Hiroca — Investor Presentation 2024

Nov 26, 2024

農華控股有限公司

Hiroca Holdings Ltd.
Ticker : 1338 T.T

President Steven Huang
CFO S.C.Huang

http://www.hirosawa.com.cn/
Nov. 28, 2024

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CONTENTS

• Company Profile
• Financial Results
• China Auto Market Trend

• Future Development

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Company Profile

• Basic Information

• Hiroca is a tier 2 supplier owning the most diverse automobile plastic interior decoration technologies in the world. We have prepared to become a tier-1 supplier in the near future.

• Hiroca provides one-stop vertical and horizontal manufacturing services to its clients through a strategy emphasizing stable quality, competitive cost and prompt delivery (QCD).

• Hiroca has already set up subsidiaries in several regions in China and a factory in Mexico to serve the emerging American markets, to form a strategic partnership with the big three Japanese and the big three U.S. automakers, and to develop a platform for local production and global shipping.

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Company Profile-Plant Sites

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Honda-Ye Series

• S7

• P7

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AITO Series

M9

双准零重力座椅

最大调节角度

75° 43°

旋风四向可调 座椅直径

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• Seal

BYD—Ocean Series

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BYD—Dynasty Series

• Han

• Tang

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• Super 3

BYD—Surinoel Series

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The Core Technology of Company

6 core technologies integration:

We are capable of design and development of optics, heat dissipation, structure, electronic hardware and software, LED packaging, etc. We can effectively control the core technologies of automotive interior touch vibration, atmosphere lamp, reading lamp and headlight, and make product differentiation and customization when design.

The decoration part with the design of intelligent, lighting and beauty

Design of fish scale-like lamp with flow-light effect

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HIROSAWA

Surface Technology

Existing surface treatment

1. Vacuum heat transfer
2. Paint
3. Chorming
4. Hot Stamping
5. Water Transfer printing

EPF new surface treatment

1. Metal Film
2. Multi color film
3. Wood/Aluminum

Injection in Mold

Technical advantages

1. Surface treatment technology
2. Appearance/material/quality/environmental protection
3. Customized design capabilities
4. Provide cost reduction solutions

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HIROSAWA

Patent Technology

Patent:22 · Invention:5 · New Model:17

Application of interior lighting and exterior signal lights

• Innovative of lighting lamps
• Map Lamp
• MINI LED illumination emblem

• IMD式汽車摄攀製造工藝,201910837289.5
• 汽車摄攀構造,201921478333.

• 汽車摄攀門製造方法,202010730399.

• 灣體式透光鏡件,202020369023.0

• 內灣體式膠膜汽車裝鏡件,202120491231.2
• 內灣體式膠膜汽車裝鏡件的製造方法,202110252083.3

• 汽車裝鏡件製造方法 美國專利16/902,250

• 多功能薄型Mini LED汽車車理製造方法及

• 復光控制方法,202110252104.1
• 多功能薄型Mini LED汽車車理,202120491232.7
• 種透光忠革鉤件,202020369117.8
• 毛班裝鈞件的生產製造系統,202020737991.2
• 汽車裝鈞件及製造方法

• 美國專利17/117,117 臺灣專利109134299

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HIROSAWA

Product Series

Inner:

Door + IP+ Console

• Hand in hand with customers towards the smart cockpit
• Reflect the value of passenger light and beauty

Inner:

Touch + Map Lamp + Scuff plate

• Interior decoration with EPF new material technology
• Innovative style is more environmentally friendly

Light:

Penetrating lights/luminous signs/ Tail lights /Return reflectors

• Stepping into the new product line of smart touch
• Meet the new design needs of customers in the future

Outer:

Grill/Side trim/ Wheel Cover/B Piller

• Exterior decoration combined with luminous plastic and electrical integration
• Continuous development of various lighting products

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Company Profile-Sales Breakdown

Units:%

Aiming for to increase high margin products

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Company Profile- Main Customer

2024Q1-Q3 Customer Breakdown

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Financial Results

Unit:NTD1,000

	2020		2021		2022		2023		2024 Jan.-Sept.
	Amount	%	Amount	%	Amount	%	Amount	%	Amount	%
Sales	6,166,478	100.00%	7,314,879	100.00%	7,344,840	100.00%	5,761,288	100.00%	3,673,966	100.00%
Cost of Goods Sold	4,772,317	77.39%	5,775,024	78.95%	5,849,352	79.64%	4,486,785	77.88%	2,831,300	77.88%
Gross Profit	1,394,161	22.61%	1,539,855	21.05%	1,495,488	20.36%	1,274,503	22.12%	842,666	22.12%
Operating Expenses	1,138,123	18.46%	1,286,355	17.59%	1,285,503	17.50%	1,230,091	21.35%	909,870	21.35%
Operating Income	256,038	4.15%	253,500	3.47%	209,985	2.86%	44,412	0.77%	-67,204	0.77%
Non-Operating Income	233,488	3.79%	253,309	3.45%	191,842	2.61%	118,356	2.05%	244,987	2.05%
Non-Operating Expenses	71,934	1.17%	53,946	0.74%	192,466	2.62%	282,139	4.90%	146,429	4.90%
Pre-Tax Income	417,592	6.77%	451,863	6.18%	209,361	2.85%	-119,371	-2.07%	31,354	-2.07%
Income Tax Expenses	130,273	2.11%	101,174	1.38%	78,668	1.07%	50,953	0.88%	35,141	0.88%
Net Income Attributable to Parent Company	294,505	4.78%	339,066	4.64%	136,329	1.86%	-164,316	-2.85%	-45,861	-2.85%
EPS(adjusted)	3.51		4.04		1.63		-1.96		-0.55

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Financial Results- Quarterly Revenue & Gross Margin

Unit:NTD100million/%

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Financial Results- Key Financial Ratios

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Return on investment analysis	2020	2021	2022	2023	2024 Q1-Q3
Gross margin ratio	22.61%	21.05%	20.36%	22.12%	22.94%
Operating income ratio	4.15%	3.47%	2.86%	0.77%	-1.83%
Pre-tax income ratio	6.77%	6.18%	2.85%	-2.07%	0.85%
Net income ratio	4.78%	4.79%	1.86%	-2.85%	-1.25%
Liquidity analysis	Current ratio	169%	185%	215%	179%
Quick ratio	135%	145%	174%	152%
Debt ratio	37%	44%	39%	43%
Interest coverage ratio	12.43	10.22	3.62	0.2
Operating performance analysis	Average collection turnover (times)	2.88	3.00	2.95	2.63
Average inventory turnover (times)	4.68	4.52	4.55	4.30
Average paybles turnover (times)	3.82	4.16	4.86	4.78
Cash Converation Cycle (days)	109	115	129	148

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China Auto Market Trend

• In the first 10 months of 2024, 24.624 million new vehicles were sold, an annual increase of 2.7%. Country-wise, in the first nine months of 2024, Japanese, French, American and German passenger cars all decreased, while independent brands and Korean cars increased, and the market share is still dominated by independent brands, Japanese and German brands.
• China's auto dealer inventory index was 50.5% in October 2024, down 8.1 percentage points from the same period last year, close to the 50% warning line, and the industry sentiment continues to improve.
• The China Association of Automobile Manufacturers (CAAM) said that with the supply chain of the automobile industry rapidly recovering, the industrial economy recovered in the third quarter of this year. Local old for new replacement policy on the market pulling effect is gradually apparent, scrapping renewal policy also continued to stabilize the force, pulling the car market growth
• According to the China Association of Passenger Vehicle Manufacturers (CAPM), the annual sales volume of new energy passenger vehicles in China is expected to reach 10.68 million units in 2024, representing a year-on-year growth of 38%. In the fourth quarter alone, sales are estimated to reach 3.55 million units, a 39% year-on-year increase. Despite the impact of the European Union's countervailing duty, exports of new energy passenger vehicles have maintained growth this year, with the penetration rate reaching 52.9% in October, which will set the momentum for the promotion of Kwong Wah Kwong's and U.S. products in the future.

China : Car sales for Jan.-October. 2024.

Classification	Volume (10,000)	YoY
Total vehicle	2462.4	2.7%
Passenger car	2117.0	4%
Sedan	901.4	-1.1%
SUV	1142.0	9.3%
MPV	79.5	-9.9%
Business	319	-3.4%

China : Passenger car sales for Jan.-Sep. 2024.

Car Maker	Volume (10,000)	Market share(%)	YoY
Local Brand	1190.87	63.8%	+19.4%
Japanese	216.64	11.6%	-19.6%
Germany	292.64	15.7%	-12.0%
French	7.47	0.4%	-35%
American	125.52	6.7%	-25.8%
Korean	31.27	1.7%	+9.5%

Source: CAA(China Association of Automobile Manufacturers)

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Growth Strategies

Future Deployment	Main item / content
Process automation	Commitment to process automation, rationalization and material autonomy and focus on production and marketing of high gross margin products to enhance future profitability of Hiroca.
New painting process	New automatic painting and printing lines will start production in Xitou Dongguan in 2025Q2
Auto Luminous electronic business	New auto luminous electronic production and assembly lines have been set up in Dongguan
Development of new materials and technologies	Improvement projects for coming years include introduction of ECO-Friendly technologies, development of new film materials, adoption of new work methods, penetration into the functional engineering plastic market, application of intelligent atmosphere lamp cockpit decoration and interior lighting and exterior signal lamp.
Dongguan facilities relocation plan and Expansion project in Mexico	Part of production facilities will be relocated to Xitou Dongguan in 2025Q2
Over 46,000 square meters of land was secured in Mexico in Aug. 2024

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THANK YOU

Q&A

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