MERRY — Call Transcript 2021

Mar 3, 2021

股票代號2439

Merry Electronics 2020 Forth Quarter Earnings Result Conference

Presented by: Allen Huang, CEO Date: Feb. 26, 2021

0

Safe Harbor Notice

Except for historical information contained herein, the matters set forth in this presentation are forward looking statements subject to significant risks and uncertainties that could cause actual results to differ materially, including the impact of competitive products and pricing strategies, whether the design is accepted by our customers timely, the prompt introduction of new technologies, the capability for mass production of new products, the risk of excess capacity, the availability of production capacity, the financial stability in terminal markets or other risks, and so on.

1

Consolidated Statements of Comprehensive Income

(audited)

(NT$ Thousand)

Item Q42019 Q32020 Q42020 QoQ YoY	Item Q42019 Q32020 Q42020 QoQ YoY	Item Q42019 Q32020 Q42020 QoQ YoY
Net Revenue 8,601,242 10,136,154	12,686,801	25.16% 47.50%
Gross Profit 11.43% 12.37%	11.88%	-0.49pp 0.45pp
Operating Expenses -703,864 -860,931	-994,444	15.51% 41.28%
Operating Margin 3.25% 3.88%	4.04%	0.16pp 0.79pp
Non-Operating Income 258,930 58,025	256,604	342.23% -0.90%
Net Income 466,849 391,995	587,994	50.00% 25.95%
Net Profit Margin 5.43% 3.87%	4.63%	0.76pp -0.80pp
EPS(NT$) 2.27 1.90 2.79 0.89 0.52

*. Diluted weighted average outstanding shares were 206,892K units in Q42020.

2

Q420 Proportion of Product Revenue

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Speaker
35%
Others 4%
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Proportion of the Product Revenue

Speaker QoQ : 75% YoY : -14% Headset QoQ : 6% YoY : 141%

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Proportion of the Product Revenue - Headset (%)

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(%)

Proportion of the Product Revenue - Speaker

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**Balance Sheets & Key Indices(CQ) **	**Balance Sheets & Key Indices(CQ) **	**Balance Sheets & Key Indices(CQ) **	**Balance Sheets & Key Indices(CQ) **	**Balance Sheets & Key Indices(CQ) **	**Balance Sheets & Key Indices(CQ) **	**Balance Sheets & Key Indices(CQ) **	**Balance Sheets & Key Indices(CQ) **
	20191231		20200930		20201231
(NT$ Thousand)	金額	%	金額	%	金額		%
Cash and Cash Equivalents 6,589,863 26% 4,191,857 13%						3,046,963 9%
Account Receivable 5,461,766 21% 9,008,137 29%						12,714,950 37%
Inventories 2,117,532 8% 4,160,838 13%						3,791,659 11%
Other Current Assets 924,316 4% 2,887,192 9%						2,625,977 8%
Investments 3,951,152 15% 4,104,327 13%						4,479,708 13%
Property, plant and equipment 2,285,093 9% 3,112,037 10%						3,694,738 11%
Other Non-current Assets 4,465,848 17% 3,858,545 12%						3,801,353 11%
Total Assets 25,795,570 100% 31,322,933 100%						34,155,348 100%
Current Liabilities 8,963,745 35% 15,966,811 51%						19,660,268 58%
Non-current Liabilities 3,833,433 15% 3,877,873 12%						2,224,337 7%
Total Liabilities 12,797,178 50% 19,844,684 63%						21,884,605 64%
Total Shareholders’ Equity 12,998,392 50% 11,478,249 37%						12,270,743 36%
Key Indices A/R Turnover (CQ) 70.6 63.5 77.9 Inventory Turnover Days (CQ) 30.2 34.9 32.4 Current Ratio (x) 1.7 1.3 1.1 ROE 22.24% 10.72%

7

Cash Flow

(新台幣仟元)	Q42019	Q32020
Beginning Balance 5,312,446 6,242,503
Cash from operating activities 3,580,459 -885,418
Capital Expenditures -320,814 -888,561
Short-term Loans -2,040,497 1,929,793
Long-term Loans 62,000 327,813
Issuance of common stock for cash 448,000 0
Non-controlling Interests - 0
Cash Dividends - -1,608,376
Investments and Others -451,731 -925,897
Ending Balance 6,589,863 4,191,857

*. Free cash flow = Cash from operating activities - Capital expenditures

8

Consolidated Statements of Comprehensive Income

項目 FY2019 FY2020 YoY	項目 FY2019 FY2020 YoY	項目 FY2019 FY2020 YoY
Net Revenue 36,397,793	34,444,819	-5.37%
Gross Profit 13.85%	12.54%	-1.31pp
OperatingExpenses 2,804,567	3,177,806	13.31%
Operating Margin 6.14%	3.31%	-2.83pp
Non-OperatingIncome 1,010,845	561,963	-44.41%
Net Income 2,531,146	1,319,400	-47.87%
Net Profit Margin 6.95%	3.83%	-3.12pp
EPS(NT$) 12.51	6.39	-$6.12
Cash from operatingactivities 4,247,731	-3,195,037	-175.22%
Capital Expenditures 607,310	1,584,900	160.97%
Free Cash Flow 3,640,421	-4,779,937	-231.30%
Cash Dividends 1,751,419	1,608,376	-8.17%
Cash & Marketable Securities 6,808,853	4,187,661	-38.50%
ROE 22.24% 10.72% -11.52pp

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2019 2020
Headset
Headset Speaker Speaker
57% 38% 62% 34%
Others 4%
Others 5%
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10

Recap of Recent Major Events

1. Cash Dividend : NT$5.16

2. The shareholder meeting will be held on Jun. 15.

3. Merry won the bronze award of Taiwan Corporate Sustainability Report Award in 2020.

11

Outlook for 1Q21

12

Q & A

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