Qisda — Interim / Quarterly Report 2021

Jun 8, 2021

Qisda Corporation

Peter Chen Chairman and CEO of Qisda June 9, 2021

• 1. Qisda Group
• 2. Business Strategic Placement
• 3. 2021 Q1 Financial Results and Q2 Outlook
• 4. Q&A

Safe Harbor Notice

We have made forward-looking statements in the presentation. Our forward-looking statements contain information regarding, among other things, our financial conditions, future expansion plans and business strategies. We have based these forward-looking statements on our current expectations and projections about future events. Although we believe that these expectations and projections are reasonable, such forward-looking statements are inherently subject to risks, uncertainties, and assumptions about us.

We undertake no obligation to publicly update or revise any forward-looking statements whether as a result of new information, future events or otherwise. In light of these risks, uncertainties and assumptions, the forward-looking events might not occur and our actual results could differ materially from those anticipated in these forward-looking statements.

1. Qisda Group

Qisda Group

Qisda is a global technology group with businesses spanning information and communication, medical, smart business solutions, and 5G networking communication.

Established Year	1984	Global Presence	2020 Revenue
IPO Year (Code 2352)	1996	Manufacture Sites:Taiwan, China, Vietnam	NTD\$191.7B
Capital (NTD)	19.7B	Sales Offices:194 Locations Worldwide	(USD\$ 6.5B)
Consolidated Companies	180	R&D:Taiwan, China	Awards 2018 THOMSON REUTERS:
Listed Companies (Taiwan)	14	Revenue Breakdown by Geography (2020): Asia 46%	「TOP 100 GLOBAL TECH LEADER 」 Winning 「Best Companies to 2020
No. of Employees	33,000 (2020/12)	Americas 29% Europe 22% Others 3%	Work For in Asia」 2020Winning 「Taiwan Corporate Sustainability Awards (TCSA)」

Horizontal integration & vertical separation

Total Solution & Service Integration of system and technology

6

Qisda's Vision

High value-added business will account for

more than half of the revenue by 2022

Qisda's Winning Strategy

Current Business Optimization	Fast Expansion for Medical Businesses
ICT Products ( No. 2 in Monitor, No.1 in DLP Projector, Major Others )	Medical Service, Equipment & Consumables
Pillars 5G Network Business	Acceleration on
Strategic Placement Comprehensive broadband solutions	Solution Development Smart Solutions ( Hospital, Factory, Energy, Retail, Enterprise, Campus )

Winning Strategy: Organic + M&A

		Downstream	Midstream	Upstream
• Current Business Optimization	ICT	Brand (BenQ)	DMS (Qisda)	Industrial Motherboard (DFI)
			SD (Data Image) Surveillance (Topview)	Connector (Simula) Optics (YUDI)
• Fast Expansion for Medical Businesses	MEDICAL (Services, Equipment Consumables)	Services (BenQ Medical Center)	Equipment Consumables(Qisda) Intraoral Scanner/Dialysis/Dental
		(BenQ Biotech (Shanghai))
		Equipment Consumables Dialysate (powder)/Alcohol
		Hearing Aids (Best Sound) Dialysis (K2)
• Acceleration on	Smart Solutions	Smart Solutions (Qisda)		Industrial
Solution Development		SP/SI (Partner/LA FRESH/EASCHK/IDT)	VAR (Sysage/ACE/Corex)	Motherboard (DFI) Network (Alpha/Hitron/Aewin)
• 5G Network Business Strategic Placement		Brand/SI (Hitron/IDT)	DMS (Alpha/Aewin)

Transformation with Limited Resources

Q1 High value-added business account for 33% of total revenue

Revenue Breakdown by Business (Quarterly)

* ICT:includes monitor, projector, signage , TV and electronics products * Others:includes BenQ Materials Corp. and other products

* NCG:Networking and Communication * BSG:Business Solutions Group * Medical:includes medical service, medical equipment, medical consumable

Revenue of High value-added Business (Yearly)

• High value-added business is moving toward the goal of accounting for more than half of total revenue by 2022.

2. Business Strategic Placement

1. ICT (Information & Communication Technology)

• Gaming Solutions
• High-end Solutions
• General Solutions
• Industrial Solutions
• Data Projector
• Video Projector
• Short throw Projector
• Laser Pro-AV Projector
• Interactive Projector
• Automotive Wireless Module
• Automotive V2X Module
• Automotive mmWave Radar Module
• Automotive Display Module

Qisda Medical Fleet

Smart Medical Care involves

Smart Hospital、Smart Operating Room、Smart Dialysis Center BenQ Integrated Digital Solutions

2. MEDICAL Medical Industry Placement Covering Equipment, Solutions and Services

2. MEDICAL

Medical AIOT Total Solutions with ICT Tech.

2. MEDICAL

13 years of global marketing and local knowledge in developing channels for medical products

Qisda Smart Solution + 5G Network Fleet

No. 1 in Smart Retail in Taiwan and Singapore

Global Smart Solution Placement Complete 5G Tech for Enterprise

Over 40 Affiliates in the Grand Fleet

Smart Solutions spanning IT+CT+OT = Smart Retail, Enterprise, Factory, Hospital, Campus and Smart Energy

3. BSG (Business Solutions)

Domain knowledge across six major fields

3. BSG (Business Solutions)

4. NCG (Networking & Communication)

Product Portfolio: Ethernet switch, Mobile Broadband, Broadband network, 5G Enterprise network, Other networking products

3. 2021 Q1 Financial Results and Q2 Outlook

Please refer to Qisda's official website https://www.qisda.com.tw to find more information about Qisda 2021 Q1 Investor Conference

2021 Q1 Highlights

• ✓ Q1 revenue and profit increased significantly on YoY basis. EPS reached \$1.07 (+\$0.96), highest quarter result in13 years.
• Revenue increased by 30%, operating income increased by 66% and net income attributable to Qisda increased by 808%
• Highest Q1 revenue and operating income in 13 years: Due to Qisda's strategic investment in high value-added business and increasing demand in commercial and industrial applications for ICT products, even when Q1 is traditionally slower season
• Gross margin, operating income margin and net income margin increased on YoY basis: Gross margin was 14.7% (+1.3ppt), operating income margin was 3.4% (+0.8ppt), and net income margin was 5.1% (+4ppt)
• Non-operating income continued to make positive contribution.
• ✓ Revenue of high value-added business grew by 92% on YoY basis and accounted for 33% of Q1 revenue
• ✓ Qisda increased shares in Sysage to 51% from 35% on March 23
• ✓ Cash dividend for 2020 was NT\$ 1.5 per share, payout ratio was 59%

Consolidated Statement of Comprehensive Income (Quarterly)

Amount : NT\$ Million

	2021		2020 Q1		YoY		2020 Q4		QoQ
	Q1				g% amt				g%
Net Sales	50 904 100% ,	39 200 ,	100%	11 704 ,	30%	57 134 ,	100%	(6 231) ,	-11%
Cost of Goods Sold	(43 403) ,	(33 936) ,		(9 467) ,		(48 984) ,		581 5 ,
Gross Margin	501 7 14 ,	264 5 7% ,	13 4%	2 236 ,	42%	8 150 ,	14 3%	(650)	8% -
Operating Expenses	(5 783) 11 - ,	(4 228) 4% ,	10 8% -	(1 555) ,		(6 060) ,	10 6% -	277
Operating Income	1 718 3 ,	1 037 4% ,	2 6%	681	66%	2 091 ,	3 7%	(373)	-18%
Net Income non-operating	1 415 ,	(398)		1 813 ,		705		710
Profit(Loss) before Tax	3 133 6 ,	639 2%	1 6%	2 494 ,	390%	2 795 ,	4 9%	337	12%
Net Income	2 609 5 ,	392 1%	1 0%	2 217 ,	566%	2 284 ,	4 0%	325	14%
income attributable Qisda Net to	2 112 4 ,	233 1%	0 6%	879 1 ,	808%	761 1 ,	3 1%	350	20%
EPS (NT\$) (a)	\$1 07	\$0 12		\$0 96		\$0 90		\$0 18

²⁶ (a) EPS was calculated based on total weighted-averaged outstanding shares (1,967 m shares)

Consolidated Balance Sheet Highlights

Amount : NT\$ Million

	2021 03 31		2020 12 31		QoQ					YoY
					amt	g%	2020 03 31		amt	g%
Cash & Equivalent	23 629 ,	14%	22 540 ,	13%	088 1 ,	5%	13 914 ,	11%	9 715 ,	70%
Receivable Accounts	30 792 ,	18%	36 502 ,	21%	710 5 - ,	-16%	24 859 ,	19%	932 5 ,	24%
Inventory	35 897 ,	21%	35 139 ,	21%	758	2%	25 024 ,	19%	10 873 ,	43%
L T Investments -	16 677 ,	10%	16 308 ,	10%	368	2%	16 793 ,	13%	116 -	-1%
Total Assets	171 215 ,	100%	170 812 ,	100%	403	0%	131 667 ,	100%	39 548 ,	30%
Fin Debt *	47 733 ,	28%	44 568 ,	26%	3 164 ,	7%	39 811 ,	30%	7 922 ,	20%
Accounts Payable	36 914 ,	22%	40 526 ,	24%	3 613 - ,	9% -	25 241 ,	19%	672 11 ,	46%
Liabilities Toal	109 897 ,	64%	849 111 ,	65%	952 1 - ,	2% -	83 878 ,	64%	26 019 ,	31%
Equity	61 318 ,	36%	58 963 ,	35%	2 355 ,	4%	47 789 ,	36%	13 529 ,	28%
/ Share Net Worth	\$19 82		\$18 32		\$1 50		\$17 09		\$2 73

Nely Consolidated Subsidiaries YoY : Add Alpha, Simula, Golden Spirit

* Fin. Debt included long term and short term financial debts and lease obligations payable

Key Financial Ratios

	2021 03 31	2020 12 31	QoQ	2020 03 31	YoY
(Days) AR Turnover	6 0	6 5	5 -	6 5	5 -
AR Turnover (Days)	7 8	7 9	1 -	8 4	6 -
Inventory Turnover (Days)	7 5	7 0	+5	7 1	+4
AP Turnover (Days)	8 1	7 9	+2	7 5	+6
Cash Conversion Cycle (Days)	7 2	7 0	+2	8 0	8 -
ROE (annualized) (a)	4% 17	9% 11	+5 5 ppt	3 3%	+14 1 ppt
Current ratio	127%	124%	+3 ppt	121%	+6 ppt
Fin Debt / Total Assets (b)	28%	26%	+2 ppt	30%	2 ppt -

(a) Annualized net income / Average total equity

(b) Fin.debt included long term and short term financial debts and lease obligations payable.

2021 Q2 Outlook

✓ Business Driver

• Completed the public tender offer of Sysage to enhance the synergy to be a total solution service provider
• Alpha Networks Inc. became a subsidiary from August 2020 which fueled Qisda's revenue growth
• Medical business is expected to remain high growth rate
• Non-operating income continues to make positive contribution

✓ Cautious Measures to Global Economic

• The pandemic in Europe and India is still severe even with vaccination in many countries. The supply chain still face various uncertainties such as shortage in material, cargo capacity in the supply chain and material price hike.
• Cautiously optimistic in the profitability in Q2