Patec — Investor Presentation 2019

Nov 19, 2019

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PATEC PRECISION INDUSTRY CO., LTD.

（STOCK CODE：2236.TW）

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Safe Harbor Notice

 PATEC’s statements of its current are expectations forward-looking statements subject to significant risks and uncertainties and actual results differ from may materially those contained in the forward-looking statements。

 Except as required by law, we undertake no obligation to update any forward-looking statement, whether as a result of new information, future events, or otherwise.

 The company makes no representations or warranties, express or implied, and does not rely on the correctness, impartiality or completeness of the information presented or contained in this data. This data does not constitute an invitation to issue securities.

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Agenda

 [Company Profile]

Business Performance   Dividend Policy Sales Contents 

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

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

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Company Profile

 Basic Info

Established Reg, Capital Employee 26th Sep., 1992 NTD 411 M 1020

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 Patec Precision can one provide stop shop to all press facilities. From tooling design, develop, feeding machine, robot transfer for customizing. We can also provide fine blanking and deep drawing machine.

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Company Profile 

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

Company Profile

 Forging Synergies

(Fine blanking、Cold Forging、Deep Drawing、Cold Forming)

 Continuous Tooling

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http://www.mobile01.com/newsdetail.php?id=18442

Business Performance



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Consolidated Operating Revenue/Margin
Earnings Per Share
ROE/ROA
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Consolidated Income Statement
Cash Flow Statement
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Business Performance
-Consolidated Operating Revenue/Margin 
In NTD Thousand
Revenue Margin
Profit After Income Tax
2,500,000 30.00%
180,000
2,191,727
2,073,289 29.00%
2,009,440 160,000
27.78%
2,000,000
28.00% 140,000
120,000
26.62% 27.00%
1,500,000
1,353,991
100,000
26.00%
25.04% 80,000
879,860
1,000,000
25.00%
60,000
24.00% 40,000
433,816
500,000
24.71%
20,000
23.00%
0
0 22.00%
2016 2017 2018 2019Q1 2019Q2 2019Q3
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Business Performance

-Earnings Per Share
PATEC GROUP EPS
4.50
3.27
2.60
2.95
2.25
1.37
1.12
0.00
2015年 2016年 2017年 2018年 2019年Q3
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Business Performance

-ROE/ROA
Return on Equity Return on Assets
25.00%
8.56% 7.83%
20.00%
7.58%
15.00%
12.57%
11.98% 12.01%
4.17%
10.00% 4.10%
6.26% 6.05%
5.00%
0.00%
2015年 2016年 2017年 2018年 2019年Q3
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Business Performance
-Consolidated Income Statement (Per Annum) 
In NTD Thousand
2014 2015 2016 2017 2018
Amount % Amount % Amount % Amount % Amount %
Operating
1,655,756 100 1,539,487 100 2,009,440 100 2,073,289 100 2,191,727 100
Revenue
Operating Costs [(1,155,854] (70) (1,147,366) (75) (1,425,168) (71) (1,461,181) (71) (1,582,969) (72)
)
Operating
499,902 30 392,121 25 584,272 29 612,108 29 608,758 28
Margin
Operating
(308,421) (18) (283,287) (18) (327,522) (16) (380,229) (18) (389,374) (18)
Expenses
Operating Profit 191,481 12 108,834 7 256,750 13 231,879 11 219,384 10
Non-operating
13,583 1 31,919 2 16,003 1 12,317 1 11,816 1
Income
Non-operating
(46,768) (3) (15,179) (1) (37,827) (2) (14,450) (1) (7,615) (1)
expenses
Non-operating
158,296 10 125,574 8 234,926 12 229,746 11 223,585 10
expenses
Income
(33,252) (2) (47,507) (3) (72,091) (4) (69,831) (3) (59,499) (3)
Tax Expense
Profit For The
125,044 8 78,067 5 162,835 8 159,915 8 164,086 7
Year
(NCI) (23,035) 1 (17,372) 1 (47,904) 2 (29,668) 1 (19,745) 1
CI 102,009 7 60,695 4 114,931 6 130,247 7 144,341 7
EPS(in Dollars) 2.31 1.37 2.60 2.95 3.27
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Business Performance
-Consolidated Income Statement (Per Quarter)
In NTD Thousand []
2018Q3 2018Q4 2019Q1 2019Q2 2019Q3
Amount % Amount % Amount % Amount % Amount %
Operating Revenue 456,365 100 554,884 100 433,816 100 446,044 100 474,131 100
Operating Costs (349,021) (76) (370,165) (67) (326,633) (76) (332,906) (75) (333,974) (71)
Operating Margin 107,344 24 184,719 33 107,183 24 113,138 25 140,157 29
Operating Expenses (91,470) (20) (105,627) (19) (83,375) (19) (95,908) (21) (70,940) (15)
Sales (19,909) (4) (24,593) (4) (17,160) (4) (27,269) (6) (16,427) (4)
Admin (53,856) (12) (58,,735) (11) (58,050) (13) (44,437) (10) (44,086) (9)
R&D (17,705) (4) (21,947) (4) (6,714) (2) (24,532) (5) (10,232) (2)
Impairment loss determined in
0 0 (352) 0 (1,451) 0 330 0 (195) 0
accordance with IFRS 9
Operating Profit 15,874 4 79,092 14 23,808 5 17,230 4 69,217 14
Non-operating Income 3,690 1 11,054 2 3,850 1 3,163 1 7,512 2
Non-operating expenses (3,387) (1) 285 0 (12,157) (3) (3,381) (1) (3,335) (1)
Profit Before Tax 16,177 4 90,431 16 15,501 3 17,012 4 73,394 15
Income
(3,832) (1) (23,407) (4) (10,173) (2) (8,948) (2) (25,134) (5)
Tax Expense
Profit For The Year 12,345 3 67,024 12 5,328 1 8,064 2 48,260 10
(NCI) (2,496) (1) (9,345) (2) (3,744) 1 (1,339) 0 (7,043) (1)
CI 9,849 2 57.679 10 1,584 0 6,725 6 41,217 9
EPS(in Dollars) 0.20 1.31 0.03 0.15 0.93 12
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Business Performance
-Cash Flow Statement 
In NTD Thousand
2014 2015 2016 2017 2018
Amount Amount Amount Amount Amount
Profit Before
158,296 125,574 234,926 229,746 223,585
Income Tax
D & A 57,602 54,501 55,951 58,968 59,945
Income Tax Paid
(41,667) (45,971) (71,667) (64,218) (70,700)
Net cash provided by
19,937 165,341 116,864 119,819 33,855
operating activities
CAPEX (115,120) (17,166) (61,116) (36,398) (40,920)
Net cash (used in) provided by
(193,304) 51,665 (122,412) (16,654) 4,117
investing activities
Net cash (used in) provided by
69,517 (31,324) 125,950 38,818 (144,943)
financing activities
Increase (Decrease) in cash (65,765) 143,991 61,412 83,980 (129,121)
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Business Performance
-Financial Ratios 
2014 2015 2016 2017 2018
Operating Margin
30.19% 25.47% 29.08% 29.52% 27.78%
Ratio
Operating Profit Ratio 11.56% 7.07% 12.78% 11.18% 10.01%
Profitability
Earnings Before Tax
9.56% 8.16% 11.69% 11.08% 10.20%
Margin
Net Profit Margin 7.55% 5.07% 8.10% 7.71% 7.49%
Current Ratio 198.22% 277.57% 332.51% 190.61% 223.19%
Quick Ratio 143.39% 201.43% 247.10% 135.91% 145.67%
Solvency
Debt Ratio 38.65% 27.93% 35.05% 44.51% 37.33%
Times Interest Earned
8.31 9.27 23.07 21.99 18.66
Ratio
Account Receivable 2.87 2.55 3.30 3.08 3.12
Turnover (Times) 127days 143days 111days 119days 117days
Operating Inventory Turnover 3.74 3.47 4.00 3.24 3.05
Ability (Times) 96days 104days 90days 113days 120days
Account Payable 4.51 4.72 6.67 5.96 6.26
Turnover (Times) 80days 76days 54days 61days 58days
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
Dividend Policy
Appropriation Of Earnings
Distribution Year Cash Dividends Stock Dividends
2019 0.10244247 0.92198329
2018 0.76268847 0.76268855
2017 1.96331235 0
2016 0.39696420 0.99241051
2015 1.33169478 0
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Sales Contents



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Sales Contents
Major Products
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Major Customers
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Sales Contents – Products Items 
100%
8%
8%
13% 14% 12%
17%
8% 6%
5% 5% 5%
80% 5%
60%
40% 84% 86% 82% 81% 83%
78%
20%
0%
2016 2017 2018 2019Q1 2019Q2 2019Q3
4 Wheels 2 Wheels Machine and Others
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Future Plan



 Press Machine

Capacity 100~200 200~1000 300~600 (tone) Work Energy 50~200 50 ~ 100 35~70 (spm) Slide Dimension 1300700、1600900 1100600 ~ 21001100 30001100、30001300 (mm) Total Deflection 0.5、0.7 0.7 ~ 1.4 1.5 (mm)

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Sales Contents – Major Products 

 2 Wheels

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Brake

Shock

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Starters

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Sales Contents – Major Products 

• Automobile safety parts

• The product life cycle of automobile safety parts is 6~8 years.

• These need 100% full-inspection, require 0 ppm, and have difficulties of technology and production.

• Patec will continue to research new technology/production, and develop components of Continuously Variable Transmission (CVT) Engine

• ,gearbox, etc.

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Engine
Brake
Wiper Linkage
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Exhaust
Door Lock/Seat/Chassis
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

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Company Profile



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 85%Revenue from Automobile parts Benefit from MQB platform Market Growth, MQB, Emission Standards Numerous Tier 1 vendor code

Automobile

• China keep growing; Europe recover

• EURO 6 ；National Stage V, VI

 MQB Reduce development costs, reduce maintenance and inventory costs VW, AUDI, SKODA, SEAT share about 60% auto parts

Tier 1

 MQB platform increase volume

• Decrease Core supplier

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
Sales Contents – Major Customers
 Major Customers
 Top 3 Faurecia(top8)、Inteva(top71)、Akebono(top98) all are global
automobile suppliers
 Patec is also a qualified supplier of Benteler(top 24), Bosch (top 1), Mitsuba(top
70), Hitachi(top 26), Valeo(top 11), and Nissin(top 100).
100%
90%
34.2%
80% 40.1%
44.57% 43.3% 42.70%
49.75%
70%
3.27%
60% 4.03%
3.51%
1.07%5.32% 5.74% 3.98% 5% 5.19%
50% 2.35% 3% 3.19%
4.51%
16.35% 14.90% 7.54% 2.84% 11% 11.36%
40% 4.76%
11.61% 4% 2.96%
30%
9.63%
20%
33.69% 37.86% 36.80% 33% 34.60%
10% 21.66%
0%
2016 2017 2018 2019Q1 2019Q2 2019Q3
Faurecia Inteva Akebono
Eberspaecher Benteler Others
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
Sales Contents – Major Customers
 Patec 50% revenue comes from VW
 According China Securities research
FORD、GREATWALL 、JEELY and Guangzhou big jump
next production cycle : VW SUV
 2017~2019 VW China will release 10 new SUVs
 2018 the new models and replacement models great grow
together
 New automobiles are using MQB platform, the parts sale
to MQB will grow
Million
VW Group vehicle sales situation
1,200 1,074 1,083
1,031
973 993
1,000 907
816
714
800
630 629 655
600
400 398 418 421
368 355
327
282
200 192 225
140
102
-
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
Global Sales China Sales
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Medical Instrument

 Comparison of existing storage methods after cleaning and disinfection of existing surgical instruments

Textile fabric

Surgical sterilization
boxes

Nonwoven fabric



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Medical Instrument



• Medical sterile container market size and business opportunities

•

Mainland China currently has about 31,700 hospitals, according to National Health
Commission of the People’s Republic of China, statistical data as at December 10[th],
2017, Grade III hospitals (1151) and Grade II hospitals (4321).
Under the promotion of Chinese government policies, Grade III hospitals will give
priority to use medical sterile containers.

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•

Taiwan currently has 26 medical centers and

84 regional hospitals are also the first to
adopt medical sterile containers.

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To learn more about PATEC Please visit www.patec-intl.com