PT TECH. — Interim / Quarterly Report 2018

Nov 26, 2018

柏 騰 科 技 S ince 1995

Paragon Technologies Investor Conference [Symbol ： 3518] November 27,2018

==> picture [720 x 167] intentionally omitted <==

Paragon Technologies Co., Ltd.

Limiting responsibility

 This presentation contains “forward-looking statements”- that is, statements related to future, not past, events. In this context, forward-looking statements often address our expected future business and financial performance, and often contain words such as “expects” , “anticipates”, “intends”, “plans”, “believes”, “seeks”, or “will”.

 Forward-looking statements involve inherent risks and uncertainties. We caution you that a number of important factors could cause actual results to different materially from those contained in any forward-looking statement. 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.

==> picture [720 x 11] intentionally omitted <==

==> picture [720 x 39] intentionally omitted <==

----- Start of picture text -----

Page 2
----- End of picture text -----

Agenda

Company Overview Financial Information

Market & Applications Future Strategies

==> picture [720 x 11] intentionally omitted <==

==> picture [720 x 39] intentionally omitted <==

----- Start of picture text -----

Page 3
----- End of picture text -----

==> picture [720 x 168] intentionally omitted <==

Company Overview

==> picture [720 x 11] intentionally omitted <==

==> picture [720 x 39] intentionally omitted <==

----- Start of picture text -----

Page 4
----- End of picture text -----

Paragon Technologies [Symbol ： 3518]

 Eatablishment ： 1995.10.20

 Capital ： NTD 807 Million

 Employees ： 1,000 Employees (RD: 50)

 Chairman ： Mr. Eagle,Chen

 General manager ： Mr. Longer ,Wang

 Main of products ：

==> picture [405 x 184] intentionally omitted <==

A. EMI – 88% B. AP – 12%

==> picture [720 x 11] intentionally omitted <==

==> picture [720 x 39] intentionally omitted <==

----- Start of picture text -----

Page 5
----- End of picture text -----

Historical Milestones

1995 Founded in Taiwan as one the world leading companies to develop and provide PVD coating services for commercial and industrial applications. 2005 Became World largest Electro-Magnetic interference (EMI) PVD shielding provider. 2007 Public listed in Taipei Exchange. Automotive Products Business Unit founded in Zhejiang Province, China. 2008 Introduced proprietary SP3 PVD process for After Market. 2010 Became ISO/TS 16949 certified manufacturer. 2012 Recognized by major after market brands in North America, Japan and approved by Nissan Autech and Luxgen. (Harley Davidsn) 2014 Approved by Ford US. 2016 Introduced state-of-the-art, proprietary Metal Shading Technololgy, MST.

==> picture [720 x 11] intentionally omitted <==

==> picture [720 x 39] intentionally omitted <==

----- Start of picture text -----

Page 6
----- End of picture text -----

Paragon Facilities

Paragon Taiwan HQ & RD Center Established: 1995 year 806 million (NTD) Number of employees: 1,000

Electro Magnetic Interference

-Suzhou Factory - Nanjing Factory

-Sichuan Factory - Chongqing Factory

World NB brand, plastic enclosure EMI supplier leader 60% of market share, about 200 million pieces/year

Wheel Division

• Zhejiang Anji - Sunshine Factory, Kangshan Factory

Capacity: 100,000 wheels per month Deliveries: More than 5 million

==> picture [720 x 11] intentionally omitted <==

==> picture [720 x 39] intentionally omitted <==

----- Start of picture text -----

Page 7
----- End of picture text -----

==> picture [720 x 168] intentionally omitted <==

Financial Information

==> picture [720 x 11] intentionally omitted <==

==> picture [720 x 39] intentionally omitted <==

----- Start of picture text -----

Page 8
----- End of picture text -----

2018~Q3 Consolidated I/S

Unit in NT$ Million

	2018.Q3	2018.Q3	2017	2017	2016	2016	2015	2015
Sales Revenue	446	100%	664	100%	842	100%	1,182	100%
Gross Profit	(5)	-1%	32	4%	141	17%	273	23%
Operating Expense	210	47%	226	34%	424	51%	432	36%
Operating Net Loss	(216)	-48%	(194)	-30%	(282)	-34%	(158)	-13%
Net Loss For The Year	(250)	-56%	(243)	-37%	(416)	-49%	(169)	-14%
EPS	(3.16)		(3.09)		(5.09)		(1.98)

==> picture [720 x 11] intentionally omitted <==

==> picture [720 x 39] intentionally omitted <==

----- Start of picture text -----

Page 9
----- End of picture text -----

Operating Information

Sales Revenue & Gross Profit

Product Mix from 2015 to 2018Q3

==> picture [720 x 11] intentionally omitted <==

==> picture [720 x 39] intentionally omitted <==

----- Start of picture text -----

Page 10
----- End of picture text -----

Q3 18’ Consolidated B/S

		2018.9.30	%	2017.12.31	%	2017.9.30	%
	Cash&Market Securities	899	38%	964	38%	911	35%
	Accounts Receivable	298	13%	326	13%	334	13%
	Inventory	9	0%	14	1%	17	1%
	Other Current Assets	39	2%	65	3%	78	3%
	Total Current Assets	1,245	53%	1,369	54%	1,340	52%
	Fixed Assets	717	30%	874	34%	897	35%
	Other Non Current Assets	385	17%	314	12%	335	13%
	Total Assets	2,347	100%	2,557	100%	2,572	100%
	Short-Term Debt	396	17%	293	11%	280	11%
	Non Current Liabilities	188	8%	210	9%	194	8%
	Total Current Liabilities	584	25%	503	20%	474	18%
	Other Non Current Liabilities	25	1%	27	1%	30	1%
	Total Liabilities	609	26%	530	21%	504	20%
	Total Owners’Equity	1,738	74%	2,027	79%	2,068	80%
	Debt Ratio	25.94%		20.73%		19.61%
	Net Worth Per Share	21.52		25.10		25.62
	Page11

Q3 18’ Financial Structure

==> picture [252 x 172] intentionally omitted <==

----- Start of picture text -----

Cash&Market
Securities
AR
Fixed Assets
----- End of picture text -----

項 目	2017年	2016年	2015年	2014年	2013年
Debt Ratio	20.7	18.9	18	21.2	21.7
Current Ratio	271.9	315.3	350.9	290.9	293.5
Cash flow Ratio	10.4	25.2	40.7	13.2	20.8
Dividend Pay-out	0	0.51	1.04	2	1

==> picture [720 x 11] intentionally omitted <==

==> picture [720 x 39] intentionally omitted <==

----- Start of picture text -----

Page 12
----- End of picture text -----

Q3 18’ Consolidated Cash Flow

		2018Q3	2017Q3	YOY
	Consolidated income before income tax	(219)	(142)	54%
	Adjustment	(190)	(174)	9%
	Cash flows from operating activities	(29)	32	-191%
	Cash flows from investing activities	(325)	(162)	101%
	Cash flows from financing activities	100	(77)	-230%
	Effect of foregin exchange rate change	(7)	(13)	-46%
	Increase in cash and cash equivalnets	(261)	(220)	19%
	Cash and cash equivalnets at beginning of the year	518	690	-25%
	Cash and cash equivalnets at end of the	257	470	-45%
	Page13

==> picture [720 x 168] intentionally omitted <==

Market & Applications

==> picture [720 x 11] intentionally omitted <==

==> picture [720 x 39] intentionally omitted <==

----- Start of picture text -----

Page 14
----- End of picture text -----

Achievement-EMI in NB Market, 2017

Shipment by customer-ODM Shipment by customer-OBM

==> picture [440 x 369] intentionally omitted <==

==> picture [720 x 39] intentionally omitted <==

----- Start of picture text -----

Page 15
----- End of picture text -----

Achievement- Auto Market

• The first company applied continuous PVD service to the surface treatment of wheel.

• The only company became certified manufacturer of auto market in China.

• Cumulative shipments of OES is about 5,000,000 in North America.

==> picture [132 x 44] intentionally omitted <==

2008 – 2013 2017~ Bright SP3 PVD I Bright SP3 PVD II MST • Harley Davidson • FORD F-150 • Soueast • Luxgen SUV OES DX3 MST • • Ford Fusion OES BRP Can-Am • Nissan Serena Spyder Rider OES 2014 – 2016

==> picture [720 x 11] intentionally omitted <==

==> picture [720 x 39] intentionally omitted <==

----- Start of picture text -----

Page 16
----- End of picture text -----

==> picture [127 x 102] intentionally omitted <==

Proprietary SP3 PVD Process

==> picture [254 x 273] intentionally omitted <==

5 Cleaning 6 Powder Priming In-line Vacuum 7 Sputtering 8 Clear Coat

==> picture [272 x 132] intentionally omitted <==

==> picture [720 x 39] intentionally omitted <==

----- Start of picture text -----

Page 17
----- End of picture text -----

Advantages-PVD Finish

• Eco-friendly – Low risk of environment and decrees

• Metallized appearance– rich texture by combining color and diverse metallized effects

• Multi-technique appearances – Spray coating / Dyeing / electro-plating / Anodizing

• Highly flexibility of design – not limited to types and material of substrate

• The competitive advantage of cost

==> picture [720 x 11] intentionally omitted <==

==> picture [720 x 39] intentionally omitted <==

----- Start of picture text -----

Page 18
----- End of picture text -----

==> picture [720 x 168] intentionally omitted <==

Strategies for future

==> picture [196 x 57] intentionally omitted <==

專業 價值 創新

The way we operate

 New application in existing market

 Continuously accumulating the capability of technology

• Sustainable development

 Why NB and Auto market ?

==> picture [684 x 300] intentionally omitted <==

----- Start of picture text -----

Eco-friendly
Continuously issue
demand
To substitute non-
NB Market
Market of mature eco-friendly
Auto Market
and big scale process
Diversification
Flexibility
Diversify of
product style
Page 20
----- End of picture text -----

Strategies for future

Innovation Strategic alliance Strengthening of & & Product & Market uniqueness Profit sharing

==> picture [113 x 52] intentionally omitted <==

• 3C products

 OE. OES. AM of Wheels  Appearance coating  Functional coating

==> picture [720 x 11] intentionally omitted <==

==> picture [720 x 39] intentionally omitted <==

----- Start of picture text -----

Page 21
----- End of picture text -----

Opportunities

Appearance of products influence the decision of In highly consumer Relaxation of competitive & purchasing decrees – AM homogenized of auto market market, product in China differentiation is significant. Strict “Unique” restrictions of hit trends of VOC and personalization, wastewater Opportunities technology disposal in and sport. China

PVD Technology of Paragon is unique and uncopiable. Particular coating + multi-layer metal Shading + Optical coating

==> picture [720 x 11] intentionally omitted <==

==> picture [720 x 39] intentionally omitted <==

----- Start of picture text -----

Page 22
----- End of picture text -----

TRUE PARTNER FOR A BRIGHTER FUTURE

==> picture [519 x 50] intentionally omitted <==

Paragon Technologies Co., Ltd. WWW.PTTECH.COM.TW

==> picture [720 x 11] intentionally omitted <==

==> picture [720 x 39] intentionally omitted <==

----- Start of picture text -----

Page 23
----- End of picture text -----