK investors overview, https://www.gshank.info/tw/overview or MOPS (code: 2476) https://mops.twse.com.tw/mops/web/index