Lida - Interim / Quarterly Report 2018

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Ticker
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4552
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- Leading player in the high end general purpose air compressor segment in China.

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Date of

Establishment

May 11, 2012

Chairman

Wu Chien-Neng (Representative of Yi Yuan Enterprises Ltd)

General Manager Chen Yi-Ping

Paid-in Capital

NT$1 billion

Business Scope

Engage in the research, development, manufacturing and marketing of self-branded air compressors through trade names mainly with "Luowei“.

Consolidated Revenue

NT$8.12 billion /EPS 9.24(2017) NT$6.01 billion /EPS 6.46(2018Q3)

Production Sites

Quanzhou City, Fujian Province - Lida (China) Machine Equipment Co., Ltd.
九江, Jiangxi Province - Lida (Jiangxi) Machine Equipment Co., Ltd.

No. of Employees

1,538 (as of Sep. 30, 2018)

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Lida (China)

Location Area Position

R&D, production Quanzhou and sales for City, Fujian 37,101m² overseas Province markets and coastal provinces

Lida (Jiangxi)

Jiujiang, Production and Jiangxi 58,529m² sales (inland Province provinces)

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Main Products	Main Products	Main Products	Main Products
Category	Revenue % (2018Q2)	Revenue % (2018Q3)	Attributes & Application
Piston- type	36.4%	35.5%	⚫Ease of use, high mobility, affordability. ⚫Wide range of users, from individuals to small- and medium- enterprises.
Screw- type	48.4%	48.6%	⚫Medium- to large-sized manufacturers, including but not limited to: industrial production, automobile, textile, packaging and petrochemicals. ⚫Higher operating efficiency, especially under continuous operation. ⚫Energy efficiency and ease of operation.
Scroll- type	12.8%	13.1%	⚫High quality compressed air. ⚫Particularly suitable in safety-conscious applications, such as medical, pharmaceutical, food and beverage, as well as precision industries ⚫Growing industry attention on scroll- type designs. Offers high operating efficiency and dependability, low noise levels, with reduced size and weight. 5

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Air Compressor
Positive
Dynamic
Displacement
Reciprocating Rotary Jet Turbine
Sliding Centrifu Axial
Piston Rolling Rotor Screw Scroll
Vane gal Flow
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Pressurized air, clean air
Petrochemical industry
Sandblasting
Air Tank
Pneumatic tools
Paint spray, electroplating,
injection molding
Power
Food & beverage
Air Compressor
processing
Application
Dehumidifier and
filter
7
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upstream midstream downstream
material industry R&D and manufacturing Terminal application
Industrial Manufacturing
Case Food
Cylinder Pharmaceutical
Compressors Head Textile
Crankcase Transport
原材料產業
Motor Chemical
Iron Plate Petrochemical
Iron Core Refrigeration
Rotor Gas Separation
Mining & Metallurgy
8
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Industrial Manufacturing

Pneumatic Power

Laser Cutting

CNC Machine Center

➢ Numerous air-driven tools, such as: pneumatic pick, riveter, tamping machine, lift, and pneumatic drill

➢ Automated equipment, such as dynamic movie theater seat, robot arm, laser, printing press, CNC machine center, machine tool and air valve

Robot Arms

Measuring Equipment Accessories

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Dynamic Movie Theater

Printing Equipment

PET Blowing

Pneumatic Tools

Paint Spraying

Equipment Application

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Food & Pharmaceutical & Textile

➢ Spraying, e.g. painting and rust removal
➢ PET bottle blowing
➢ Soda carbonation, automated packaging lines

Pneumatic Power

➢ Air-powered sewing machines
➢ Sandblasting of denims

Textile Equipment

Production line

Medical equipment

Food & Beverage processing

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Transport

Pneumatic Power

Chemical & Petrochemical

Pneumatic Power

Refrigeration & Gas Separation

Refrigeration & Gas 、 Separation Transmission

Mining & Metallurgy

Pneumatic Power 、 Transmission

➢ Automotive brakes, opening/close of bus doors, railway engineering equipment
➢ Synthesis and polymerization of chemical raw materials, such as synthetic nitrogen, methanol and urea
➢ Long distance transmission of natural gas
➢ Refrigerated air, Freon compressor
➢ Transmission of refrigerated air and/or separated air
➢ Drilling equipment, such as rock drill, pneumatic drill & hammer

➢ Transmission of combustion gases, cement, and provision of air in mines

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2016 年首三季2017

2015年度 2018Q3

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Others, 9.7%
Others,
8.8%
Food Processing, Industrial Industrial
Food Processing,
9.9%
Manufacturing, 9.9% Manufacturing,
34.8% 34.4%
Pharmaceutical, CAGR Pharmaceutical,
9.7% 9.6%
Electronics, 7.1%
Electronics, 7.3%
Auto
Package Package
Auto
Manufacturing,
printing, 4.0% Mining & printing, 4.0% Mining & Metallurgy,
4.9% Manufacturing,
Metallurgy, 9.3% 8.6%
4.8%
Textile&Apparel
Chemical & Petrochemical, Textile&Apparel,
, 6.4% Chemical & Petrochemical,
5.1% 6.4%
5.2%
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Source: Lida

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THE FUTURE TREND OF SCREW
COMPRESSORS IN CHINA
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➢ According to the Report of Prospect and Investment Strategy Planning, the western developed countries accounted for 80% of the market share in screw compressor sector. The market share in Japan rose from 27% in 1976 to 85% in 1985. Currently, the market share in China is still in low level and therefore there is huge space for replacement from piston compressors to screw compressors. Currently, the la

➢ The large market in China is 120P or above models. 60P or above models are in replacement stage while most of 75P or above models have completed the replacement process. Taking into the factors of upgrade in production capacity and energy conversation, the conversion from the normal screw compressors to high-end energy-saving screw compressors will continue.

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CAGR Special
compressors
Horse-power
Screw compressors
Scroll
Piston
compressors
Level of industrial automation
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-
FOCUS ON R&D AND HIGH
MARKET
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Vertical Integration Self-production of screw head

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-
Focus on high end market and increase gross profits market of products
Oil-Free
F F+ CAGR Oil-Free
Screw Type
Scroll Type Two Stage
Variable Variable Scroll Type (under
development)
15
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MODEL
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Sales of air
-
compressors
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Original large distribution channels

Matured distribution channels - Sales through 70 first-tier local distributors, extending to second-tier and third-tier local distributors throughout China.

Innovative service sales model

Assist distributors to develop integrated direct sales service method for sales of energy-saving products.

Export sales through importers

Through importers and large - exhibitions The sales orders mainly come from Asia and Europe.

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Main building of Beijing 2008 Olympic Games

Competitive	Competitive	Competitive	Advantages	Advantages	Advantages
	Brand		R&D		Channels		Focus
➢	China Famous	➢	Independently	➢	Mature and	➢	Focus on
	Trademark		developed scroll		stable		general-
➢	Over 20 years of		air compressor		distribution		purpose air
	continuous	➢	F-Variable		network		compressors.
	production		Frequency	➢	Network of 70	➢	Not easily
➢	High C/P Value。		compressor has		distributors in 25		affected by
			industry leading		provinces		single industrial
			efficiency				trend.
		➢	Self-production					17
			of screw head

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UPGRADE AND INTEGRATION
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➢ Aims to high-end product marketing scale in building long-term strategic foundation.

Developing Profitable Markets

Upgrading Technical Skills Improving Production 1.Still improving highCapacities end product mix. 1. Self-production of 2. Increasing high end screw head. 1. Strengthen products variety and CAGR relationship with 2. Starts in Industrydeveloping more distributions and differentiation university cooperative develop more creative 。research to develop especially on screw type sales models . more high-end products and R&D level. 2.Progress in building new factory to expand and integrate capacity.

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ENHANCE BRAND AWARENESS
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ComVac Asia (Nov 2018), Shanghai

WMF (Sep 2018), Shanghai

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2,500,000 3.00 Unit: NT’000
2,214,705
2,133,141 2,153,567
2.67 1,964,794 2.52 2.50 ◼ YoY-11.3%
2,000,000 2.31 1,887,308 ◼ QoQ-8.8%
2.10
2.00
1.84
1,500,000
◼ YoY-16.9%
1.50
◼ QoQ-9.9%
1,000,000
1.00
500,000 390,640 336,252 306,907 360,085 324,523 0.50 ◼ YoY-5.5%
◼ QoQ+20.2%
0 0.00
2017Q3 2017Q4 2018Q1 2018Q2 2018Q3
Revenue Operating Profits Net Profits EPS
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30.0%
25.0% 23.7% 23.9% 23.7% 23.2%
21.8%
20.0%
17.6%
16.3% 16.7% 16.5%
15.8%
15.0%
12.8%
12.1%
10.0%
10.8%
9.8% 9.7%
5.0%
0.0%
2017Q3 2017Q4 2018Q1 2018Q2 2018Q3
Gross Margin Operating Profits Margin Net Profits Margin
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100%
9.6%
11.8% 13.8% 12.3%
90% 18.2%
80%
70%
60%
50%
90.4% 89.2% 86.2% 87.7%
40% 81.8%
30%
20%
10%
0%
2017Q3 2017Q4 2018Q1 2018Q2 2018Q3
China Other Regions
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100%
2.0% 2.3% 2.4% 2.4% 2.8%
90% 12.0% 12.7% 12.9% 12.8% 13.1%
80%
70%
43.9%
60% 46.8% 47.3% 48.4% 48.6%
50%
40%
30%
20% 42.1%
38.2% 37.4% 36.4% 35.5%
10%
0%
2017Q3 2017Q4 2018Q1 2018Q2 2018Q3
Piston Screw Scroll Others
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29.0%
27.0% 26.9%
26.7%
27.0% 26.2%
26.1%
25.8%
25.5%
26.5%
26.4%
25.0% 26.0%
23.0%
20.8%
20.7%
21.0% 20.2%
20.0%
19.3%
19.0%
17.0%
15.0%
2017Q3 2017Q4 2018Q1 2018Q2 2018Q3
Piston Screw Scroll
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5years Steel Prices in China

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Unit: NTD’000

Items	Q3 2018	Q2 2018 Q3 2017 YoY(%) QoQ(%)
	金額％	金額％金額％ TWD RMB TWD RMB
Revenue	1,964,794 100.0%	2,153,567 100.0% 2,214,705 100.0% -11.3% -10.7% -8.8% -5.4%
Gross profits	456,766 23.2%	510,689 23.7% 525,908 23.7% -13.1% -12.6% -10.6% -7.2%
Operating profits	324,523 16.5%	360,085 16.7% 390,640 17.6% -16.9% -16.4% -9.9% -6.6%
Income before tax	363,793 18.5%	334,339 15.5% 398,596 18.0% -8.7% -8.5% 8.8% 12.4%
Income tax	(111,766) -5.7%	(124,731) -5.8% (131,861) -6.0% -15.2% -14.8% -10.4% -7.2%
Net profits	252,027 12.8%	209,608 9.7% 266,735 12.0% -5.5% -5.4% 20.2% 24.0%
EPS	2.52	2.10 2.67

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單位：新台幣仟元

項目/年度	Q1~Q3 2018	Q1~Q3 2017 YoY(%)
	金額％	金額％ TWD RMB
營業收入	6,005,669 100.0%	5,990,691 100.0% 0.25% -1.98%
營業毛利	1,418,565 23.6%	1,444,782 24.1% -1.81% -3.99%
營業利益	991,515 16.5%	1,049,671 17.5% -5.54% -7.64%
稅前淨利	984,517 16.4%	1,043,785 17.4% -5.68% -7.77%
所得稅	(338,795) -5.6%	(351,229) -5.9% -3.54% -5.68%
本期淨利	645,722 10.8%	692,556 11.6% -6.76% -8.83%
EPS(註)	6.46	6.93

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Unit: NTD’000

Items	Q3 2018	Q2 2018 Q3 2017
Cash	3,070,023	2,653,544 2,347,334
Trade receivables	761,660	988,534 955,702
Inventories	278,876	286,242 269,625
Other current assets	1,788,449	2,044,406 1,985,758
Fixed assets	756,073	773,855 489,920
Other assets	178,352	183,331 53,861
Total assets	6,833,433	6,929,912 6,102,200
Short-term borrowings	93,156	96,453 50,061
Tradepayables	484,841	602,536 602,505
Other current liabilities	1,315,297	1,371,844 766,998
Total liabilities	1,893,294	2,070,833 1,419,564
Share capital	1,000,000	1,000,000 1,000,000
Capital reserves	1,548,200	1,548,200 1,548,200
Retained earnings	2,852,246	2,600,219 2,475,197
Other reserves	-460,307	-289,340 -340,761
Total equity	4,940,139	4,859,079 4,682,636

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AI assistant

Lida Interim / Quarterly Report 2018

52404_rns_2018-11-19_85aef405-d92b-4f97-b6cf-4dcea515b96e.pdf

Date of

Establishment

Laser Cutting

CNC Machine Center

Robot Arms

Measuring Equipment Accessories

Dynamic Movie Theater

Printing Equipment

PET Blowing

Pneumatic Tools

Paint Spraying

Equipment Application

Textile Equipment

Production line

Medical equipment

Food & Beverage processing

Transport

2016 年首三季2017

Original large distribution channels

Innovative service sales model

Unit: NTD’000

單位：新台幣仟元

Unit: NTD’000

Thank You.

Q&A

AI assistant

Lida — Interim / Quarterly Report 2018

52404_rns_2018-11-19_85aef405-d92b-4f97-b6cf-4dcea515b96e.pdf

Date of

Establishment

Laser Cutting

CNC Machine Center

Robot Arms

Measuring Equipment Accessories

Dynamic Movie Theater

Printing Equipment

PET Blowing

Pneumatic Tools

Paint Spraying

Equipment Application

Textile Equipment

Production line

Medical equipment

Food & Beverage processing

Transport

2016 年首三季2017

Original large distribution channels

Innovative service sales model

Unit: NTD’000

單位：新台幣仟元

Unit: NTD’000

Thank You.

Q&A

More from Lida

Lida Interim / Quarterly Report 2018