Lida — Investor Presentation 2016

Sep 9, 2016

Ticker：4552

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Lida Holdings Limited Corporate Presentation

September 2016

Contents

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Corporate Overview Product and Industry Operation and Business Model Operating Results Outlook

2

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l. Corporate Overview

可靠，源於專業 專業，始於創新

3

Basic Information

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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 including"Luowei", "Lida" and "Chao Bao".
Consolidated Revenue	NT$7.6 billion (FY2015)
Production Sites	1. Quanzhou City, Fujian Province - Lida (China) Machine Equipment Co., Ltd. 2. 九江, Jiangxi Province - Lida (Jiangxi) Machine Equipment Co., Ltd.
No. of Employees	1,472 (as of August 31, 2016)

4

Holding Structure

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Lida Holdings (Cayman) 100% Wellsoon International Limited (BVI) 100% Lida (HK) Holdings

100% China Operating Entities Lida (China) Machine Equipment Co., Ltd. Est. in March 2001 100% Lida (Jiangxi) Machine Equipment Co., Ltd. Est. in February 2012

5

Key Milestones

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1993	Entered the Chinese air compressor industry
1998/10	Established PRC entity "Fujian Quanzhou Lida Machinery Co., Ltd."
1997/11	Registration of the "Luowei" trademark
1999/10	Registration of the "Lida" trademark
2001/03	Restructured as Sino-foreign joint venture company
2004/06	"Luowei" brand gained recognition as a "Fujian Province Famous Product"
2006/11	"Luowei" brand received the prestigious national "China Famous Trademark" recognition
2009/06	Established Hong-Kong holding company, Lida (HK) Holdings
2008/12	"Lida" brand gained recognition as a "Fujian Province Famous Product"
2010/12	Corporate identity changed to Lida (China) Machine Equipment Co., Ltd.
2012/02	Investment in subsidiary Lida (Jiangxi) Machine Equipment Co., Ltd.
2012/05	Established Lida Holdings, a Cayman Island-incorporated entity for the purpose of Taiwan public listing
2014/07	New Jiangxi plant in full operation

6

Board of Directors

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Title	Entity / Name	Place of Incorporation / Nationality	Shareholding	Shareholding	Education & Past Experiences
			# of Shares	%
Chairman	Yi Yuan Enterprises Limited : Representative: Wu Chien-Neng	BVI / Taiwan	31,500	31.5%	- Oriental Academy of Industrial Technology , Taiwan - CEO of Quanzhou Yida Electrical Appliance - AVP, Home Appliances Division, Taiwan Tsannkuen Co., - Technical Department Manager, Sanyo Electric Taiwan
Director	Gain Fortune Development Ltd Representative: Huang DaPing	BVI / China	16,940	16.94%	- Various business in property development, media, etc.
Director	Leo Holdings Investments Ltd. Representative: John Yang	BVI / Hong Kong	13,455	13.46%	- BS, University of Toronto - Partner, Excelsior Capital Asia; Investment Director, Prime Partners Asset Management Group; Cazenove (Asia)
Director	Kong Wai Fung	Hong Kong	－	－	- BS, Hong Kong Polytechnic University - Certified in Transport and Logistics Professional
Independent Director	Ma Chia-Ying	Taiwan	－	－	- Ph.D. in Accounting, Lehigh University - Professor of Accounting, Soochow University - Independent director of Richtek Technology and and TSC Auto-ID Technology
Independent Director	Huang Ling Fang	Taiwan	－	－	- LLM, National Chengchi University - Independent director of New Palace International Co. and PharmallyInternational Holding
Independent Director	Kelvin Shen	Taiwan	－	－	- Masters of Management, Fu Jen Catholic University - Deputy General Manager, Industrial Technology Investment Corporation 7

Key Management

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Title	Name	Nationality	Education & Past Experiences
General Manager	Chen Yi Ping	China	- Fujian Normal University - Deputy General Manager, Lida (China) Machine Equipment Co., Ltd
Deputy General Manager	Barry Lau	China	- Jimei University, Xiamen
CFO	Daniel Kwan	Hong Kong	- Hong Kong Polytechnic University - Qualified CPA in HK - BDO Limited, Hong Kong
Manager, Sales Division	Kam Chuang	China	- Liming Vocational University, Quanzhou
Technical Director	Wu Chong Hong	Taiwan	- Factory Head, Taiwan Ming Tyan Iron Works Co., Ltd
Internal Auditor	Tony Chang	Taiwan	- Master of Accounting, Soochow University - Taiwan CPA - In-charge Senior, Audit Service, Deloitte & Touche Taiwan

8

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ll. Products & Industry

可靠，源於專業 專業，始於創新

9

Air Compressor Classifications

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Reciprocating
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Jet
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Turbine
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Scroll
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Centrifugal
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Axial Flow
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Piston
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Sliding Vane
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Rolling Rotor
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Screw
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10

Air Compressor Process Flow

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Pressurized air, clean air
Petrochemical industry
Sandblasting
Air Tank
Pneumatic tools
Paint spray, electroplating,
injection molding
Food & beverage
Air Compressor
processing
Dehumidifier and
filter
11
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Production Process of Piston Type

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繞線 壓轉子 曲軸箱毛坯 下料
嵌線
曲軸箱機加工 沖孔
整形
轉子機加工
曲軸箱 卷圈
綁線
浸漆烘乾
機頭組裝 焊接
定子 轉子
機頭試車 儲氣桶
電機組裝
機頭塗裝 儲氣桶塗裝
電機塗裝
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空氣壓縮機成品組裝 成品試車

成品包裝

12

Applications of Air Compressor

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Industry	Function	Sample Applications
Industrial Manufacturing	Pneumatic Power	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
Food & Pharmaceutical		Spraying, e.g. painting and rust removal
		PET bottle blowing
		Soda carbonation, automated packaging lines
Textile & Apparel		Air-powered sewing machines
		Sandblastingof denims
Transport		Automotive brakes, opening/close of bus doors, railway engineering equipment
Chemical & Petrochemical		Well fracturing, earth frackingfor oil drilling
	Synthesis & Polymerization	Synthesis and polymerization of chemical raw materials, such as synthetic nitrogen, methanol and urea
	Transmission	Longdistance transmission of naturalgas
Refrigeration & Gas Separation	Refrigeration & Gas Separation	Refrigerated air, Freon compressor
	Transmission	Transmission of refrigerated air and/or separated air
Mining & Metallurgy	Pneumatic Power	Drillingequipment, such as rock drill,pneumatic drill & hammer
		Blasting
	Transmission	Transmission of combustiongases, cement, andprovision of air in mines

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Real World Use of Air Compressors

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Laser Cutting
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Robot Arms

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CNC Machine Center

Measuring Equipment Accessories

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14

Real World Use of Air Compressors

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Textile Equipment

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Paint Spraying

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PET Blowing

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Pneumatic Tools

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Real World Use of Air Compressors

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Paint Spraying

Dynamic Movie Theater

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PET Blowing

Pneumatic Tools

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16

Industry Composition of End Users

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Mining &
Metallurgy, Machinery &
Chemical & 15% Manufacturing
40%
Petrochemical
20%
Pharmaceutical,
F&B, and
Others
25%
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Source: China General Machinery Industry Association, Compressor Sub-association

17

Size of Chinese Air Compressor Industry

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Unit: RMB 100 million

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500 456
427
398
369
400
340
312
280
300
252
228
193
200 149
100
0
2009 2010 2011 2012 2013 2014 2015E 2016E 2017E 2018E 2019E
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Source: China General Machinery Industry Association, Compressor Sub-association; Qianinfo Consulting

In tandem with China's economic growth and increased adoption of industrial automation, the market size of the Chinese air is to reach RMB 45.6 compressor industry expected billion by 2019. Various macroeconomic policies launched in recent years, such as "Supply Side Reform" and "New Type Urbanization Plan", will become growth drivers of the air compressor industry.

18

Product Overview

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Product Overview	Product Overview
Category		Revenue % (2016H1)	Attributes & Application
Piston-type		46%	Ease of use, high mobility, affordability. Wide range of users, from individuals to small- and medium- enterprises.
Screw-type		40%	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%	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.
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Growth Rates, by Product

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Unit: NT$ 000's

	Unit: NT$ 000's	Unit: NT$ 000's	Unit: NT$ 000's	Unit: NT$ 000's	Unit: NT$ 000's	Unit: NT$ 000's
- 500,000 1,000,000 1,500,000 2,000,000 2,500,000 3,000,000 3,500,000 4,000,000
Type		2012	2013	2014	2015	CAGR
Piston Compressor		2,825,968	3,262,922	3,655,178	3,844,830	10.81%
Screw Compressor		1,571,557	2,012,290	2,423,332	2,855,091	22.02%
Scroll Compressor		-	213,914	542,384	779,684	90.91%
Others		94,990	118,662	127,525	136,044	12.72%
TOTAL		4,492,515	5,607,788	6,748,419	7,615,649	19.24%

20

Revenue b roducts y p

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•  F-Variable Screw Compressors，Revenue 2016Q2: NTD100.14 million， – compared to 2016Q1: NTD60.76 million，QoQ+64.8%. Sroll compressors Revenue – 2016Q2: NTD245.27 million, YoY+30.65%, QoQ+6.92% .

Items Piston		2016H1 Amount ％ 1,845,472 46% 1,423,697 36% 160,893 4% 1,584,590 40% 474,666 12% 69,445 2% 3,974,173 100%	2015H1	YoY		2016Q2		Unit：NTD’000 2016Q1 QoQ Amount ％ 877,491 47% 10.31% 683,473 36% 8.30% 60,756 3% - 744,229 40% 12.92% 229,401 12% 6.92% 32,752 1% 12.03% 1,883,873 100% 10.96%	Unit：NTD’000 2016Q1 QoQ Amount ％ 877,491 47% 10.31% 683,473 36% 8.30% 60,756 3% - 744,229 40% 12.92% 229,401 12% 6.92% 32,752 1% 12.03% 1,883,873 100% 10.96%
			Amount ％			Amount ％
			1,893,784 52%	-2.55%		967,981 46%			10.31%
Screw F-Variable screw Sub-total			1,350,549 37% - - 1,350,549 37%	5.42% - 17.33%		740,224 35% 100,137 5% 840,361 40%			8.30% - 12.92%
Scroll			315,322 9%	50.53%		245,265 12%			6.92%
Others			65,778 2%	5.57%		36,693 2%			12.03%
Total			3,625,433 100%	9.62%		2,090,300 100%			10.96%

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Lida end users b Industr , y y

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2015 2016H1
Others, 14.0%
Others, 16.3%
Machinery and
manufacturing
Food Machinery and
Food 30.6%
manufacturing, …
Processing,
Processing,
12.9%
12.5%
Bio-Pharmaceuticals,
Auto
Auto Manfacturing,
9.5%
Bio-Pharmaceuticals, Manufacturing 6.8%
8.8% 6.5% Construction, 4.4%
Printing &
packing, 4.8 % Construction, Electronics, 8.3%
Electronics, 8.6% Printing &
Textile & Apparel,
5.2%
packing, 5.1 %
Textile & Apparel, 6.7% 7.2%
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Source: Lida

22

Our End Users

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23

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lll. Operation & Business Model

可靠，源於專業 專業，始於創新

24

Business Model

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Operating Model

Through professional competency in R&D, production and marketing, our selfbranded are general-purpose air compressors sold through a comprehensive network of distributors.

Air compressors are widely applied in different sectors such as manufacturing, construction and decoration, textile and garment, food processing, pharmaceuticals, medicals, transportation, petrochemicals and mining and metallurgy.

there is no substitutable for air therefore our Currently fully product compressors, products are subject to lesser impact coming from single-industry cycles.

Production Sites	Location	Area	Positioning
Lida (China)	Quanzhou city, Fujian	37,101 m2	R&D, production and sales for overseas markets and coastalprovinces)
Lida (Jiangxi)	Jiujiang city, Jiangxi	58,529 m2	Production and sales (inland provinces)

25

Sales Networks

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Sales Channels

• China: a network of 70 key distributors

• Overseas: importers & trading houses

Major markets

• China: 25 provinces and centrally-governed cities, including Beijing, Sichuan, Hubei and Jiangsu

• Overseas: Southeast Asia, Turkey, South Africa

• Proactive development of Southeast Asian market, Revenue of Asian market in 2016H1 was NTD170 million; Revenue of Indonesia was NTD20.87 million, having the growth of 225% compared to the corresponding period of 2015H1.

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100.00%
89.46% 91.70% 90.10% 91.02% 90.73% 內銷
50.00%
外銷
10.54% 8.30% 9.90% 8.98% 9.27%
0.00%
2012年 2013年 2014年 2015年 2016年H1
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26

Competitive Landscape

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Major foreign players

Name	Introduction	Major Products
Atlas Copco (Wuxi) Compressor	Found in 1873, headquarter located in Sweden. Atlas Copco (Wuxi) was set up in 1994.	Piston, oil-free, screw compressors, oil- lubricated air compressors, oil-free centrifugal compressors, control and monitoring systems and portable screw compressors
Shanghai Ingersoll Rand Compressor	Joint venture between Ingersoll Rand Compressor (USA) and Shanghai Compressors. Ingersoll Rand is one of the top 500 enterprises globally.	Screw compressors, portable compressors, centrifugal compressors

Market positioning of major foreign players：

1. Primarily focus on the large-size compressors; product life cycle from 30 to 40 years.

2. Product ASP normally double of local players.

3. Mainly serve large manufacturing clients.

27

Competitive Landscape

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Major local players

Name	Introduction	Major Products
Zhejiang Kaishan Compressor	Found in 2012. Kaishan is the largest screw compressor manufacturer in China. It is a publicly traded company in China.	Screw air compressor, refrigeration compressor, screw expander generator, and process gas compressor.
Shanghai Hanbell Precise Machinery	Taiwanese-invested enterprises set up in 1996. It is a publicly traded company in China.	Refrigerating compressor, screw refrigerant compressor, vacuum pump
ZheJiang Hongwuhuan Machinery	Founded in 1997. Products mainly used in construction, tunneling, power and mining machinery.	Piston compressor, screw air compressor, pneumatic rock drill, pneumatic and hydraulic down hole drill, breakers, drilling wagon.
Wuxi Compressor	Found in 1955, invested by Kobe Steel Group in 2011.	Industrial energy compressor, labyrinth compressor for petrochemical industry, piston compressor, screw compressor, centrifugal compressor.

28

Competitive Landscape

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Items	Lida (4552 TW)	Kaishan (300257 CH)	Hanbell (002158 CH)
Revenue, by region (2015)	China 91% Overseas 9%	China 95% Overseas 5%	China 93% Overseas 7%
Sales model	Distributors 100%	Mainly distributors with some direct sales	Mainly direct sales with some sales through distributors
Target customers	Machine manufacturing, food processing pharmaceutical, auto industry, textile and garment, automation industry	Metallurgical industry, chemical industry, large scale construction industry	Refrigerant compressors, primarily supplied to air- conditioner manufacturers
Revenue, by product (2015)	Piston 50% Screw 37% Scroll 10% Others 2%	Piston 7% Screw 69% Others 24%	Screw refrigerant 65% Air compressors 21% Others 14%

29

Market Share

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1. According to statistics from China General Machinery Industry Association, the global market size of the air compressor industry was approximately US$35 billion in 2014.

2. According to statistics from Compressor Magazine, China’s air compressor industry market size reached RMB31.2 billion (including piston, screw and other type of air compressors). The industry expected to continue growing steadily, and expected to achieve RMB34 billion of sales in 2015.

3. Based on industry data, Lida’s market share in China reached 4.4% in 2014. Overall, foreign players account for approximately 50% of market share in China.

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Lida is a leading
Foreign
50% player in the
general-purpose
Others air compressor
29.86% segment!
KaiShan Lida
HanBell
6.33% 4.40%
3.06%
HongWuHuan WuXi
2.52% 3.83%
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Basis of calculation: Lida 2014 revenue Information source: Qianinfo Consulting, Lida

30

Competitive Advantages

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Production R&D Strength Experience

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Reliability & Quality

Mature and stable distribution network

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31

New Product – Screw Compressor

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F-Variable Frequency Compressor

Ability to set air pressure at any desired level and output at constant pressure, providing greater energy savings

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Typical Cost Structure of Air Compressor Over Lifetime of Use

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Purhcase
Maintenance Cost, 14%
Cost, 9%
Energy Cost,
77%
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Lida Advantage

1. 23%-40% more energy efficient compared to traditional air compressors.

2. 13%-20% more energy efficient compared to F-Variable Frequency compressors offered by competitors.

Source: Lida, peer websites

32

New Product – Scroll Compressor

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Scroll Compressor

Reduced size, longer operating life and higher dependability

• High volumetric efficiency.

• Low torque variation and less vibration.

• Ease and lower cost of maintenance.

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Dual cooling systems

• Automated system adjustment according to operating conditions.

• Intelligent suite of protection system, including temperature, phase, over-voltage etc.

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Radial flexible compensating mechanism offers 10% efficiency ain g

• Lower and more stable operating temperature improves compression efficiency by 1~5%

• Improved electrical system performance by 2~5% when operating at 80-90% loading

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33

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lV. Operating Results

可靠，源於專業 專業，始於創新

34

Revenue and Profit

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Unit: NTD’000
Revenue Net profit
8,000,000
7,615,649
7,000,000
6,748,419
6,000,000
5,607,788
5,000,000 4,492,515
3,974,173
4,000,000
3,000,000
2,000,000
758,945 934,530
587,118
1,000,000 453,239 492,351
0
2012 2013 2014 2015 2016H1
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35

Revenue and Profit

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 Revenue in 2016Q2 was slowed down mainly due to the adverse effect of flooding in major provinces in China, such as Hubei and Jiangsu. This led to the delay of orders from customers due to their temporary closure. 2015H1vs2016H1 2016年Q1vs2016Q2

Unit: NTD’000

0 500,000 1,000,000 1,500,000 2,000,000 2,500,000 3,000,000 3,500,000 4,000,000 4,500,000	3,625,433 3,974,173 454,242 492,351 2015H1 2016H1 Revenue Net profit 0 500,000 1,000,000 1,500,000 2,000,000 2,500,000	Revenue Net profit
		1,883,873 2,090,300
		258,198 234,153
		2015Q1 2016Q2

36

Profitabilit Indicators y

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0.00% 5.00% 10.00% 15.00% 20.00% 25.00% 30.00%	Gross profits margin Operating margin Net profits margin	Gross profits margin Operating margin Net profits margin	Gross profits margin Operating margin Net profits margin	Gross profits margin Operating margin Net profits margin	Gross profits margin Operating margin Net profits margin
	23.71% 2377% 24.90%
	22.19% . 24.44%
	15.37% 17.38% 17.10% 18.29% 17.78%
	12.27% 12.39%
	10.09% 10.47% 11.25%
	2012 2013 2014 2015 2016H1

37

Profitabilit Indicators y

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 The G.P. margin decreased compared to the corresponding period of last year, mainly due to the continuous increase in steel price in current period and the low steel price leading to higher G.P. base in corresponding period in last year. 2015H1&2016H1 G.P. comparison 2016Q1&2016Q2 G.P. comparison

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Gross profits margin Gross profits margin
Operating margin Operating margin
30.00% 30.00%
Net profits margin Net profits margin
25.35% 25.15%
24.44%
25.00% 25.00%
23.81%
20.00% 18.73% 20.00%
18.50%
17.78%
17.12%
15.00% 15.00% 13.71%
12.39%
12.53%
11.20%
10.00% 10.00%
5.00% 5.00%
0.00% 0.00%
2015H1 2016H1 2016Q1 2016Q2
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38

Prices of Cold Rolled Steel in China

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Source: Bloomberg

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Gross Profits Mar in b Products g y

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50.00%
40.00%
30.00%
20.00%
10.00%
0.00%
2012 2013 2014 2015 2016H1
Piston 20.56% 22.08% 23.02% 23.57% 22.86%
Screw 24.37% 26.01% 24.49% 25.81% 24.89%
Scroll 19.01% 22.60% 25.64% 26.80%
Others 34.34% 38.11% 36.93% 39.13% 40.24%
Total 22.19% 23.71% 23.77% 24.90% 24.44%
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Gross Profits Mar in b Products g y

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Items	2016H1	2015H1	2016Q2	2016Q1
Piston Screw Scroll Others Total	22.86% 24.89% 26.80% 40.24% 24.44%	24.32% 26.13% 24.79% 41.79% 25.35%	21.98% 24.50% 26.56% 37.84% 23.81%	23.83% 25.34% 27.05% 42.92% 25.15%

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Balance Sheet

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				Unit: NTD’000	Unit: NTD’000
Items	2012	2013	2014	2015	2016Q2
Cash	409,213	945,189	1,474,402	1,179,482	1,463,604
Trade receivables	499,188	629,374	720,605	799,463	812,966
Inventories	239,940	275,063	258,653	231,324	323,273
Other current assets	427,358	8,846	421,943	1,609,153	1,583,435
Fixed assets	232,142	487,541	510,467	483,323	453,435
Other assets	40,701	62,871	44,590	42,461	42,257
Total assets	1,848,542	2,408,884	3,430,660	4,345,206	4,678,970
Short-term borrowings	714,545	98,459	106,932	104,895	101,745
Trade payables	296,631	388,735	438,950	459,892	562,789
Other current liabilities	286,393	931,412	419,947	550,965	582,143
Non-current liabilities	114,385	－	－	－	-
Total liabilities	1,411,954	1,418,606	965,829	1,115,752	1,246,677
Share capital	465,541	465,541	900,000	900,000	900,000
Capital reserve	0	352,753	536,966	536,966	536,966
Retained earnings	(52,675)	164,335	923,280	1,740,810	2,053,161
Other reserves	23,722	7,649	104,585	51,678	(57,834)
Total equity	436,588	990,278	2,464,831	3,229,454	3,432,293

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Balance sheet

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			2016Q1 Amount ％ 1,405,153 30.13 799,775 17.15 325,726 6.98 1,617,566 34.68 473,113 10.14 42,405 0.92	Unit：NTD’000 2015Q2 Amount ％ 1,937,663 48.51 805,172 20.16 301,303 7.54 413,519 10.35 491,727 12.31 44,720 1.12 3,994,104 100.00 104,433 2.61 511,307 12.8 635,492 15.91 1,251,232 31.33 900,000 22.53 536,966 13.44 1,260,522 31.56 45,384 1.14 2,742,872 68.67
Items		2016Q2 Amount ％ 1,463,604 31.28 812,966 17.37 323,273 6.91 1,583,435 33.84 453,435 9.69 42,257 0.91
Cash Trade receivables Inventories Other current assets Fixed assets Other assets
Total assets		4,678,970 100.00	4,663,738 100.00
Short-term borrowings Trade payables Other current liabilities		101,745 2.17 562,789 12.03 582,143 12.44	104,412 2.24 555,618 11.91 534,911 11.47
Total liabilities		1,246,677 26.64	1,194,941 25.62
Share capital Capital reserves Retained earnings Other reserves		900,000 19.24 536,966 11.48 2,053,161 43.88 (57,834) -1.24	900,000 19.30 536,966 11.51 1,999,008 42.86 32,823 0.70
Total equity		3,432,293 73.36	3,468,797 74.38

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Income Statement

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Items Revenue Gross profits Operating profits Profits before tax Income tax Net profits EPS(Note)	Unit：NTD’000	Unit：NTD’000	Unit：NTD’000	Unit：NTD’000	Unit：NTD’000	Unit：NTD’000	Unit：NTD’000	Unit：NTD’000	Unit：NTD’000	Unit：NTD’000
	2012		2013		2014		2015		2016H1
	Amount	％	Amount	％	Amount	％	Amount	％	Amount	％
	4,492,515 100% 996,710 22% 690,602 15% 671,795 15% 218,556 5% 453,239 10% 5.92		5,607,788 100% 1,329,677 24% 974,685 17% 898,959 16% 311,841 6% 587,118 10% 7.67		6,748,419 100% 1,604,375 24% 1,154,017 17% 1,144,557 17% 385,612 6% 758,945 11% 9.15		7,615,649 100% 1,896,336 25% 1,392,685 18% 1,403,075 18% 468,545 6% 934,530 12% 10.38		3,974,173 100% 971,449 24% 706,456 18% 725,904 18% 233,553 6% 492,351 12% 5.47

Note: EPS was calculated based on the retrospective weighed average no. of shares. The retrospective weighed average no. of shares for 2012, 2013, 2014, 2015 and 2016H1 76,545,000, 76,545,000, 82,908,000, 90,000,000 and 90,000,000 44 respectively.

Income Statement

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		2015H1 Amount ％ 3,625,433 100% 919,027 25% 678,991 19% 683,075 19% 228,833 6% 454,242 13% 5.05	YoY 9.60% 5.70% 4.00% 6.30% 2.10% 8.40% 8.30%		Unit：NTD’000 2016Q1 QoQ Amount ％ 1,883,873 100% 10.96% 473,754 25% 5.05% 348,521 19% 2.70% 368,180 20% -2.84% 109,982 6% 12.36% 258,198 14% -9.31% 2.87 -9.41%	Unit：NTD’000 2016Q1 QoQ Amount ％ 1,883,873 100% 10.96% 473,754 25% 5.05% 348,521 19% 2.70% 368,180 20% -2.84% 109,982 6% 12.36% 258,198 14% -9.31% 2.87 -9.41%
Items	2016H1 Amount ％ 3,974,173 100% 971,449 25% 706,456 18% 725,904 19% 233,553 6% 492,351 13% 5.47	2015H1		2016Q2 Amount ％ 2,090,300 100% 497,695 24% 357,935 17% 357,724 17% 123,571 6% 234,153 11% 2.60	2016Q1
		Amount ％			Amount ％
Revenue Gross profits Operating profits Income before tax Income tax Net profits EPS		3,625,433 100% 919,027 25% 678,991 19% 683,075 19% 228,833 6% 454,242 13% 5.05			1,883,873 100% 473,754 25% 348,521 19% 368,180 20% 109,982 6% 258,198 14% 2.87	10.96% 5.05% 2.70% -2.84% 12.36% -9.31% -9.41%

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Financial Ratio Anal sis y

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Items	2016H1	2015H1	2016Q2	2016Q1
Trade receivables turnover days Stock turnover days Net profits margin(%) Return on equity(%) EPS(NTD)	37 17 12.39 14.78 5.47	38 19 12.53 17.45 5.05	35 19 11.20 6.79 2.60	39 18 13.71 7.71 2.87

46

Ratio Anal sis y

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Items	Year Company	2012	2013	2014	2015
Revenue	Lida	4,492,515	5,607,788	6,748,419	7,615,649
	KaiShan	7,582,292	9,412,969	9,817,193	8,243,332
	HanBell	3,282,639	4,102,403	4,869,666	4,474,689
Trade receivables turnover days (days)	Lida	37	37	37	36
	KaiShan	59	62	108	185
	HanBell	119	109	102	117
Inventories turnover days (days)	Lida	26	22	19	16
	KaiShan	128	130	150	181
	HanBell	84	89	79	89
Net profits margin(%)	Lida	10.09	10.47	11.25	12.27
	KaiShan	18.65	18.29	16.69	10.90
	HanBell	15.22	17.56	18.52	17.6347

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V. Outlook

可靠，源於專業 專業，始於創新

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Outlook

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• Benefited from the upgrade for the automation of factories, as well as the recent improvement of various economic indicators in China. The customers tended to increase their sales orders to the Company, especially for the high efficiency screw and scroll air compressors. The revenue for the second half of 2016 can therefore be benefited.

• Initiation of several high-profile national level development policies by the Chinese government, including 13[th] Five-Year Plan, China Manufacturing 2025, One Belt One Road, Supply Side Reform, and New-type Urbanization, all serve to promote industrial automation, reduce emission, and enhance energy efficiency. As industries upgrade, we expect a new wave of demand for air compressors.

• Launched two types of new scroll air compressors to meet market demand in July 2016. It was expected F-Variable screw air compressors and scroll compressors continue to be the major engines for future growth of the Company. 。

• Already raised the sales prices for some products in 2016Q3 to partly offset the effect of decrease in gross profits margin due to the increase in steel price in 2016Q2.

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Thank you

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