Nishoku — Call Transcript 2014

Nov 20, 2014

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NISHOKU Technology INC.

2014 Third Quarter Earnings Conference

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November 2014

~Jackson~

Safe Harbor Statement

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Except for historical information contained herein, the matters set forth in this presentation may include predictions, estimates or other information that might be considered forward-looking that are subject to risks and uncertainties that could cause actual results to differ materially, including the impact of competitive products and pricing, timely design acceptance by our customers, timely introduction of new technologies, ability to ramp new products into volume, industry wide shifts in supply and demand for semiconductor products, industry overcapacity, availability of manufacturing capacity, financial stability in end markets, and other risks.

You are cautioned not to place undue reliance on these forward-looking statements, which reflect our opinions only as of the date of this presentation.

Please keep in mind that we disclaim any obligation to revise or publicly release the results of any revision to these forward-looking statements in light of new information or future events.

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Agenda

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Company Profile Sales & Marketing Competitive Advantage Financial Performance

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Company Profile

Company Profile Global Locations Historical Milestone Group Organization

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Company Profile

Established	1980 in Taipei, Taiwan
Chairman	B.F. Chen
G.M.	Jackson Tsai
Capital	NT$ 802,652,860
Employees(Group)	3,695;(2014/09/30)
Corporate HQ	XinzhuangDist.,New Taipei City, Taiwan
Global locations	Taiwan/ China / Vietnam
IPO Date	October 5, 2011
Product lines	Nishoku specializes in precision molding and plastic injection for various product components widely applied in Consumer-electronics, Computer, Communication and Automobile areas.

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Global Locations

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China-Kunshan

China-Shenzhen

Kunshan Nishoku Plastic
 Electronic Co., Ltd.

 Nishoku Plasticmold
(Shenzhen) Co., Ltd.

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Headquaters
Nishoku Technology Inc.

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Vietnam-Hanoi

Nishoku Technology
Vietnam Co., Ltd.

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Historical Milestone

• 1980

Established in 1980, starting to build up single injection mold & parts.

• 1991

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2011.10
2008
1991
2011.3
1998~2000
1980
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Starting to build up Double injection mold and parts.

• 1998~2000

Established Kunshan Factory in 1998.

Shenzhen Factory in 2000.

• 2008

Founded Nishoku Technology Vietnam Co., Ltd. in Vietnam.

In order to develop markets and meet group operation target, we acquire 100% shares of regional manufactories to build the facilities and expand the production scale in China.

• Mar. 2011

Inaugurating new Group Headquarters’ building with LEED regulation in Taiwan LEED (Leadership in Energy and Environmental Design)

• Oct.2011

Listed on the Taiwan Stock Exchange (TWSE) under ticker number 3679

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Group Organization

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Nishoku
Technology Inc.
Entity Function
100% 100% 100%
NISHOKU Nishoku
Sun Nice Ltd. Holding
BOUEKI CO., Technology
LTD. (Samoa) Vietnam Co., Ltd.
Purchasing
100% 100% 100%
Superior Golden Same Start Ltd. Sun Nice
Bright holding Ltd; (Anguilla) Ltd.(B.V.I.)
Trading
100%
100% 100% 100%
Shenzhen - KUNSHAN
Kunshan Nishoku Kunshan Nishoku NISHOKU
Manufacturing and Sales
Plastic Electronic Nishoku Mold Plasticmold ELECTRONIC
Co., Ltd Co., Ltd (Shenzhen) Co., TECHNOLOGY
Ltd. CO
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Implementing Merge

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Sales & Marketing

Company Profile Sales & Marketing Competitive Advantage Financial Performance

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Sales by Product

9 months Ended September 30, 2014 and 2013

	Product line	Application	Sample
	Consumer- Electronics 2013(51.72%) 2014(37.27%)	Wearable device、MP3/MP4、 Game set、Earphone、 Charger
	Computer 2013(15.07%) 2014(21.97%)	Mouse、NB/PC、Tablet
	Communication 2013(11.72%) 2014(10.11%)	GPS、mobile、telephone
	Auto 2013(5.16%) 2014(10.64%)	Automotive Interior components、center console
	Others 2013(8.93%) 2014(10.22%)	3D Glasses、Medical devices Distancemeter	、

， Excluding molding 2013(7.40%) 2014(9.79%)

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2014 Q3 Revenue by Application

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9 months Ended September 30, 2014 and 2013
Consumer Electronics
NT$ M
Others
10.22% 200,000 186,153
Molding 150,000
9.79% Consumer
108,893
Electronics
100,000
37.27%
Auto
component
10.64% 50,000
Communic
0
ation
FY2013 FY2014
10.11%
Computer
21.97%
•
Consumer Electronics YOY -41.50%
•
Computer YOY +18.38%
•
Communication YOY -29.90%
•
Auto component YOY +67.44%
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Competitive Advantage

Company Profile Sales & Marketing Competitive Advantage Financial Performance

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Competitive Advantage

 Total solution from mold development to mass production.

• •Providing the completely final reports for the mold development and molding injection.

• •In-Mold Forming. (IMF)

• •Double shot LSR.

• •Apparent Decoration (Painting, Printing, Plating).

• •Components assembles (Flash melting, ultrasonic).

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Molding
Apparent
Material Injection Decoration Assembling
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Shipping
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Competitive Advantage

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 Product diversification
Consumer-
Electronics
37.27%
Wearable device 、
MP3/MP4 、 Game
set 、 Earphone 、
Others Charger
、 Communication
3D Glasses
Medical devices 、 GPS 、 mobile 、
10.22%
Distance meter telephone
10.11%
Product
diversific-
ation
Computer
Molding
21.97% Mouse 、 NB/PC 、 9.79%
Tablet
Auto
Automotive Interior
components 、 center
console
10.64%
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Competitive Advantage

Leading scale of double injection machines

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NISHOKU develop the tooling by the advanced software including Auto CAD, MPI, MPA, Cimatron, UG, excellent Swiss +GF+ molding machine and also the completed inspection equipments (CNC machining center, wire electrical-discharge machine: WEDM, wire cutting machine, Optical Coordinate Measuring Machine: OMM, Coordinate Measuring Machine: CMM etc.,) to promise the product quality assurance and deliver smoothly to customers.

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Competitive Advantage

Flexable and regional manufacturing service

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China-Shenzhen

China-Kunshan

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Customers can be servered in Great
China Area and acquire the most time-
effective control
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Vietnam-Hanoi

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Founded in 2008
Duplicate China successful bussiness
model
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Financial Performance

Company Profile Sales & Marketing Competitive Advantage Financial Performance

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Financial Performance

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

Unit:NT$ million	2013 Q3	2013 Q4	2014 Q1	2014 Q2	2014 Q3
	AMT %	AMT %	AMT %	AMT %	AMT %
NET REVENUE	1,361100.0%	1,301100.0%	829100.0%	934100.0%	1,159100.0%
COSTS OF REVENUE	1,10281.0%	1,08283.2%	68182.1%	76581.9%	94281.3%
GROSS PROFIT	25919.0%	21916.8%	14817.9%	16918.1%	21718.7%
OPERATING EXPENSE	121 8.9%	112 8.6%	9611.5%	929.8%	998.5%
INCOME FROM OPERATIONS	13810.1%	107 8.2%	536.3%	778.3%	11810.2%
NON-OPERATING INCOME	(2)-0.2%	9 0.7%	323.9%	10.1%	110.9%
INCOME BEFORE INCOME TAX	13610.0%	116 8.9%	8510.2%	788.4%	10.1%
INCOME TAX EXPENSE	20 1.4%	27 2.0%	273.3%	202.2%	433.7%
NET INCOME	116 8.5%	90 6.9%	576.9%	586.2%	867.4%
Basic EPS	1.44	1.12	0.72	0.73	1.08

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Financial Performance

 Net Revenue by Quarter( FY2014)

Unit:NT$ million

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Financial Performance

 Gross profit-Amounts and Ratio by Quarter( FY2014)

Unit:NT$ million

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19.0% 20.0%
18.7%
17.9% 18.1%
16.8%
250 13.8%
13.2%
10.0%
162 140 259 219 148 169 217
100 0.0%
2013 Q1 2013 Q2 2013 Q3 2013 Q4 2014 Q1 2014 Q2 2014 Q3
Gross profit from operations Gross Profit%
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Financial Performance

 Income From Operations-Amounts and Ratio by Quarter( FY2014)

Unit:NT$ million

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Financial Performance

 Net Income-Amounts and Ratio by Quarter( FY2014)

Unit:NT$ million

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Financial Performance

 Quarterly Earning per share

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Unit:NT$
4.00
+ 0.15 NT$
2.53
2.38
1.44
1.12 1.08
0.72 0.73
0.48 0.46
0.00
2013 Q1 2013 Q2 2013 Q3 2013 Q4 2014 Q1 2014 Q2 2014 Q3 FY2013 FY2013
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The amount of earnings per each outstanding share of a company's stock

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Financial Performance

 Net Revenue vs. Basic EPS by Quarter( FY2014)

Unit:NT$ million

Unit:NT$

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Financial Performance

 Book Value Per Share by Quarter ( FY2014)

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Unit:NT$
Avg. 56
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Q&A

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Contact Information ： TEL ： +886-2-2998-3578 Email ： ir@nishoku.com.tw

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