MERRY — Interim / Quarterly Report 2017

Nov 3, 2017

Merry Electronics

2017 Third Quarter Earnings Conference

Presented by : Allen Huang Date : 2017.10.26

0

2017 Third Quarter Financial settlement

(audited)

1

Consolidated Statements of Comprehensive Income

(audited)

(NT$ Thousand)

	3Q2017	2Q2017	3Q2016	QoQ	YoY
Net Revenue	6,484,836	5,368,400	4,932,787	+20.80%	+31.46%
Gross Profit	16.84%	19.00%	22.89%	-2.16ppt	-6.05ppt
operating expenses	(496,241)	(425,829)	( 500,578 )	+16.54%	-0.87%
Operating Margin	9.19%	11.07%	12.74%	-1.88ppt	-3.55ppt
non-operating earnings	140,829	73,145	512,097	92.53%	-72.50%
Net Income	615,223	540,317	916,479	13.86%	-37.87%
Net Profit Margin	9.49%	10.06%	18.58%	0.57ppt	-9.09ppt
EPS	3.25	2.89	5.01	+12.46%	-35.13%

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Proportion of the products revenue

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Battery Others
2% 2%
Handsfree
Speaker
1%
20%
Entertainment
Handsfree
Entertainment Speaker
75% Battery
Others
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3

(%)

Proportion of the products revenue

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Entertainment Speaker
YoY: 27.61% ; QoQ:19.40% YoY: 51.85% ; QoQ:36.93%
77% 21% 20%
20%
76%
76% 20%
75%
19% 19%
74% 75% 75% 19%
73% 18% 18%
18%
72%
17%
71% 17%
70% 16%
3Q2016 2Q2017 3Q2017 3Q2016 2Q2017 3Q2017
Handsfree Battery
6% YoY: -45.38% ; QoQ:7.84%
YoY: -45.11% ; QoQ:-33.84%
3% 5%
2% 5%
2%
2% 4%
2%
3% 2%
1%
2%
1%
2%
1% 1%
0% 0%
3Q2016 2Q2017 3Q2017 3Q2016 2Q2017 3Q2017
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4

Proportion of the products revenue (%)

Entertainment

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YoY: 27.61% ; QoQ:19.40%
77%
76%
76%
76%
75%
■ Wired/Entertainment
75% 75% 75%
■ Wireless/Entertainment
74%
3Q2016 2Q2017 3Q2017
3Q2016 2Q2017 3Q2017
25% 23%
29%
71%
75% 77%
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5

Proportion of the products revenue (%) Speaker

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21%
YoY: 51.85% ; QoQ:36.93%
20%
20%
19%
19%
18% 20%
■ Other 18% 19%
17%
■ NB&PC/Speaker Box 17% 18%
■ Mobile/Speaker Box 16%
3Q2016 2Q2017 3Q2017
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3Q2017

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3Q2016 2Q2017 3Q2017
16% 16% 15%
14% 14% 47%
71% 70% 38%
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6

Consolidated Gross Margin

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25.00%
22.35%
20.36%
22.89%
20.00%
19.00%
15.00%
16.84%
10.00%
5.00%
0.00%
3Q2016 2Q2017 3Q2017
consolidated Suzhou,Huizhou Plant
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7

Consolidated Operating Expenses

	Consolidated Operating Expenses million) YoY:-0.87% ; QoQ:16.54%
	77 69 81 218 163 185 205 195 231 501 426 496

8

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( NT$ million) YoY:-5.18% ; QoQ:0.27%
640 15.20%
12.74%
630
11.07% 12.20%
620
9.19%
9.20%
610
600 629 6.20%
590
594 596 3.20%
580
570 0.20%
3Q2016 2Q2017 3Q2017
Consolidated Operating Income Consolidated Operating Margin
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9

Consolidated Net Income & Margin

( NT$ million) YoY:-32.87% ; QoQ:13.86% 1,000 18.58% 20.00% 900 18.00% 800 16.00% 700 14.00% 9.49% 600 10.06% 12.00% 500 10.00% 916 400 8.00% 300 615 6.00% 540 200 4.00% 100 2.00% 0 0.00% 3Q2016 2Q2017 3Q2017

Consolidated Net Income Consolidated Net Profit Margin

10

Consolidated Earnings Per Share

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( NT$ dollar)
6
5.01
5
4
3.25
2.89
3
2
1
0
3Q2016 2Q2017 3Q2017
EPS 5.01 2.89 3.25
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11

Key Information

• At 11 September 2017, the board resolutions of Merry Electronics Co., Ltd. adopted the following important matters:

– In order to satisfy clients’ demands for raising the production capacity of acoustic products, our company will invest in the mainland China area. Furthermore, our company had entered into a joint venture agreement with Dongguan Luxshare Precision Industry Co. Ltd., to form Dongguan Luxshare & Merry Electronics Co., Ltd. as agreed. – The amount of registered capital of Dongguan Luxshare & Merry Electronics Co., Ltd. is RMB 200 million dollars, and the registered address is Tiesong Management District, Qingxi Town, Dongguan City, Guangdong Province, China. Our company will contribute capital, RMB 98 million dollars or equivalent US dollars , to acquire 49% share capital in Dongguan Luxshare & Merry Electronics Co., Ltd. Dongguan Luxshare & Merry Electronics Co., Ltd. is planned to have 3 directors and 1 supervisor, and our company will designate 1 director and 1 supervisor.

(next page)

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Key Information

• At 11 September 2017, the board resolutions of Merry Electronics Co., Ltd. adopted the following important matters:

– The expected benefits of investing: To consider the fast order growth of acoustic products, the production capacity of our plants in Shenzhen and plants in Huizhou is almost full. The plants of Dongguan Luxshare & Merry Electronics Co., Ltd., which are located in the approximately 120,000 square meters plant area of Dongguan Luxshare Precision Industry Co. Ltd., will have been constructed in season 1 of 2018 to go into production. It is planned to double our plants’ production capacity of acoustic products.

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http://www.merry.com.tw

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