Lida — Interim / Quarterly Report 2019

Aug 21, 2019

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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

Chairman

General Manager

Paid-in Capital

Business Scope

Consolidated Revenue

Production Sites

No. of Employees

May 11, 2012

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

Chen Yi-Ping

NT$1 billion

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

NT$2.75 billion /EPS 1.67(2019H1)

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

2. 九江, Jiangxi Province - Lida (Jiangxi) Machine Equipment Co., Ltd.

1,525

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	Main Products	Main Products	Main Products	Main Products	Main Products
	Category		Revenue % (2018Y)	Revenue % (2019H1)	Attributes & Application
	Piston- type		35.8%	32.3%	⚫Ease of use, high mobility, affordability. ⚫Wide range of users, from individuals to small- and medium- enterprises.
	Screw- type		48.6%	52.0%	⚫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		11.9%	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. 4

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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
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Laser Cutting
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Dynamic Movie Theater

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Production line
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Robot Arms CNC Machine Center

Paint Spraying

Textile Equipment

Food & Beverage processing

PET Blowing Printing Equipment

Pneumatic Tools

Medical equipment

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2016 年首三季2018

2015年度 2019H1

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Others, 9.4%
Others,
9.7%
Food Food
Industrial
Processing, Processing, Industrial
9.9% Manufacturing, 9.7% Manufacturin
34.4%
g, 34.2%
Pharmaceutical,
CAGR
Pharmaceutic
9.5%
al, 9.6%
Electronics, 7.6%
Electronics,
Auto
Package Mining & Package
7.3%
Manufacturin Auto
printing, 4.0% Metallurgy, printing, 3.9% Mining &
8.6% g, 4.8% Metallurgy, 9.0% Manufacturing,
Textile&Appa 5.0%
Chemical & Textile&Appar
Chemical &
rel, 6.4%
el, 6.1%
Petrochemical, 5.2%
Petrochemical, 5.5%
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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. 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. 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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PRODUCT DIVERSIFICATION
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Screw Type F Type Two-Stage Type E Type 中低壓系列

Scroll Type

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SALES MODEL
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Main building of Beijing 2008 Olympic Games

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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ENHANCE BRAND AWARENESS
HANNOVER MESSE 2019 China Import and Export Fair
2019
CAGR
Taiyuan Coal (Energy) Industrial Technology
and Equipment Exhibition 2019
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LIDA INDUSTRIAL PARK
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➢ Purpose

Internal factor: Develop high-end screw compressor market for long-term demand and scale.

~~~~ External factor: Cooperate with the 內部因素：舊廠已無法滿足公司目前政策定位下的主流市場長期的需求及規模。 government in increasing the efficiency and 外部因素：配合政府對於土地的效益提升及規劃政策，提前進行舊廠搬遷計畫。proper planning for the land use policy. 面積 ➢ Area 新廠地點於泉州台商投資區，自有工業用地278市畝，項目總面積185,514平方公 Located in Taiwanese Zone, Quanzhou. Total industrial use area is 185,514 square 尺。 meter. 金額 ~~➢~~ Amount

興建廠房預算約為人民幣4.89億元，將依整體工程時程規畫陸續發包  The budget for construction of the new 進度 factory is RMB489 million. The construction is subcontracted according to the planned 已於2018年8月正式動工，於年底已完成地基工程，預計整體興建完工約2~3年， timetable.

約2020年12月底前。

➢ Progress

Commenced on August 2018. 30% completed as at today. Expected completion date: end of 2020.

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Unit: NT’000

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2,500,000 3.00
2,153,567
1,964,794 2.52 2.50
2,000,000
2.10
1,537,312 2.00
1,466,334
1,500,000
1,279,793
1.50
1,000,000 1.24
1.03 1.00
500,000 360,085 0.64
324,523 0.50
249,842
145,145
104,625
0 0.00
2018Q2 2018Q3 2018Q4 2019Q1 2019Q2
Revenue Operating Profits Net Profits EPS
◼ YoY-31.9% ◼ YoY-59.7% ◼ YoY-51.1%
◼ QoQ+14.6% ◼ QoQ+38.7% ◼ QoQ+59.4%
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30.0%
25.0% 23.7% 23.2% 23.6%
20.2%
19.0%
20.0%
16.7% 16.5% 16.3%
15.0%
12.8% 9.9%
10.0% 8.2%
9.7%
8.1%
7.0%
5.0%
5.0%
0.0%
2018Q2 2018Q3 2018Q4 2019Q1 2019Q2
Gross Margin Operating Profits Margin Net Profits Margin
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100% 9.9% 12.3% 12.0% 14.5% 90% 18.2% 19.7% 24.3% 80% 70% 60% 50% 90.1% 87.7% 88.0% 85.5% 40% 81.8% 80.3% 75.7% 30% 20% 10% 0% 2018Q2 2018H1 2018Q3 2018Q4 2019Q1 2019Q2 2019H1 China Other Regions

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100%
2.4% 2.8% 3.1% 2.7% 2.5%
90% 12.8% 13.1% 13.0% 13.1% 13.1%
80%
70%
60% 48.4% 48.6%
50.5% 51.0% 52.8%
50%
40%
30%
20%
36.4% 35.5%
33.4% 33.2% 31.5%
10%
0%
2018Q2 2018Q3 2018Q4 2019Q1 2019Q2
Piston Screw Scroll Others
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28.0%
26.9%
26.1%
25.8%
25.5% 25.5%
26.0% 25.0%
23.9%
24.0%
22.8%
22.0%
20.5%
20.2%
20.0%
19.6%
20.0% 19.1%
18.0%
16.0%
14.2%
13.4%
14.0%
12.0%
2018Q2 2018Q3 2018Q4 2019Q1 2019Q2
Piston Screw Scroll
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5years Steel Prices in China

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Unit: NTD’000

Items		2019Q2	2019Q1 2018Q2 YoY(%) QoQ(%)
		Amount ％	Amount ％ Amount ％ TWD RMB TWD RMB
Revenue		1,466,334100.0%	1,279,793 100.0% 2,153,567 100.0% 14.6% 14.8% -31.9% -30.2%
Gross profits		295,73820.2%	242,723 19.0% 510,689 23.7% 21.8% 22.1% -42.1% -40.7%
Operating profits		145,145 9.9%	104,625 8.2% 360,085 16.7% 38.7% 39.0% -59.7% -58.7%
Income before tax		158,87210.8%	103,277 8.1% 334,339 15.5% 53.8% 54.1% -52.5% -51.3%
Income tax		(56,281) -3.8%	(38,935) -3.0% (124,731) -5.8% 44.6% 44.9% -54.9% -53.8%
Net profits		102,591 7.0%	64,342 5.0% 209,608 9.7% 59.4% 59.8% -51.1% -49.9%
EPS		1.03	0.64 2.10

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Unit: NTD’000

Items	2019Q2	2018Q1 2018Q2
Cash	2,463,748	2,489,424 2,653,544
Trade receivables	1,130,183	847,725 988,534
Inventories	257,476	290,213 286,242
Other current assets	1,851,213	2,048,968 2,044,406
Fixed assets	948,753	672,963 773,855
Other assets	254,818	174,158 183,331
Total assets	6,906,191	6,523,451 6,929,912
Short-term borrowings	49,731	51,117 96,453
Tradepayables	785,560	519,977 602,536
Other current liabilities	968,083	742,046 1,371,844
Total liabilities	1,803,374	1,313,140 2,070,833
Share capital	1,160,000	1,000,000 1,000,000
Capital reserves	1,548,200	1,548,200 1,548,200
Retained earnings	2,753,062	2,890,611 2,600,219
Other reserves	(358,445)	-228,500 -289,340
Total equity	5,102,817	5,210,311 4,859,079

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Thank You.

Q&A

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