MERRY — Investor Presentation 2015

Sep 7, 2015

Merry Electronics Introduction

Presented by : Andrew Yen Date :2015.09.01

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The information contained herein is the proprietary intellectual property of Merry Electronics and shall not be distributed, reproduced, or disclosed in whole or in part without prior written permission from Merry

Overview

Established since 1975

 Market Cap. : US$ 426 Million (as of Jun. 2015)

 Founders : Mr. Leo Liao / Mr. Jack Wei

• Service and Offering : Acoustic Component, Wired & Wireless Headphone,

• Headset ,and Battery Related Product

• Year 2014 Revenue : US$ 387 Million

 No. of Employee : 7,500 (as of Jun. 2015)

• Global Footprint : 11 presences

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The information contained herein is the proprietary intellectual property of Merry Electronics and shall not be distributed, reproduced, or disclosed in whole or in part without prior written permission from Merry

Global Presence

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Functions
HQ
RD
Sales
Mfg.
HQ
Taichung Hsinchu Taipei Thailand
USA Singapore
Taiwan
Shenzhen Huizhou Suzhou
Hong
Shanghai
China
Kong
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The information contained herein is the proprietary intellectual property of Merry Electronics and shall not be distributed, reproduced, or disclosed in whole or in part without prior written permission from Merry

Positioning of Merry

Vision

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Delivering Fidelity Sound to Enrich Human’s Life

Mission

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To be a World-class Electro-Acoustic Solution Provider

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The information contained herein is the proprietary intellectual property of Merry Electronics and shall not be distributed, reproduced, or disclosed in whole or in part without prior written permission from Merry

Key Milestones

• 2011 ~ 2015

• • Won the IF Design Award / G-Mark Design Award

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• Thailand factory 2005 & 2007 Awarded as one of the Best 200 Asia Pacific Enterprises by Forbes with Revenue under 1 Billion 2010 Huizhou factory 2002 & 2003 • Suzhou factory • Battery Product Line 2005 Acquired Huges Hi-Tech Inc. 1989 for RF technology Shenzhen and Bangkok factory 1998 Initial trading (IPO) on the OTC in Taiwan 1985 Taichung, Taiwan (Headquarter) 1975 Merry Electronics Founded

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The information contained herein is the proprietary intellectual property of Merry Electronics and shall not be distributed, reproduced, or disclosed in whole or in part without prior written permission from Merry

Product Evolution

2011 ~ 2014 Vast Advanced Products Offer

• •

• Wireless charging power bank Headset with OLED display/ NFC/ FM Radio

• •

• Ultra Dynamic Speaker for Wearable Device BT Portable Hi-Fi Speaker (NFC)

• •

• Hybrid Active Noise Cancelling Earphone Personal Sound Amplifier and

Hearing Protecting Earphone

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1986-2000 2001-2005 1975-1985 Speaker for NB Battery Pack Dynamic Receiver for Hands-free BT headset/ Car-Kit telephone Headset for mobile SMD Mic for Headset Micro SPK for Walkman phone Headphone Compact Receiver Dynamic Microphone for Radio Transceiver for mobile phone

1975-1985

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2006-2010

Power Bank BT PSS/Head Set Active Noise Cancelling Earphone

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The information contained herein is the proprietary intellectual property of Merry Electronics and shall not be distributed, reproduced, or disclosed in whole or in part without prior written permission from Merry

Leading Technology

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Gaming / Entertainment Mobile
Acoustic
CORE
COMPETENCE
Acoustic
PC / Portable RF
Medical / Healthcare
Battery
Software
Wireless System
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The information contained herein is the proprietary intellectual property of Merry Electronics and shall not be distributed, reproduced, or disclosed in whole or in part without prior written permission from Merry

Product Overview – Accessory

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BT Stereo BT Speaker/
Headset/
Portable Speaker
Wireless
System
Headset
Headset /
Speaker System
Headphone
USB Headset /
ANC Earphone/
Sound bar
Portable Hand-free
Headset/ ALD
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• *. ANC: Active Noise Cancelling ; ALD: Assistive Listening Device

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The information contained herein is the proprietary intellectual property of Merry Electronics and shall not be distributed, reproduced, or disclosed in whole or in part without prior written permission from Merry

Product Overview - Component

Providing Customized & Standardized Products

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MEMS MIC/
Speaker
Condenser MIC
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The information contained herein is the proprietary intellectual property of Merry Electronics and shall not be distributed, reproduced, or disclosed in whole or in part without prior written permission from Merry

Product Overview – Battery

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Power
Wireless
Charging Case
Universal
Battery
Power Pack
Pack
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The information contained herein is the proprietary intellectual property of Merry Electronics and shall not be distributed, reproduced, or disclosed in whole or in part without prior written permission from Merry

Consolidated Revenue

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Million NT$
12,316
14,000
11,258
12,000
10,000 7,843
7,690
8,000
6,000
4,000
2,000
-
2011 2012 2013 2014
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The information contained herein is the proprietary intellectual property of Merry Electronics and shall not be distributed, reproduced, or disclosed in whole or in part without prior written permission from Merry

Net Income

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Million NT$
1,244
1,400
1,031
1,200
1,000
800
482
600
315
400
200
-
2011 2012 2013 2014
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The information contained herein is the proprietary intellectual property of Merry Electronics and shall not be distributed, reproduced, or disclosed in whole or in part without prior written permission from Merry

Revenue by Product Category

Y2015 H1

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Others, 1%
Handsfree, 12%
Battery, 12%
Speaker, 27%
Entertainment,
48%
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The information contained herein is the proprietary intellectual property of Merry Electronics and shall not be distributed, reproduced, or disclosed in whole or in part without prior written permission from Merry

Social Responsibility

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Talent Cultivation

• Support the “Electro-Acoustic” graduate program and donate the Lab

• Found Merry Electro-acoustic Award

• IBM Engineers Week

Community Development Concern

• Sponsor "Taiwan’s March of Blessings" program with Classical Radio

• Fund charity concerts

• Volunteers for community service

Encouraging Reading and Sharing

• Found ‘’Philanthropic Library ‘’

• “Philanthropic Library“ Learning Symposium

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The information contained herein is the proprietary intellectual property of Merry Electronics and shall not be distributed, reproduced, or disclosed in whole or in part without prior written permission from Merry

Taking the Lead with Merry

Forty Years of Track Record in Acoustic Industry Forty Years of Track Record in Acoustic Industry

Breadth of Product Solution (in Acoustic , RF, Battery & Software)

One-Stop Full Service (from Component to System Product )

Vertical Manufacturing Integration

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The information contained herein is the proprietary intellectual property of Merry Electronics and shall not be distributed, reproduced, or disclosed in whole or in part without prior written permission from Merry

Financial Ratios

Unit：NTD/ Million

Item 2015H1 2014 2013 2012 2011 2010	Item 2015H1 2014 2013 2012 2011 2010	Item 2015H1 2014 2013 2012 2011 2010	Item 2015H1 2014 2013 2012 2011 2010	Item 2015H1 2014 2013 2012 2011 2010	Item 2015H1 2014 2013 2012 2011 2010
	2014	2013	2012	2011	2010
Cash and cash equivalents 2,599 Receivables Turnover Ratio(Days) 89.0	1,667 80.6	1,995 74.6	994 97.8	1,349 94.7	1,610 80.9
Payable Turnover Ratio(Days) 90.8	100.3	90.5	116.0	105.9	90.1
Days To Sell The Average Inventory 53.0	48.3	48.9	75.2	67.6	54.4
Operating Cycle 51.2	28.6	33.0	57.0	56.4	45.2
Book Value Per Share $28.43	$32.71	$30.33	$27.15	$27.55	$27.85
ROE **1.65% **	**21.83% **	**20.91% **	10.87%	**7.18% **	13.49%
ROA **0.89% **	**12.86% **	12.36%	6.43%	4.22%	8.43%
Capax 580	969	459	466	486	302
Depreciation 155	284	277	235	228	237

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The information contained herein is the proprietary intellectual property of Merry Electronics and shall not be distributed, reproduced, or disclosed in whole or in part without prior written permission from Merry

Consolidated profit comparison

Unit：NTD/ Million

Million NT$ 2015H1 2014 2013 2012 2011	Million NT$ 2015H1 2014 2013 2012 2011	Million NT$ 2015H1 2014 2013 2012 2011	Million NT$ 2015H1 2014 2013 2012 2011
	2013	2012	2011
Consolidated Revenue 5,319 12,316	11,258	7,690	7,843
Grossprofit 912 2,972	2,485	1,460	1,203
Operating income 160 1,439	1,308	434	234
Pre-taxprofit 118 1,559	1,276	587	362
Net income 93 1,244	1,031	481	315
Grossprofit % 17.15% 24.13%	22.07%	18.99%	15.35%
Operating income % 3.00% 11.68%	11.62%	5.64%	2.99%
Earnings per share(Dollar) NT$0.50 NT$6.72	NT$5.86	NT$2.90	NT$2.00

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The information contained herein is the proprietary intellectual property of Merry Electronics and shall not be distributed, reproduced, or disclosed in whole or in part without prior written permission from Merry

Thank you

The information contained herein is the proprietary intellectual property of Merry Electronics and shall not be distributed, reproduced, or disclosed in whole or in part without prior written permission from Merry

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