HannsTouch — Interim / Quarterly Report 2016

Nov 28, 2016

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HannsTouch Solution Incorporation

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Safe Harbor Notice
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We have made forward-looking statements in this presentation. Our forward-looking statements contain information regarding, among other things, our financial condition, future expansion plans and business strategies. We have based these forward-looking statements on our current expectations and projections about future events. Although we believe that these expectations and projections are reasonable, such forward-looking statements are inherently subject to risks, uncertainties and assumptions about us.

We undertake no obligation to publicly update or revise any forward-looking statements whether as a result of new information, future events or otherwise. In light of these risks, uncertainties and assumptions, the forward-looking events discussed in this conference might not occur and our actual results could differ materially from those anticipated in these forward-looking statements.

The information contained herein shall also not constitute an offer to sell or a solicitation of an offer to buy the company’s securities nor shall there be any sale of such securities in any state or country in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state or country.

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Agenda
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1 Financial Results 2 2 Update & Outlook 4 3 Q & A

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Statement of Comprehensive Income
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NT$ Million	Q3 2016	Q3 2016	Q3 2015	Q3 2015	YTD 2016	YTD 2016	YTD	2015
Sales	833	100%	1,023	100%	1,815	100%	3,154	100%
Gross profit (loss)	384	46%	238	23%	-375	-21%	526	17%
Operating income	330	40%	185	18%	-519	-29%	388	12%
Net income (loss)	199	24%	183	18%	-847	-47%	213	7%
EBITDA	595		575		356		1,392
EPS (NT$)	0.27		0.24		-1.15		0.29

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Statement of Balance Sheet
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NT$ Million	Sep.30, 2016	Sep.30, 2016	Sep.30, 2015	Sep.30, 2015
Cash and cash equivalents	659	5%	2,026	13%
Accounts receivable, net	330	2%	435	3%
Inventories	141	1%	223	1%
Property, plant and equipment	9,879	68%	11,021	68%
Total Assets	14,651	100%	16,207	100%
Short-term loans	3,498	24%	6,514	40%
Long-term loans	2,311	16%	699	4%
Toal Debt	7,693	53%	8,576	53%
Total Equity	6,958	47%	7,631	47%
Current Ratio (%)		39%	54%
Debt/Equity Ratio (%)		111%	112%

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Statement of Cash Flows
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NT$ Million	YTD 2016	YTD 2015
Income before income tax	-845	213
Depreciation & Amortization	1,097	1,053
Operating Cash Flow	721	1,320
Investing Cash Flow	-1,973	165
Financing Cash Flow	-345	-539
Cash and cash equivalents	659	2,026

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Revenue & GP (%) Trend
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(NT$ million)
Revenue GP(%)
1,200 60%
40%
21%
1,000
46% 20%
0%
800
-20%
-46%
600 -40%
1,005 -119% -60%
833
400
-80%
422
560
-100%
200
-120%
0 -140%
2015Q4 2016Q1 2016Q2 2016Q3
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Hannstouch Business
Update & Outlook
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• .

• The growth rate of mobile market stays below 2% in 2016 Samsung and Apple remain the leading brands, yet Chinese brands are rising

• The rising of Chinese brands benefits the sales of SDC and AMOLED; it also brings market potential to LTPS and AMOLED manufacturing

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Global Smartphone Market Share

Global Smartphone Shipments (million)

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• Chinese brands mainly feature AMOLED and apply differentiation strategies to attain market share

 In China, approximately 50M AMOLED display was on mobile screen in 2015, 85M in 2016, including flexible AMOLED

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 The boost to the sale of smartphones and mobile device relies on high resolution. LTPS and AMOLED lead display technology. Size Mix

Average Size

Resolution Mix (PPI)

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Upside potential

• Flexible display penetration

• Narrow Bezel

• ASP drop

Smartphone Backplane Technology

OLED Unit Demand Forecast (M)

Smartphone OLED Penetration

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900 835
CAGR 23% 1
800 Automotive 712 60
23
700 Smart WatchTablet (’16~’20) 593 54 18 1
600 Smartphone 0
48
466 13
500
365 42
400 12
751
300 262 33 9 639
161 18 7 531
200
4 - 3
100
154 [ 238 323 413 ]
-
2014 2015 2016F 2017F 2018F 2019F 2020F
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Source: IHS, AKT internal estimates

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 The percentage of AMOLED adoption on smartphones rises per year and AMOLED becomes the trend of display technology

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 The growth of AMOLED adoption on smartphones has been faster than expected. More than 20% is estimated in 2016  Flexible AMOLED takes 16% share of AMOLED market in 2016, and is forecasted to increase to more than 40% in 2018

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Thanks for Your Attention!

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