Lida — Interim / Quarterly Report 2018

Mar 28, 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$7.54 billion /EPS 7.7(2018Q4)

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

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

1,521 (as of Mar. 25, 2019)

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	Main Products	Main Products	Main Products	Main Products	Main Products
	Category		Revenue % (2017)	Revenue % (2018)	Attributes & Application
	Piston- type		41.6%	35.8%	⚫Ease of use, high mobility, affordability. ⚫Wide range of users, from individuals to small- and medium- enterprises.
	Screw- type		44.1%	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		12.2%	12.9%	⚫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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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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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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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

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ENHANCE BRAND AWARENESS
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ComVac Asia (Nov 2018), Shanghai

WMF (Sep 2018), Shanghai

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Unit: NT’000

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2,500,000 3.00
2,133,141 2,153,567
1,964,794 2.52 2.50
2,000,000 1,887,308
2.31
2.10
1,537,312 2.00
1,500,000 1.84
1.50
1,000,000 1.24
1.00
500,000 336,252 306,907 360,085 324,523 0.50
249,842
0 0.00
2017Q4 2018Q1 2018Q2 2018Q3 2018Q4
Revenue Operating Profits Net Profits EPS
◼ YoY-27.9% ◼ YoY-25.7% ◼ YoY-46.4%
◼ QoQ-21.8% ◼ QoQ-23% ◼ QoQ-50.8%
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30.0%
25.0% 23.9% 23.7% 23.2% 23.6%
21.8%
20.0%
16.3% 16.7% 16.5% 16.3%
15.8%
15.0%
12.8%
10.0%
10.8%
9.8% 9.7%
8.1%
5.0%
0.0%
2017Q4 2018Q1 2018Q2 2018Q3 2018Q4
Gross Margin Operating Profits Margin Net Profits Margin
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100%
11.8% 13.8% 12.3% 9.9%
90% 18.2%
80%
70%
60%
50%
89.2% 86.2% 87.7% 90.1%
40% 81.8%
30%
20%
10%
0%
2017Q4 2018Q1 2018Q2 2018Q3 2018Q4
China Other Regions
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100%
2.3% 2.4% 2.4% 2.8% 3.1%
90% 12.7% 12.9% 12.8% 13.1% 13.0%
80%
70%
60% 46.8% 47.3% 48.4% 48.6%
50.5%
50%
40%
30%
20%
38.2% 37.4% 36.4% 35.5%
33.4%
10%
0%
2017Q4 2018Q1 2018Q2 2018Q3 2018Q4
Piston Screw Scroll Others
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29.0%
26.9%
26.7%
27.0% 26.2%
26.1%
25.8%
25.5% 25.5%
26.4% 25.0%
25.0% 26.0%
23.0%
20.8%
21.0% 20.2%
20.0%
19.3%
19.1%
19.0%
17.0%
15.0%
2017Q4 2018Q1 2018Q2 2018Q3 2018Q4
Piston Screw Scroll
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5years Steel Prices in China

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Unit: NTD’000

Items		2018Q4	2018Q3 2017Q4 YoY(%) QoQ(%)
		Amount ％	Amount ％ Amount ％ TWD RMB TWD RMB
Revenue		1,537,312 100.0%	1,964,794 100.0% 2,133,141 100.0% -27.9% -26.0% -21.8% -20.5%
Gross profits		362,977 23.6%	456,766 23.2% 465,487 21.8% -22.0% -19.9% -20.5% -19.3%
Operating profits		249,842 16.3%	324,523 16.5% 336,252 15.8% -25.7% -23.6% -23.0% -21.8%
Income before tax		204,713 13.3%	363,793 18.5% 346,626 16.2% -40.9% -39.0% -43.7% -42.3%
Income tax		(80,830) -5.3%	(111,766) -5.7% (115,299) -5.4% -29.9% -27.9% -27.7% -26.4%
Net profits		123,883 8.1%	252,027 12.8% 231,327 10.8% -46.4% -44.5% -50.8% -49.4%
EPS		1.24	2.52 2.31

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Unit: NTD’000

Items		2018	2017 YoY(%)
		Amount ％	Amount ％ TWD RMB
Revenue		7,542,981 100.0%	8,123,832 100.0% -7.15% -8.24%
Gross profits		1,781,542 23.6%	1,910,269 23.5% -6.74% -7.83%
Operating profits		1,241,357 16.5%	1,385,923 17.1% -10.43% -11.48%
Income before tax		1,189,230 15.8%	1,390,411 17.1% -14.47% -15.47%
Income tax		(419,625) -5.6%	(466,528) -5.7% -10.05% -11.11%
Net profits		769,605 10.2%	923,883 11.4% -16.70% -17.67%
EPS		7.7	9.24

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Unit: NTD’000

Items 2017	2018
Cash 2,331,573	2,619,243
Trade receivables 950,824	656,437
Inventories 284,466	310,456
Other current assets 1,996,505	1,801,518
Fixed assets 669,336	774,378
Other assets 64,507	175,743
Total assets 6,297,211	6,637,775
Short-term borrowings 50,215	93,912
Tradepayables 626,238	438,654
Other current liabilities 691,711	698,826
Total liabilities 1,368,164	1,231,392
Share capital 1,000,000	1,000,000
Capital reserves 1,548,200	1,548,200
Retained earnings 2,706,524	2,976,129
Other reserves -325,677	-417,946
Total equity 4,929,047	5,106,383

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Thank You.

Q&A

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