PARPRO — Investor Presentation 2018

Aug 21, 2018

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Partners in Production and Design

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PARPRO Investor Relations Johnny Liao, Chairman Thomas Sparrvik, CEO Ellen Tseng, Strategic Investment August 2018

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Agenda
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PARPRO Overview Our Credentials The Market Opportunity Our Strategic Plan Financials

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2 | August 2018

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Safe Harbor
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Disclaimer

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• PARPRO’s presentation contains forward-looking statements subject to significant risks and uncertainties. Forward-looking statements generally relate to future events or our future financial or operating performance. In this context, you can identify forward-looking statements because they contain words such as "may," "will," "should," "expects," "plans," "anticipates," "could," "intends," "target," "projects," "contemplates," "believes," "estimates," "predicts," "potential" or "continue" or the negative of these words or other similar terms or expressions that concern our expectations, strategy, plans or intentions.

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• Actual results may differ materially from those contained in the forward-looking statements due to risk and uncertainties resulting from a number of important factors. Such factors include, but are not limited to: our highly competitive environment; the cyclical nature of our business; our ability to develop new products; and our successful execution in new business developments, and etc.

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• All forward-looking statements in this presentation are based on information available to us as of the date hereof, we undertake no obligation to update these forward-looking statements for new information, future events, otherwise, or update the reasons why actual results could differ materially from those anticipated in the forward-looking statements, even if new information becomes available in the future.

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3 | August 2018

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Introducing PARPRO
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At A Glance

• Taiwan (HQ) • California (2)

• Nevada • Mexico

4916:TW Market Cap – US Headquarters – NT$2.840B Santa Ana, CA

Employees 700+ Founded Worldwide 2001 Reborn Aerospace/Defense Communications 2012 Gaming Medical Industrial Group Revenue Transportation NT$5.57bn+ (2017)

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Partners in Production and Design

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

In business since 2001, PARPRO was reborn in 2012 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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Aerospace Medical Defense Aerospace

Quality Aerospace

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4 | August 2018

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Company History
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Major Milestones

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PARPRO is now an 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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Track record of acquiring and growing complementary businesses.

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Strategy is very well perceived by key customers, with strong Organic Growth in 2018.

Continued Organic Growth/Acquisition ?? Organic Growth/ ReStrong Profits Acquisition Organization Cal Quality PARPRO Acquisition (PTI) Acquisition JumpGen, CA 2019 Reborn EMT West (PTI-DC) New Global IPO Offering (PNV) 2018 Strategy Taiwan Stock Exchange (TW:4916) 2017 Year Acquisition 2016 AP PARPRO, Mexico Founded (PMX) 2014 Previously known as Pilot Electronics Corp 2013 (PTW) 2013 2012 2001

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PARPRO Locations
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PARPRO, INC.

Organization cross-functions Global Supply Chain • Finance • IT • HR • Marketing

PARPRO Technologies (PTI) (Santa Ana, CA)

• Custom PCB Assembly

• System Builds

• Assembly

PARPRO Technologies Design Center (PTI-DC) (San Diego, CA)

• Engineering Design Center

• Embedded Hardware / Systems

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• 700+ employees worldwide with US headquarters in Santa Ana, CA

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PARPRO UK
Sales
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PARPRO Taiwan (PTW)

• SMT

• Integration

• Asian Supply Chain

PARPRO Mexico (PMX)

• Cable & Harness Assembly

• Integration

• Metal Works

• • Assembly

PARPRO Nevada (PNV)

• Sheet Metal Fabrication

• Integration & Test

• Powder Coating/Lamination

• • Assembly

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Strong & Experienced Management Team
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Executive Management

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Johnny Liao Chairman

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• PARPRO Founder

• Anderson Chairman

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Thomas Sparrvik Chief Executive Officer

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• 25+ Years as International Senior Executive

• CEO, Kontron – 12 Years

• • M.Sc.E.E., MBA

• Retired Army Captain

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Eduardo Serrano CFO Americas / PARPRO Mexico

• 20+ Years Corporate Finance Executive

• KPMG, Sony, J.I. Case, International Rectifier

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Ellen Tseng VP, Strategic Investment

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• 20+ Years experience at leading global investment banks and technology companies

• Morgan Stanley, Nomura, Intel, Philips.

Business Units Leaders & Management

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Keith Knight PARPRO Technologies, CA

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• 20 Years Exec. Manufacturing Operations Experience

• Emulex, Sanmina

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Rich Ramonis PARPRO Nevada

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• 25+ Years Operations, Supply Chain, Purchasing Executive

• Bally, Arrow Electronics

Jorge Richardson Electrical (PMX)

• 25 Years Senior Mgt. in Aerospace Industry

• • Lean Manufacturing & Quality Systems Expert

Mike Orozco Metals (PMX/PNV)

• 25+ Years in Sheet Metal and Contract Manufacturing Operations/Mgt.

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Robert Bezy PARPRO Taiwan

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• 20 Years Exec. International Manufacturing Operations Experience

• Jabil, Kontron

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Ken Haney Global Sales & Marketing

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• 20 Years Executive Sales Mgt.

• • Developed/managed $1.5B Sales Division

• Kontron, Sanmina

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Business Model - Benefits
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Utilization of our In-House Design and MFG Centers

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Time Savings through internal coordination (Design, Prototype, Production, etc.…) Reduced Lead-times through schedule visualization and understanding Cost optimization by minimizing margin stacks throughout the value chain

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Embedded
Systems
Cable
House
Metal Reduce
House 4-5 vendors
to 1
Contract
Manufacturer
Integrator
Integrator
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8 | August 2018

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Business Model – ODM Services
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Design, Engineering & Manufacturing

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Manufacturing product from inception-design, engineering, programming, tooling, testing and logistics

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PARPRO can engage at any point in the product life.

Program Management

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TOOLING
FIRST ARTICLE
MANUFACTURING SETUP
ELECTRONIC
ENGINEERING
INDUSTRIAL
PCB PRODUCTION
DESIGN &
SYSTEM
MECHANICAL PCBA ASSEMBLY
ARCHITECTURE
ENGINEERING
CABLE ASSEMBLY
PLASTIC/ METAL HOUSING
FULL SYSTEM INTEGRATION
DESIGN COMMERCIALIZE MANUFACTURE FULFILL SUSTAIN SERVICE
PCB DESIGN LOGISTICS
CERTIFICATIONS PROCUREMENTS
PROTOTYPING & DVT QUALITY CONTROL
PRODUCTION TESTING ORDER FULFILLMENT & INVENTORY CONTROL RMA/ Service
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Competitive Differentiators
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The PARPRO Difference

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FLEXIBLE US BASED EMS GLOBAL SUPPLY CERTIFICATIONS/
EXPERTISE OF ALL OR ONE
BUSINESS MODEL ENGINEERING USA / ASIA CHAIN STANDARDS - ODM Solution Provider
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Flexible Business Model

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Expertise of all or one - services tailored to suit customers requirements.

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US Based Engineering

US-based and 100% owned Engineering & Design / Integrated Mixed Technologies

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EMS – North American & Asian

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Making our manufacturing offering competitive at virtually any volume and any sourcing strategy

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Global Supply Chain

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Low cost country or regional supply chain with North America based engineering and global integration, production, distribution and fulfillment

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Certifications

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Quality Aerospace
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Medical
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Military

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Aerospace
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Aerospace
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95% of PARPRO and its Customers are Inside the “Trump Wall” and will not be affected by newly imposed Tariffs and ‘Political Climate’!

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Market Requirements/Focus Market
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Common across target markets

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Highly Regulated Parietal
Lobe
Highly regulated (FAA, FDA, Gaming
Commissions, Federal Government,
ITAR) - Expensive to enter,
certifications required.
Parietal
North American Manufacturing
Lobe
North American Manufacturing
location required in many cases.
Quality & Reliability
Quality and reliability very important
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Parietal Engineering Support Lobe Engineering support for design and manufacturing, with US based engineering being very important in many cases.

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Parietal Process Control LobeProcess/revision control paramount

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Target Customer Profile
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PARPRO is uniquely equipped to meet the challenges of our customers

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Technical Products
Require high reliability,
flexibility and service
Focused on long-term relationships
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High-mix and/or mid
to high volume
requirements
Promote outsourcing
and partnership
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13 | August 2018

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Our Specialties
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Manufacturing

Engineering

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AEROSPACE/ GAMING/ MEDICAL COMMUNCIATIONS/ INDUSTRIAL/ EMBEDDED
DATA STORAGE
DEFENSE INFORTAINMENT OTHER DESIGN &
ENGINEERING
• Cable/Wire Harnesses • Gaming Boards/ • PCB Assembly • Data Center Switch, • Industrial Automation • System Design
• Electromechanical Embedded Solutions • Embedded Medical Appliances • Smart Devices • Schematic Capture
Assemblies • Gaming Kiosks/Slot Platforms & Systems • Storage Array • Transportation and PCB Design
• Chassis/Enclosures Machines/Cabinets Controllers Systems • Mechanical Design
• Integration • Player Tracking • Deep Packet • EV Systems • Firmware Design
• Control Systems • Vending Machines Inspection, Load Balancing
• Interactive/Self-serve
Kiosks
LOW VOLUME, HIGHER MIX MID VOLUME, MID MIX
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HIGHER COMPLEXITY

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Applications
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PARPRO Core Competencies

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Medical
Flight
Devices
Control
Networking
Mission Critical
Systems
Gaming &
Infotainment
Telecom &
Secure Data Center
Communications
Vehicle Tracking
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Diversification
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Industry Diversification & Cross-selling via Acquisitions

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via Acquisitions
Industrial/Other,
24
2016
Industrial, 20
Defense, 60
Medical, 16
Industrial, 2014Communications,
30 40
Medical, 10 Industrial, 5 2012 Gaming, 50 2013 Industrial, 50
Defense/
2011 Aerospace, Aerospace, 40
70 Time
Gaming, 85
Pilot Electronics (TW) PARPRO Mexico (MX) PARPRO Nevada (USA) PARPRO Design Center (USA) PARPRO Technologies (USA)
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PARPRO Nevada (USA)

PARPRO Mexico (MX)

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PARPRO Design Center (USA)
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PARPRO Technologies (USA)
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Pilot Electronics (TW)

Contract Manufacturing

Contract Manufacturing

Founded PARPRO Inc - 2012

• SMT - Cable & Harness - Sheet Metal Fabrication

• • Assembly Assembly - Integration - Asian Supply Chain - Integration - Assembly - Metal Works - Assembly

Design & Engineering

• Embedded Hardware

• • Embedded Systems

Electronic Manufacturing Services

• Custom PCB Assembly

• • System Builds - Assembly

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Diversification
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Industry Diversification & Cross-selling Via Acquisitions

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Via Acquisitions
Industrial/Other,
24
Medical, 16 2016
Industrial, 10
Defense, 60
Gaming, 34 Medical, 16
Industrial, Communications/ 2014
30 Gaming, 36Industrial, 12 Today Communications, 40
2013
Medical, 10 Industrial, 5 2012 Industrial, Aerospace, 40Defense/
50
2011 Aerospace,
70
Gaming, 85
Aerospace/Defense, 38
Pilot Electronics (TW) PARPRO Mexico (MX) PARPRO Nevada (USA) PARPRO Design Center (USA) PARPRO Technologies (USA)
Founded PARPRO Inc - 2012 Contract Manufacturing Contract Manufacturing Design & Engineering Electronic Manufacturing
- SMT - Cable & Harness - Sheet Metal Fabrication - Embedded Hardware Services
- Assembly Assembly - Integration - Embedded Systems - Custom PCB Assembly
- Asian Supply Chain - Integration - Assembly - System Builds
- Metal Works - Assembly
- Assembly
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18 | August 2018

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Investment Highlights
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Experienced Management Team (M&A Experience)

Well Known Incumbent into Large, Growing and Attractive Markets Strong Relationships with Diverse Client Base

Comprehensive Breadth of Capabilities and Services Significant Growth Opportunities

Attractive Cash Flow Growth Outlook

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Growth Opportunities
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Favorable Trends in Our Core Markets

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Aerospace & Defense

• Connectivity

• Trust & Security

• Unmanned Vehicles & Robotics

• Product Longevity – long term availability

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 Communications

• Content Delivery Networks

• Internet of Things/Big Data

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

• HA Cloud Data Centers

• New support and remote equipment access services

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Gaming

• Player Tracking: Player experience – game to player

• Mobile Gaming

• Cloud Infrastructure: online gaming, big data management, video surveillance

• Intelligent Vending Machines: remove inventory management, customer focus and target marketing

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Medical

• Increasing investment in diagnostic technology & software

• Digital Healthcare

• Patient Diagnosis Imaging / Clinical Care

• Digital Hospital: digital patient records, remote healthcare, patient flow

• Home Health

• Rural Healthcare – Emerging markets

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Industrial/Transportation

• Control – Inform – Interact

• Electric vehicles

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Market Growth - Global Commercial Aircraft
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 PARPRO currently provides mechanical control assemblies for large cabin solutions company.

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Boeing Commercial Aviation Market Forecast 2015-2034 infographic

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Next 12-24 Months
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Mexico – facility expansion Tijuana is Mexico’s Manufacturing Capital

Expecting Robust Growth Rate (Organic Growth) Expand footprint/customer base in rest of USA & Europe Cross pollination of customers and horizontal selling

Continue to evaluate M&As Integration & Synergy of Functions

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New Facility – PARPRO Mexico
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Coming Q3, 2018

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Background
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New PMX Facility - 2018

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New facility – 130,000+ square feet

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New Location benefits

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• Location favorable to current and prospective employees

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• Expansion possibilities

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• Low lease rate

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Will utilize new facility also as an Integration center to PTI in Santa Ana

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Target is to save $2+ Million dollar starting fiscal year 2019

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We have good order visibility in 2018.

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27 | August 18
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Market Growth - Mexico
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Manufacturing in Mexico

Aerospace & Defense

• Mexico’s aerospace industry is 6[th] largest supplier to US, China, Singapore, Taiwan and South Korea.

• Tijuana global manufacturing hub - over 50 years in aerospace activities .

• PARPRO MEXICO already has a strong foothold

Electronics

• Mexico currently the 2[nd] largest supplier of electronics to USA after China.

• Core Competency for PARPRO and area for expansion

Medical Device

• BAJA California is largest concentration of Medical Device Manufacturing in NA.

• 92.5% of all medical devices manufacturing in Tijuana exported to USA.

• Core Competency for PARPRO

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

28 | August 2018

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Mexico Expansion - 2018
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Wage Comparison Mexico to China

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Financial Performance
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Highly Diverse Vertical Split & Geographical Presence

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Taiwan, 18
By Location
Mexico, 17
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USA, 65
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Medical, 16
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By market Communications/ Industrial, 12

Aerospace/Defense, 38

Gaming, 34

• % based on 2017 Production Split

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90-95% of all customers are in NA, with some in Europe

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31 | August 2018

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PARPRO Consolidated Results (2Q, 2018)
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						*Measurement
						Period Adjustment
NT$mn	2Q18	1Q18	2Q17	QoQ	YoY	2Q17
Revenue	2,230	2,074	1,025	8%	118%	1,025
GrossProfit	560	470	199	19%	182%	199
OperatingProfit	125	76	43	65%	194%	43
Non-operating profit	17	-2	46	NM	-63%	97
Pretaxprofit	143	74	89	93%	61%	139
NetProfitAfter Tax(beforeminority)	116	61	67	90%	73%	117
Minoritiesinterest	34	20	21	69%	64%	21
Net profit	82	41	46	101%	77%	96

Profitability
Gross Margin	25.1%	22.7%	19.4%	19.4%
Operating Margin	5.6%	3.6%	4.2%	4.2%
Pretax Margin	6.4%	3.6%	8.7%	13.6%
Net Margin	3.7%	2.0%	4.5%	9.4%

Note: Audited financial result, this consolidated Anderson(1528.TW)

*Measurement Period adjustment 2Q17 restated 2Q17 reported audited financial, major difference was due to “gain from bargain purchase” that was originally booked in 4Q17.

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32 | August 2018

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PARPRO Results (2Q, 2018)
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NT$mn	2Q18		1Q18		2Q17		QoQ	YoY
Revenue		920		813		646	13%	42%
GrossProfit		178		149		127	20%	40%
OperatingProfit		79		59		27	35%	198%
Pre tax Profit		95		56		69	69%	38%
Net profit		82		41		46	101%	77%

Profitability
GrossMargin	19.3%	18.3%	19.7%
OperatingMargin	8.6%	7.3%	4.1%
Pretax Margin	10.3%	6.9%	10.7%
Net Margin	8.9%	5.0%	7.2%

Note: This is PARPRO only (not audited financial version)

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33 | August 2018

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PARPRO Revenue/Operating Profit
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2018 First Half - YOY

Sales (NT$m)

Operating Profit (NT$m)

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1H2018
2017
2016
2015
- 500 1,000 1,500 2,000 2,500 3,000
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1H2018
2017
2016
2015
(50) - 50 100 150 200
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1H2018 Sales growth (YoY)

1H2018 Operating Profit growth (YoY)

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+31%

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+132%

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*Note: PARPRO alone, exclude Anderson

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34 | August 18

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：
PARPRO Margin overview
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PARPRO: Gross Margin is stabilizing

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30.0%
25.0%
20.0%
15.0%
10.0%
5.0%
0.0%
2013 2014 2015 2016 2017 1Q2018 2Q2018
Gross Margin Gross margin(exclude Anderson)
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PARPRO: EBIT margin is reviving strongly

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12.0%
10.0%
8.0%
6.0%
4.0%
2.0%
0.0%
2013 2014 2015 2016 2017 1Q2018 2Q2018
-2.0%
EBIT Margin EBIT margin(exclude Anderson)
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35 | June 13, 2018

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PARPRO: Net Profit &EPS
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PARPRO: Net Profit & EPS

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200 2.50
2.00
150
1.50
100
1.00
50
0.50
0
0.00
2013 2014 2015 2016 2017 1H2018
(50) (0.50)
Net profit(NT$m) Adjusted EPS(NT$)
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PARPRO: Pretax/Net margin trend

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12.0%
10.0%
8.0%
6.0%
4.0%
2.0%
0.0%
2013 2014 2015 2016 2017 1Q2018 2Q2018
-2.0%
-4.0%
Pretax Margin Net Margin Pretax Margin(exclude Anderson) Net Margin(exclude Anderson)
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36 | August 18

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PARPRO: Balance Sheet Overview
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Balance Sheet(NT$m)	2016	2017(consolidated Anderson)	1H2018(Consolidated Anderson)
TOTAL CURRENT ASSETS	1,377	5,613	6,267
TOTAL ASSETS	2,671	8,409	9,104
TOTAL LIABILITIES	1,477	4,873	5,434
SHAREHOLDERS' EQUITY	1,193	3,536	3,671
TOTAL LIABILITIESAND EQUITY	2,671	8,409	9,104

Note: Audited financial results, this consolidated Anderson (1528.TW) result

Balance Sheet(NT$m) 2016 2017( exclude Anderson) 1H2018(exclude Anderson) TOTAL CURRENT ASSETS 1,377 1,384 1,825 TOTAL ASSETS 2,671 2,722 3,165 TOTAL LIABILITIES 1,477 1,514 1,833 SHAREHOLDERS' EQUITY 1,193 1,208 1,332 TOTAL LIABILITIESAND EQUITY 2,671 2,722 3,165	2016	2017( exclude Anderson)	1H2018(exclude Anderson)
	1,377	1,384	1,825
	2,671	2,722	3,165
	1,477	1,514	1,833
	1,193	1,208	1,332
	2,671	2,722	3,165

Note: This is PARPRO only (not audited version)

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37 | August 2018

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PARPRO Dividend Payout History
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Year/Item	Per share	Per share	Ex-divided date	Base Date	Pay Date	Shareholder meeting	EPS
	Stock dividend	Cash dividend
2017	0	0.98909225	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	2014/06/25	2014/07/09	2014/5/30	2.51
2012	14	3	2013/5/29	2013/06/04	2013/07/10	2013/4/18	7.54
2011	0.5	5	2012/8/2	2012/08/10	2012/08/24	2012/5/30	12.44

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38 | August 2018

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Thank You – Q&A
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PARPRO TEAMWORK

The strength of the team is in each individual member… the strength of each member is in the team.

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