KUNG LONG — Interim / Quarterly Report 2018

Sep 27, 2018

==> picture [481 x 54] intentionally omitted <==

Performance and future outlook

Stock Code : 1537

==> picture [721 x 102] intentionally omitted <==

==> picture [721 x 100] intentionally omitted <==

==> picture [276 x 32] intentionally omitted <==

Contents

==> picture [348 x 270] intentionally omitted <==

Company introduction Industry overview Sale Profile Financials Performance of Vietnam plant Our strength and outlook

==> picture [75 x 27] intentionally omitted <==

2

KLB Copyright 2018

Kung Long Batteries

 Company introduction  Industry overview  Sales Profile  Financials  Vietnam Plant introduction  Our strength  Future outlook

Established date	Jan. 25, 1990
Listed date	Jan. 22, 2002 (TWSE：1537)
HQ address	No.6 Tzu-Li 3 Rd, Nantou city
Plant	Taiwan-Kung Long(1990)、Le Long(1995) Vietnam-Ben Luc(1996)、Duc Hoa(2007)
Capital	NTD 817,853,940
Main activity	Batteries for renewable energy and storage system, batteries for telecom and switch stations, UPS batteries、EV batteries、Starting batteries
Numbers of employees	About 4,049 people

==> picture [75 x 27] intentionally omitted <==

3

KLB Copyright 2018

Main products

• Company introduction

 Industry overview

• Sales Profile

• Financials

• Vietnam Plant

introduction

• Our strength

• Future outlook

==> picture [545 x 398] intentionally omitted <==

==> picture [75 x 27] intentionally omitted <==

4

KLB Copyright 2018

Main products

• Company UPS Automotive Motorcycle

• introduction

• Industry overview

• Sales Profile

• Financials

• Vietnam Plant introduction

• Our strength Electric Tools Electric Vehicle Telecom

• Future outlook

==> picture [84 x 72] intentionally omitted <==

==> picture [95 x 65] intentionally omitted <==

==> picture [72 x 86] intentionally omitted <==

==> picture [90 x 94] intentionally omitted <==

==> picture [65 x 107] intentionally omitted <==

==> picture [80 x 104] intentionally omitted <==

==> picture [75 x 27] intentionally omitted <==

5

KLB Copyright

Market outlook

• Company introduction

• Industry overview

• Sales Profile

• Financials

• Vietnam Plant introduction

• Our strength

• Future outlook

==> picture [510 x 239] intentionally omitted <==

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

600 5%
465 471 483 500
500
4%
400
3%
300
2%
3.52%
200 2.55%
1%
100
1.29%
0 0%
2017 年 2018 年 2019 年 2020 年
Market scope YoY(%)
----- End of picture text -----

Lead-acid Batteries Market Scope Forecast (Unit: Million USD$)
Sources-IEKofITRI ( Dec/2017)

In terms of current market size of lead-acid batteries, it is USD 46.5 billion globally in year 2017. With the development of automobiles, motorcycles, and energy storage applications in the future, it is expected that future’s market growth will be 1%~3%.In comparison with the market size of Nickel secondary batteries being USD 2.3 billion, and that of Lithium batteries being USD 25.7 billion, lead-acid batteries are still the electricity storage products with the biggest shares.

==> picture [75 x 27] intentionally omitted <==

6

KLB Copyright 2018

The strength of lead-acid batteries

Wide applications Lead-acid batteries can be used for starting,  Company High C/P ratio energy storage, telecom, introduction The high C/P ratio of transportationpurposes. lead-acid batteries has  Industry been standing for long overview time.  Sales Profile One Two  Financials  Vietnam Plant introduction  Our strength  Future outlook Three Four Safety Recyclable and reusable Compared with other batteries, Wasted lead-acid batteries can lead-acid batteries are more be recycled. They are also the stable and of higher performance. only batteryproduct whose raw materials can be reused.

==> picture [75 x 27] intentionally omitted <==

7

KLB Copyright 2018

2017 Sales Profile by application

==> picture [668 x 394] intentionally omitted <==

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

 Company
introduction Automotive
6%
 Industry 11% 3% 3% 4%
overview
11%
Other
 Sales Profile
 Financials Motorcycle
 Vietnam Plant
introduction
 Our strength 10%
 Future outlook
9%
Electric Vehicle UPS 70% 73%
PS Letters highlighted in red stand for the numbers of 2016
----- End of picture text -----

==> picture [75 x 27] intentionally omitted <==

8

KLB Copyright 2018

==> picture [708 x 487] intentionally omitted <==

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

2018 1H Sales Profile by application
 Company
4%
introduction Automotive
 Industry 12% 5%
Other
4% 4%
10%
overview
 Sales Profile
Motorcycle
 Financials
 Vietnam Plant
introduction
 Our strength
10%
 Future outlook
10%
UPS
Electric Vehicle
70% 71%
PS Letters highlighted in red stand for the numbers of 2017
----- End of picture text -----

==> picture [75 x 27] intentionally omitted <==

9

KLB Copyright 2018

2017 Sales Profile by geography

America 20% Others 2% Vietnam 20% Taiwan 6% Asia 28% Europe 24% 23% 21% 1% 19% 5% Currency: thousand NTD Area America Europe Asia Taiwan Vietnam Others 2017 1,587,412 1,874,993 2,175,850 437,418 1,555,729 141,429 % 20% 24% 28% 6% 20% 2% 2016 1,454,697 1,601,437 2,181,717 349,320 1,320,321 116,390 % 21% 23% 31% 5% 19% 1% 31% Company introduction Industry overview Sales Profile Financials Vietnam Plant introduction Our strength Future outlook PS Letters highlighted in redstand for the numbers of 2016	America 20% Others 2% Vietnam 20% Taiwan 6% Asia 28% Europe 24% 23% 21% 1% 19% 5% Currency: thousand NTD Area America Europe Asia Taiwan Vietnam Others 2017 1,587,412 1,874,993 2,175,850 437,418 1,555,729 141,429 % 20% 24% 28% 6% 20% 2% 2016 1,454,697 1,601,437 2,181,717 349,320 1,320,321 116,390 % 21% 23% 31% 5% 19% 1% 31% Company introduction Industry overview Sales Profile Financials Vietnam Plant introduction Our strength Future outlook PS Letters highlighted in redstand for the numbers of 2016	America 20% Others 2% Vietnam 20% Taiwan 6% Asia 28% Europe 24% 23% 21% 1% 19% 5% Currency: thousand NTD Area America Europe Asia Taiwan Vietnam Others 2017 1,587,412 1,874,993 2,175,850 437,418 1,555,729 141,429 % 20% 24% 28% 6% 20% 2% 2016 1,454,697 1,601,437 2,181,717 349,320 1,320,321 116,390 % 21% 23% 31% 5% 19% 1% 31% Company introduction Industry overview Sales Profile Financials Vietnam Plant introduction Our strength Future outlook PS Letters highlighted in redstand for the numbers of 2016	America 20% Others 2% Vietnam 20% Taiwan 6% Asia 28% Europe 24% 23% 21% 1% 19% 5% Currency: thousand NTD Area America Europe Asia Taiwan Vietnam Others 2017 1,587,412 1,874,993 2,175,850 437,418 1,555,729 141,429 % 20% 24% 28% 6% 20% 2% 2016 1,454,697 1,601,437 2,181,717 349,320 1,320,321 116,390 % 21% 23% 31% 5% 19% 1% 31% Company introduction Industry overview Sales Profile Financials Vietnam Plant introduction Our strength Future outlook PS Letters highlighted in redstand for the numbers of 2016	America 20% Others 2% Vietnam 20% Taiwan 6% Asia 28% Europe 24% 23% 21% 1% 19% 5% Currency: thousand NTD Area America Europe Asia Taiwan Vietnam Others 2017 1,587,412 1,874,993 2,175,850 437,418 1,555,729 141,429 % 20% 24% 28% 6% 20% 2% 2016 1,454,697 1,601,437 2,181,717 349,320 1,320,321 116,390 % 21% 23% 31% 5% 19% 1% 31% Company introduction Industry overview Sales Profile Financials Vietnam Plant introduction Our strength Future outlook PS Letters highlighted in redstand for the numbers of 2016	America 20% Others 2% Vietnam 20% Taiwan 6% Asia 28% Europe 24% 23% 21% 1% 19% 5% Currency: thousand NTD Area America Europe Asia Taiwan Vietnam Others 2017 1,587,412 1,874,993 2,175,850 437,418 1,555,729 141,429 % 20% 24% 28% 6% 20% 2% 2016 1,454,697 1,601,437 2,181,717 349,320 1,320,321 116,390 % 21% 23% 31% 5% 19% 1% 31% Company introduction Industry overview Sales Profile Financials Vietnam Plant introduction Our strength Future outlook PS Letters highlighted in redstand for the numbers of 2016	America 20% Others 2% Vietnam 20% Taiwan 6% Asia 28% Europe 24% 23% 21% 1% 19% 5% Currency: thousand NTD Area America Europe Asia Taiwan Vietnam Others 2017 1,587,412 1,874,993 2,175,850 437,418 1,555,729 141,429 % 20% 24% 28% 6% 20% 2% 2016 1,454,697 1,601,437 2,181,717 349,320 1,320,321 116,390 % 21% 23% 31% 5% 19% 1% 31% Company introduction Industry overview Sales Profile Financials Vietnam Plant introduction Our strength Future outlook PS Letters highlighted in redstand for the numbers of 2016	America 20% Others 2% Vietnam 20% Taiwan 6% Asia 28% Europe 24% 23% 21% 1% 19% 5% Currency: thousand NTD Area America Europe Asia Taiwan Vietnam Others 2017 1,587,412 1,874,993 2,175,850 437,418 1,555,729 141,429 % 20% 24% 28% 6% 20% 2% 2016 1,454,697 1,601,437 2,181,717 349,320 1,320,321 116,390 % 21% 23% 31% 5% 19% 1% 31% Company introduction Industry overview Sales Profile Financials Vietnam Plant introduction Our strength Future outlook PS Letters highlighted in redstand for the numbers of 2016
	Area	America	Europe	Asia	Taiwan	Vietnam	Others
	2017	1,587,412	1,874,993	2,175,850	437,418	1,555,729	141,429
	%	20%	24%	28%	6%	20%	2%
	2016	1,454,697	1,601,437	2,181,717	349,320	1,320,321	116,390
	%	21%	23%	31%	5%	19%	1%

==> picture [75 x 27] intentionally omitted <==

10

KLB Copyright 2018

2018 1H Sales Profile by geography

==> picture [146 x 371] intentionally omitted <==

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

 Company
introduction
 Industry
overview
 Sales Profile
 Financials
 Vietnam Plant
introduction
 Our strength
 Future outlook
----- End of picture text -----

018 1H Sales Profile by geography	018 1H Sales Profile by geography	018 1H Sales Profile by geography	018 1H Sales Profile by geography	018 1H Sales Profile by geography	018 1H Sales Profile by geography	018 1H Sales Profile by geography
America 20% Other 2% Vietnam 21% Taiwan 6% Asia 28% Europe 23% 2% 18% 21% 25% 28% 6% Currency: thousand NTD PS Letters highlighted in redstand for the numbers of 2017
Area	America	Europe	Asia	Taiwan	Vietnam	Others
2018 1H	840,924	973,791	1,180,801	242,784	854,203	75,241
%	20%	23%	28%	6%	21%	2%
2017 1H	782,722	929,630	1,032,240	219,186	674,710	62,596
%	21%	25%	28%	6%	18%	2%

==> picture [75 x 27] intentionally omitted <==

11

KLB Copyright 2018

Sales by brand-consolidated

• Percentage of own brand and OEM brand in 2018 1H

==> picture [697 x 371] intentionally omitted <==

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

 Company
introduction 51%
 Industry
overview
49%
 Sales Profile
 Financials
own brand OEM
 Vietnam Plant
introduction
 Our strength
 Future outlook
worldwide Vietnam
----- End of picture text -----

==> picture [75 x 27] intentionally omitted <==

12

KLB Copyright 2018

Financials -consolidated

Consolidated income statement

• Company introduction

• Industry overview

• Sales Profile  Financials

• Vietnam Plant introduction

• Our strength  Future outlook

Financials -consolidated Consolidated income statement	Financials -consolidated Consolidated income statement	Financials -consolidated Consolidated income statement	Financials -consolidated Consolidated income statement	Financials -consolidated Consolidated income statement	Financials -consolidated Consolidated income statement	Financials -consolidated Consolidated income statement	Financials -consolidated Consolidated income statement
Currency: million NTD
category	2012	2013	2014	2015	2016	2017	2018 1H
Operating revenue	5,901	5,695	6,766	6,944	7,024	7,773	4,168
Gross profit	1,271	1,109	1,299	1,430	1,732	1,755	844
Gross Margin	22%	19%	19%	21%	25%	22%	20%
Operating profit	837	710	841	968	1,229	1,261	587
Pre-tax Profit	847	753	898	1,052	1,251	1,198	650
After-tax profit	629	579	676	802	948	906	499
Profit attributable to former owner of business combination under common control	616	573	660	769	923	901	499
EPS(NTD)	7.55	7.02	8.09	9.42	11.31	11.04 Avera 9.07	6.11 ge
Average LEAD price(USD/ton)	2,062	2,142	2,096	1,786	1,871	2,318	2,441

==> picture [75 x 27] intentionally omitted <==

13

KLB Copyright 2018

Consolidated Sales

Company introduction Industry overview Sales Profile Financials	2,000 4,000 6,000 8,000 10,000	4,830 5,901 15% 22%	4,830 5,901 15% 22%	4,830 5,901 15% 22%	4,830 5,901 15% 22%	5,692 19%	6,766 19%	6,766 19%	6,944 7,024 7,773 21% 25% 22%	6,944 7,024 7,773 21% 25% 22%	6,944 7,024 7,773 21% 25% 22%	6,944 7,024 7,773 21% 25% 22%	6,944 7,024 7,773 21% 25% 22%	6,944 7,024 7,773 21% 25% 22%		10% 20% 30%
Vietnam Plant	0															0%
introduction Our strength Future outlook		2011 2012 2013 2014 2015 2016 2017 Turnover Gross profit rate
	Consolidated Turnover		4,830	5,901		5,695		6,766	6,944	7,024			7,773
	LME average price(USD/MT)		2,402	2,062		2,142		2,096	1,786	1,871			2,318
	Gross Profit Margin		15%	22%		19%		19%	21%	25%			22%
	After-tax EPS		3.90	7.55		7.02		8.09	9.42	11.31			11.04

==> picture [75 x 27] intentionally omitted <==

14

KLB Copyright 2018

Dividend policy (元)

Company introduction Industry overview Sales Profile Financials Vietnam Plant introduction Our strength Future outlook	0 2 4 6 8 10	78.30% 80.30% 79.61% 79.58% 86.05% 70% 75% 80% 85% 90% 2013 2014 2015 2016 2017 Cash dividends Dividend yield	78.30% 80.30% 79.61% 79.58% 86.05% 70% 75% 80% 85% 90% 2013 2014 2015 2016 2017 Cash dividends Dividend yield	78.30% 80.30% 79.61% 79.58% 86.05% 70% 75% 80% 85% 90% 2013 2014 2015 2016 2017 Cash dividends Dividend yield	78.30% 80.30% 79.61% 79.58% 86.05% 70% 75% 80% 85% 90% 2013 2014 2015 2016 2017 Cash dividends Dividend yield	78.30% 80.30% 79.61% 79.58% 86.05% 70% 75% 80% 85% 90% 2013 2014 2015 2016 2017 Cash dividends Dividend yield	78.30% 80.30% 79.61% 79.58% 86.05% 70% 75% 80% 85% 90% 2013 2014 2015 2016 2017 Cash dividends Dividend yield	78.30% 80.30% 79.61% 79.58% 86.05% 70% 75% 80% 85% 90% 2013 2014 2015 2016 2017 Cash dividends Dividend yield	78.30% 80.30% 79.61% 79.58% 86.05% 70% 75% 80% 85% 90% 2013 2014 2015 2016 2017 Cash dividends Dividend yield
					2013	2014	2015	2016	2017
	EPS				7.02	8.09	9.42	11.31	11.04
	Dividend distribution			Cash dvidends	5.50	6.50	7.50	9.00	9.50
				Stock dividends	-	-	-	-	-
	Dividend yield				78.3%	80.3%	79.61%	79.58%	86.05%

==> picture [75 x 27] intentionally omitted <==

15

KLB Copyright 2018

==> picture [73 x 67] intentionally omitted <==

Comparison chart of LME, SMM, and EPS

==> picture [703 x 388] intentionally omitted <==

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

(USD/ton) (元)
3,500 4.00
 Company
introduction 3.50
3,000
 Industry
3.00
overview 2,500
 Sales Profile 2.50
 Financials 2,000
2.00
 Vietnam Plant
1,500
introduction
1.50
 Our strength
1,000
1.00
 Future outlook
500
0.50
0 0.00
14' 14' 14' 14' 15' 15' 15' 15' 16' 16' 16' 16' 17' 17' 17' 17' 18' 18'
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2
LME 2,105 2,095 2,183 1,999 1,806 1,947 1,712 1,681 1,742 1,719 1,872 2,150 2,279 2,165 2,334 2,493 2,523 2,441
SMM 2,280 2,231 2,300 2,188 2,003 2,173 2,112 2,068 2,078 1,991 2,065 2,605 2,680 2,409 2,868 2,929 3,012 3,175
EPS 1.81 1.70 2.24 2.34 1.89 1.94 3.08 2.51 2.29 2.96 2.76 3.30 2.20 3.27 2.67 2.90 2.44 3.67
----- End of picture text -----

==> picture [75 x 27] intentionally omitted <==

16

KLB Copyright 2018

==> picture [73 x 67] intentionally omitted <==

==> picture [146 x 371] intentionally omitted <==

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

 Company
introduction
 Industry
overview
 Sales Profile
 Financials
 Vietnam Plant
introduction
 Our strength
 Future outlook
----- End of picture text -----

Sales Quantity by KL group

0 300 600 900 1,200 1,500 1,800 2,100 2,400	Monthly shipping q’ty(thousand pcs) Monthly turnover(million NT dollars)	Monthly shipping q’ty(thousand pcs) Monthly turnover(million NT dollars)	Monthly shipping q’ty(thousand pcs) Monthly turnover(million NT dollars)	Monthly shipping q’ty(thousand pcs) Monthly turnover(million NT dollars)	Monthly shipping q’ty(thousand pcs) Monthly turnover(million NT dollars)	Monthly shipping q’ty(thousand pcs) Monthly turnover(million NT dollars)	Monthly shipping q’ty(thousand pcs) Monthly turnover(million NT dollars)
	2013 2014 2015 2016 2017 2018 1H
Monthly shipping q’ty		1,835	2,095	2,057	2,026	2,119	2,189
Growth rate of shipping q’ty		-3%	14%	-2%	-2%	5%	3%
Monthly turnover		474	564	579	585	648	694
Growth rate of turnover		-4%	19%	3%	1%	11%	7%

==> picture [75 x 27] intentionally omitted <==

17

KLB Copyright 2018

==> picture [721 x 517] intentionally omitted <==

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

Location
 Company
introduction
 Industry
overview
Lao People's
 Sales Profile Ho Chi Minh Sale
Democratic Republic
 Financials Office
 Vietnam Plant
introduction
 Our strength
 Future outlook Cambodia
Duc Hoa
Ben Luc
Factory(2007)
Factory(1996)
18
----- End of picture text -----

==> picture [73 x 67] intentionally omitted <==

• Company introduction

• Industry

overview

• Sales Profile

• Financials

• Vietnam Plant

introduction

• Our strength

• Future outlook

Location

==> picture [551 x 403] intentionally omitted <==

==> picture [75 x 27] intentionally omitted <==

19

==> picture [73 x 67] intentionally omitted <==

Turnover of Le Long Vietnam

==> picture [705 x 406] intentionally omitted <==

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

5,000
3,870 4,458
50,000
 Company 3,364 2,996 2,998 4,000
40,000
46,438
introduction
3,000
30,000
 Industry 40,367 35,970
35,957 26,748
overview 20,000 2,000
 Sales Profile
1,000
10,000
 Financials
0 0
 Vietnam Plant
2014 2015 2016 2017 2018年1H
introduction
Domestic sales
 Our strength monthly avg.
 Future outlook currency ： thousand USD
Category 2014 2015 2016 2017 2018 1H
Domestic sales 40,367 35,957 36,918 46,438 26,748
Domestic sales 3,364 2,996 3,077 3,870 4,458
monthly avg.
----- End of picture text -----

==> picture [75 x 27] intentionally omitted <==

20

KLB Copyright 2018

==> picture [73 x 67] intentionally omitted <==

Overview of Vietnam plant

Ben Luc plant

• Company introduction

• Industry

overview

• Sales Profile

• Financials

• Vietnam Plant

introduction

• Our strength

• Future outlook

==> picture [540 x 332] intentionally omitted <==

36,500 square meters

==> picture [75 x 27] intentionally omitted <==

21

KLB Copyright 2018

==> picture [73 x 67] intentionally omitted <==

Turnover of Le Long Vietnam

Ben Luc plant

• Company introduction

• Industry

overview

• Sales Profile

• Financials

• Vietnam Plant

introduction

• Our strength

• Future outlook

==> picture [546 x 320] intentionally omitted <==

36,500 square meters

==> picture [75 x 27] intentionally omitted <==

22

KLB Copyright 2018

Overview of Vietnam plant Duc Hoa plant  Company introduction

• Industry overview

• Sales Profile

• Financials

• Vietnam Plant

introduction

• Our strength

• Future outlook

350,000 square meters(200,000 square meters are developed)

==> picture [75 x 27] intentionally omitted <==

23

KLB Copyright 2018

==> picture [73 x 67] intentionally omitted <==

• Company introduction

• Industry

overview

• Sales Profile

• Financials

• Vietnam Plant

introduction

• Our strength

• Future outlook

Turnover of Le Long Vietnam

Duc Hoa plant

==> picture [541 x 336] intentionally omitted <==

350,000 square meters(200,000 square meters are developed)

==> picture [75 x 27] intentionally omitted <==

24

KLB Copyright 2018

==> picture [708 x 481] intentionally omitted <==

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

Core value
 Company Quality
introduction
 Industry
overview
 Sales Profile
 Financials Cost
Innovation
 Vietnam Plant
introduction
 Our strength
 Future outlook
Service Delivery
----- End of picture text -----

==> picture [75 x 27] intentionally omitted <==

25

KLB Copyright 2018

==> picture [73 x 67] intentionally omitted <==

• Company introduction

• Industry overview

Excellent quality

Strength

The production of lead-acid batteries comprises the know-how of electrochemistry and complex system of manufacturing & management. It is not easy to produce quality batteries stably for the long term.

• Sales Profile

• Financials

• Vietnam Plant introduction

• Our strength

High Entry Barrier

With more and more people realizing the importance of environmental protection, China has imposed lots of restrictions on the manufacturing of lead-acid batteries including the production scale, facilities, and environmental protection…etc. This standard is also considered by many other countries, and therefore there’s no new comer for many years. And besides China, there’re few manufacturers in other Asian.

• Future outlook

Qualified Standard

It takes long time to test individual battery performance and service life. The most important is that the incoming inspection can not determine the service life of batteries. Thus, quality customers will set up high qualification procedure and field audit for new comers. We are able to develop the products meeting customer needs.

==> picture [75 x 27] intentionally omitted <==

26

KLB Copyright 2018

==> picture [73 x 67] intentionally omitted <==

• Company introduction

• Industry overview

Localization

Strength

All our supervisors are Vietnamese, and Taiwanese management people can communicate with them in Vietnamese language without problem. By the way, we enter Vietnam market early and take high shares in M/C AM market. Our batteries have been recognized as high quality. Our brand images is also well established. All of these are very helpful for our profits. Also, the investment environment in Vietnam is good and government seldom interferes.

• Sales Profile

• Financials

• Vietnam Plant introduction

• Our strength

R&D ability

We’re devoted to the upgrade and diversity of lead-acid batteries. Through the enhancement of battery performance, we not only make more profits but also develop lower-end products to help customers take more market shares. Our program has been extended from current small sized SLA to medium/large sized ones. We also develop star stop batteries to expend client bases.

• Future outlook

Quality client

Our customers include leading companies in each industries, thus the in each areas are to distribute our importers willing products. Moreover, as the sales territories and customers are properly diversified, we can avoid the huge impacts resulted by single industry and economic factors.

==> picture [75 x 27] intentionally omitted <==

27

KLB Copyright 2018

==> picture [73 x 67] intentionally omitted <==

• Company introduction

• Industry overview

• Sales Profile

• Financials

• Vietnam Plant introduction

• Our strength

• Future outlook

==> picture [110 x 388] intentionally omitted <==

Strength

Most of our competitors has factory in China. But the issuance of “manufacturing permission of SLA batteries “ in 2011 has limited the development of SLA industry and eliminated lagging production. We’re the professional UPS battery manufacturer with biggest capacity in Southeast Asia, and it can help us to take more orders than our competitors.

Main production bases of small/ medium sized SLA batteries are located in China and Vietnam. When Chinese labor costs keep rising, RMB is under pressure for appreciation, and SLA industry is limited, Chinese battery manufacturers are forced to move to outside. However it’s difficult to find a suitable location. While we’re producing in Vietnam and we can expand our capacities to maintain our advantages

China publishes the notice for imposing consuming tax on batteries and – pasting starting from 1//1/2016, 4% consuming tax will be imposed on lead-acid battery manufacturing, OEM, and import. This bring significant burden to Chinese lead-acid battery factories.

==> picture [75 x 27] intentionally omitted <==

28

KLB Copyright 2018

==> picture [73 x 67] intentionally omitted <==

• Company introduction

• Industry overview

• Sales Profile

• Financials

• Vietnam Plant introduction

• Our strength

• Future outlook

Future outlook

==> picture [42 x 134] intentionally omitted <==

==> picture [105 x 379] intentionally omitted <==

Introducing automatic equipment to increase production efficiency, decrease material waste and maintenance cost, to lower the dependence on manpower

Continuous introduction of automatic equipment

==> picture [58 x 151] intentionally omitted <==

Develop large sized SLA batteries for industrial and telecom applications to segment current mass products and obtain niche market.

The promotion of new products and market

Continuous Continuously develop light weight development models which meet market needs to on lightweight models increase gross margin.

==> picture [75 x 27] intentionally omitted <==

KLB Copyright 2018

==> picture [708 x 188] intentionally omitted <==

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

Future outlook
Sustainable development on
environment protection policy
Risk
 Company perspectiv * Right response to the
e fluctuation of lead price and
introduction
cost
 Industry
----- End of picture text -----*

• Industry overview

• Actively satisfy customer needs and

• Sales develop new market to increase market

• perspectiv shares e • Adjust sales price according to lead cost,

• Manufacturin and set a fair way for transactions. g perspective • Establishing product position and doing the market segmentation.

• Sales Profile

• Financials

• Vietnam Plant introduction

• Our strength

• Future outlook

• Continuously develop batteries suitable for renewable energy.

• Continuously develop large sized SLA batteries for telecom applications.

• Continuously proceed the design and

• modification for automatic production.

* Continuous research and development

Technical * Possess critical perspective technology

* Implement more processing control systems

• Develop long life time and advanced start stop batteries.

==> picture [75 x 27] intentionally omitted <==

30

KLB Copyright 2018

==> picture [654 x 341] intentionally omitted <==

==> picture [160 x 53] intentionally omitted <==

Vincent Liu

Financial Senior Manager
Email: vincent@mail.klb.com.tw
TEL:+886-49-2254777