PARPRO — Interim / Quarterly Report 2022

Nov 29, 2022

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Partners in Production and Design

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免責聲明

PARPRO 的簡報包含具有重大風險和不確定性的前瞻性聲明。前瞻性陳述通常與未來 的事件或未來的財務或經營業績有關。在這種情況下 , 您可以識別前瞻性語句 , 因為它們 “ ” “ ” “ ” “ ” “ ” “ ” “ ” 、 、 、 、 、 、 、 包含諸如 可能 ” 之類的單詞 , “ 將會 應該 預期 計畫 預測 可能 打算 “ ” “ ” “ ” “ ” “ ” “ ” “ ” 、 、 、 、 、 、 目標 專案 盤算 相信 估計 預估 潛在 或 “ 繼續 ”, 或這些詞或其他類 似的術語或這些意思相反或負面的詞 , 涵蓋我們的期望 , 策略 , 計畫或意圖。 由於一些重要因素造成的風險和不確定性 , 實際結果可能與前瞻性聲明中所包含的內容 有重大差異。這些因素包括但不限於 : 我們競爭激烈的環境 ; 我們業務的週期性性質 ; 我們 。 . 開發新產品的能力 ; 以及我們在新業務發展中的成功執行等等

本簡報中的所有前瞻性聲明都是根據截至目前可獲取資訊為基礎的 , 我們不承擔任何義 務更新這些前瞻性聲明 , 及更新未來的事件 , 同樣的 , 我們也不承擔任何義務更新實際結 果可能與前瞻性聲明中預期的內容有重大差異的原因 , 即使將來我們取得新的資訊 .

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AGENDA

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FINANCIALS

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PARPRO Income Statement (3Q,2022)

~~NT$k~~ Revenue Gross Profit OperatingProfit Non-operating profit Pre tax Profit Net Profit ~~Pfibili~~	~~1Q~3Q22~~ ~~1Q~3Q21~~ ~~YoY~~ 1,827,304 1,644,526 11.11%	~~1Q~3Q22~~ ~~1Q~3Q21~~ ~~YoY~~ 1,827,304 1,644,526 11.11%	~~1Q~3Q22~~ ~~1Q~3Q21~~ ~~YoY~~ 1,827,304 1,644,526 11.11%
	251,404	240,651	4.47%
	1,103	(34,645)	103.18%
	45,884	132,737	-65.43%
	46,987	98,092	-52.10%
	41,967 96,408 -56.47%
~~rotaty~~ Gross Margin OperatingMargin Pretax Margin Net Margin	13.76% 14.63%
	0.06%	-2.11%
	2.57%	5.96%
	2.30%	5.86%

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PARPRO Balance Sheet Overview

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NT$k 2020 2021 2022Q3
TOTAL CURRENT ASSETS 1,602,851 1,526,637 2,150,156
TOTAL ASSETS 3,038,600 3,001,970 3,726,458
TOTAL LIABILITIES 1,829,672 1,788,928 2,264,263
SHAREHOLDERS'EQUITY 1,208,928 1,213,042 1,462,195
TOTAL LIABILITIES AND EQUITY 3,038,600 3,001,970 3,726,458
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PARPRO Dividend Payout History

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Per shar
Year/Item Ex-divided date Base Date Pay Date Shreholder meeting EPS
Stock dividend Cash dividend
2021 0 0.5 2022/8/17 2022/8/23 2022/8/31 2022/5/31 1.29
2020 0 0.5 2021/8/12 2021/8/20 2021/8/27 2021/7/20 -1.78
2019 0 2 2020/7/2 2020/7/10 2020/7/3 2020/5/28 4.02
2018 0 2.47 2019/7/4 2019/7/10 2019/8/7 2019/5/31 3.03
2017 0 0.99 2018/8/16 2018/8/22 2018/9/7 2018/5/30 1.06
2016 1 1 2017/7/3 2017/7/9 2017/8/4 2017/5/26 2.01
2015 0 0.5 2016/6/27 2016/7/3 2016/7/21 2016/5/27 -0.39
2014 0 1.5 2015/7/3 2015/7/11 2015/7/29 2015/6/3 0.16
2013 0 2 2014/6/19 2014/6/25 2014/7/9 2014/5/30 2.51
2012 14 3 2013/5/29 2013/6/4 2013/7/10 2013/4/18 7.54
2011 0.5 5 2012/8/2 2012/8/10 2021/8/24 2012/5/30 12.44
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COMPANY UPDATES

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AT A GLANCE

NTD2.10 bn 700+ Group Revenue-2021 4916:TW Employees NTD1.83 bn Worldwide Group Revenue-22Q3 Taiwan (HQ) 2001 California (2) Aerospace Founded Defense Nevada Gaming Mexico Medical 2013 Industrial US Headquarters Santa IPO Ana, CA

A full-service embedded design & manufacturing company with emphasis on EMS & ODM Solutions.

In business since 2001, PARPRO was IPO in 2013 with a New Global Strategy, specializing in contract manufacturing, and the design and manufacturing of processor based embedded solutions to serve OEMs in a variety of vertical markets.

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Quality Aerospace Medical Military
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Aerospace
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Aerospace Military
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Medical – expected certification for PARPRO Mexico Location – Q1 2023

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LOCATIONS

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PARPRO MEXICO TIJUANA, MEXICO

PARPRO TECHNOLOGIES SANTA ANA, CA

PARPRO NEVADA HENDERSON, NV Sheet Metal Fabrication Metal Prototyping Integration & Test Integration & Assembly

Cable & Wire Harness Assembly PCB Assembly Machining & Sheet Metal Fabrication Integration / Assembly

PCB Assembly Integration / Box Build

Organizational Cross-functions - Global Supply Chain • Finance • IT • HR • Sales & Marketing

PARPRO TAIWAN TAIPEI, TAIWAN Global Headquarters Asian Sourcing Office

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MAJOR MILESTONES

• PARPRO is established ODM Company with a solid Strategy/Structure and strong vertical focus on Aerospace & Defense, Gaming, Medical, Communications and Industrial applications.

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of acquiring and growing complementary businesses.acquiring and growing complementary businesses. complementary businesses.
COVID
Bounce Back
is well perceived by key customers, with organic
Record
Revenue
Year Organic
Established Growth /
ODM Acquisitions?
2020
Company
Year of
New Global Organic Growth Pandemic
Strategy
4 Acquisitions
Mexico, Nevada, California (2)
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• Track record of acquiring and growing complementary businesses.acquiring and growing complementary businesses. complementary businesses.

• Strategy is well perceived by key customers, with organic growth and profitability expansion in 2021/2022.

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Kicking off 2023
with record
high-backlog
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2023F

2012

2017

2019

2022

COMPETITIVE DIFFERENTIATORS

The PARPRO Difference

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Flexible EMS – North Global Certifications Business American & Supply Chain Model Maquiladora Expertise of all or one – services Making our manufacturing offering Low-cost country or regional supply tailored to suit customer competitive at virtually any volume chain with North America based requirements and any sourcing strategy engineering and global integration, production, distribution and fulfillment

PARPRO is very strong in these areas at the same time as pandemic and supply chain issues has weakened competition

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MARKET REQUIREMENTS/OUR FOCUS MARKETS

Common Across Target Markets

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Quality, Reliability
Highly Regulated Parietal
Lobe & Reputation Parietal
Highly regulated (FAA, FDA, Gaming
Lobe
Commissions, Federal Government, Quality and reliability
ITAR) - Expensive to enter, very important
certifications required.
North American Process
Parietal
Manufacturing Control
Parietal
Lobe
North American Lobe
Process/revision control
Manufacturing location
paramount
required in many cases.
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OUR SPECIALITIES

Markets We Serve

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COMMUNCIATIONS/
AEROSPACE/DEFENS GAMING/INFOTAINME MEDICAL INDUSTRIAL/OTHER
DATA STORAGE
E NT
Cable/Wire Harnesses Gaming Boards PCB Assembly Data Center Switch, Industrial Automation
Electromechanical Gaming Kiosks/Slot Embedded Medical Appliances Smart Devices
Assemblies Machines/Cabinets Platforms & Systems Storage Array Controllers Transportation Systems
Chassis/Enclosures Player Tracking Deep Packet Inspection, EV Systems
Integration Vending Machines Load Balancing
Control Systems Interactive/Self-serve Kiosks
LOW VOLUME, HIGHER MIX
MID VOLUME, MID MIX
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HIGHER COMPLEXITY

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APPLICATIONS / CORE COMPETENCIES

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NETWORKING
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MEDICAL DEVICES
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MISSION CRITICAL SYSTEMS

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GAMING & INFOTAINMENT
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SELF-SERVE KIOSKS
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COMMUNICATION

STRATEGY & OPPORTUNITY

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WORLDWIDE EMS/CONTRACT MANUFACTURING

PARPRO TARGETING >10-20% GROWTH 2023 and beyond Via Niche/ Value Markets (Regulated Markets)

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SOURCE: Maximized Market Research

WORLDWIDE EMS/CONTRACT MANUFACTURING

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ODM/EMS revenue growth 2016-2021; Source: New Venture Research

TRENDS BY MARKET SECTOR

Outlook

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GAMING/
KIOSK
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Gaming industry continues to thrive. The Nevada Gaming fiscal year ended in June with a yearly gambling revenue total of $14.6 billion. This is a state record for a fiscal year and 37% higher than 2019 – pre pandemic. The previous record was 2007 when a total of $12.7 billion was reported.

• Player Tracking

• Mobile Gaming

• Surveillance

• Intelligent Vending Machines

• Self-Serve Kiosks  Cloud Infrastruture

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MEDICAL
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Even with the threat of a recession, the Medtech industry is healthy and continues to invest in itself. R&D spending is well above the past-decade average, new FDA approvals offer promise of more innovation, and there’s an opportunity for supply chains to be reinvented.

• Increasing investment in diagnostic technology & software

• Digital Healthcare / Home Health

• Patient Diagnosis Imaging / Clinical Care

• Digital patient records, remote healthcare, patient flow

• Rural Healthcare – Emerging markets

• Minimally invasive robotic surgery (MIRS)

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AEROSPACE/
DEFENSE
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Despite setbacks and operational challenges brought on by the pandemic and ongoing turbulence in global economics, the industry remains very optimistic with expected annual earning growth of 12% over the next 5 years.

• Connectivity

• Trust & Security

• Unmanned Vehicles & Robotics

• Product Longevity – long term availability

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INDUSTRIAL/
COMMUNICATION
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COVID-19 drove a shift to remote work and an increase in mobile data, voice traffic, and residential broadband. The industry is investing in technologies and several new trends are shaping up to stay connected.

• Content Delivery Networks

• Internet of Things/Big Data

• HA Cloud Data Centers

• SDN/NFV – Cable & Telecom providvers, ISVs, Cloud, and CDN Service Providers

• New support and remote equipment access services

POST PANDEMIC DEVELOPMENTS

Positive Outlook for 2023

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DEFENSE GAMING AEROSPACE Very strong growth – Many competitors Industry is still in post PARPRO acquired new gone, and PARPRO pandemic recovery, long-term, multigaining market share. however PARPRO has million dollar Gaming industry is strong foothold and customer in 2021. thriving reporting continues to support record high revenue key customers. in 2022.

MEDICAL OVERALL New strong designs PARPRO kicking off in Medical. PARPRO 2023 with record-high Mexico expected to backlog. be ISO13485 certified Significant interest in Q1 2023. uptick in PARPRO’s Mexico facility.

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GROWTH INITIATIVES

Expansion of current customer relationships

• Tier 1 gaming customer continues to drive constant new product launches

New-End Markets (Gaming and Self-Service Kiosks)

• Further expansion into growing end-markets with new and existing customers

• New customer relationships for kiosk-specific PCBA and complete assembly work

Vertical Integration: Expansion of capabilities

• PARPRO has expanded its sheet metal bending and fabrication – Nevada / Mexico

• PCBA / SMT Expansion – California & Mexico

• Testing capabilities – California

Nearshore facility expansion – PARPRO Mexico

• PCBA / SMT Expansion

• Mexico is now seen as a preferred low-cost alternative to China (flexibility and logistic costs)

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GROWTH INITIATIVES

Our Gaming, Infotainment and Kiosk Specialties

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GAMING BOARDS/
EMBEDDED SYSTEMS
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SLOT PLAYER TRACKING/ INTERACTIVE/ VENDING
MACHINES/CABINETS GAMING KIOSKS GAMING CONROLLER SELF-SERVE KIOSKS MACHINES
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PARPRO MEXICO – A STRATEGIC MOVE

MANUFACTURING IN MEXICO

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PARPRO MEXICO

Specializing in

• PCB ASSEMBLY

• CABLE & WIRE HARNESSES

• SHEET METAL AND MACHINING

• ELECTRO-MECHANICAL ASSEMBLIES

600 EMPLOYEES

135,000

SQUARE FEET BUILDING

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Strong IP Protections Based On US and International Standards

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Mexico is less expensive overall

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Mexico’s proximity to the USA / Freight Costs

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BENEFITS OF MANUFACTURING IN MEXICO

Favorable Industrial Real Estate Rates

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Mexico is a ProBusiness Environment

Mexico is now ranked first for lowest business costs according to the annual KPMG Competitive Alternatives

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BENEFITS OF MANUFACTURING IN MEXICO

Wage Comparison – Mexico vs. China

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PARPRO – A COMPELLING OPPORTUNITY

MARCO-FACTORS

INDUSTRY TRENDS

COMPANY FACTORS

• Outsourced manufacturing will continue to • Innovation • Reputation and leadership

• be a widely used business strategy for U.S. • Increased demand for contract • Deep integration with clients’ planning

• based company manufacturing services • Growing design and support services

• • • Strong North American economy Value-added service partners • Loyal clients poised for growth

• Forecast for GDP and job growth • Higher quality products

• Technological advancement in electronics • Enhanced capabilities

• Advanced capabilities

• End-market diversification

• Proliferation of electronics products in daily • Flexible manufacturing interactions

• Seasoned management team

• Growth in revenue and earnings

• • Onshore or nearshore manufacturing options

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Compelling Investment Opportunity

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THANK YOU | Q & A