Qisda — Interim / Quarterly Report 2021

May 13, 2021

May 13, 2021 Qisda Corporation Investor Conference: 2021 Q1 Results

Participants

Chairman Peter Chen CFO Jasmin Hung GM, Information Technology Business Group Commercial and Industrial Business GM, Medical Devices Business Group Harry Yang GM, Business Solutions Group Michael Lee GM, Networking and Communication Business Group April Huang CIO Michael Wang Joe Huang

Agenda

• 1. 2021 Q1 Financial Results CFO Jasmin Hung 2. Business Update and Outlook Chairman Peter Chen 3. Summary of Business Groups GMs of Business Group 4. Event 5. Q&A
• • Changing the Accounting Treatment on Shareholding of AUO

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. 2021 Q1 Financial Results

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Qisda Group

Qisda Group smart business solutions, and 5G networking communication.		Qisda is a global technology group with businesses spanning information and communication, medical,
Established Year IPO Year (Code 2352)	1984 1996 19.7B	Global Presence Manufacture Sites:Taiwan, China, Vietnam Sales Offices:194 Locations Worldwide	2020 Revenue NTD\$191.7B (USD\$ 6.5B)
Capital (NTD) Consolidated Companies	180	R&D:Taiwan, China	Awards 2018 THOMSON REUTERS:
Listed Companies (Taiwan) No. of Employees	14 33,000 (2020/12)	Revenue Breakdown by Geography (2020): Asia 46% Americas 29% Europe 22% Others 3%	「TOP 100 GLOBAL TECH LEADER 」 2020 Winning 「Best Companies to Work For in Asia」 2020 Winning 「Taiwan Corporate Sustainability Awards (TCSA)」

• 2021 Q1 Highlights Q1 revenue and profit increased significantly on YoY basis. EPS reached \$1.07 (+\$0.96), highest quarter result in13 years. (+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 increased by 30%, operating income increased by 66% and net income attributable to Qisda increased by 808% Cash dividend for 2020 was NT\$ 1.5 per share, payout ratio was 59%
• 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%
• 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

Consolidated Statement of Comprehensive Income (Quarterly)

Amount : NT\$ Million

Consolidated Statement of Comprehensive Income (Quarterly)
Amount : NT\$ Million
	2021 Q1		2020 Q1		YoY		2020 Q4		QoQ
					amt 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)		5,581
Gross Margin	7,501	14.7%	5,264	13.4%	2,236	42%	8,150	14.3%	(650)	-8%
Operating Expenses	(5,783)	-11.4%	(4,228)	-10.8%	(1,555)		(6,060)	-10.6%	277
Operating Income	1,718	3.4%	1,037	2.6%	681	66%	2,091	3.7%	(373)	-18%
Net non-operating Income	1,415		(398)		1,813		705		710
Profit(Loss) before Tax	3,133	6.2%	639	1.6%	2,494	390%	2,795	4.9%	337	12%
Net Income	2,609	5.1%	392	1.0%	2,217	566%	2,284	4.0%	325	14%
Net income attributable to Qisda	2,112	4.1%	233	0.6%	1,879	808%	1,761	3.1%	350	20%
EPS (NT\$) (a)	\$1.07		\$0.12		\$0.96		\$0.90		\$0.18

Consolidated Balance Sheet Highlights

Amount : NT\$ Million

QoQ YoY 2021.03.31 2020.12.31 2020.03.31 amt g% amt g% Cash & Equivalent 23,629 22,540 1,088 13,914 9,715 14% 13% 5% 11% 70% Accounts Receivable 30,792 36,502 -5,710 24,859 5,932 18% 21% -16% 19% 24% Inventory 35,897 35,139 758 25,024 10,873 21% 21% 2% 19% 43% L-T Investments 16,677 16,308 368 16,793 -116 10% 10% 2% 13% -1% Total Assets 171,215 170,812 403 131,667 39,548 100% 100% 0% 100% 30% Fin. Debt * 47,733 44,568 3,164 39,811 7,922 28% 26% 7% 30% 20% Accounts Payable 36,914 40,526 -3,613 25,241 11,672 22% 24% -9% 19% 46% Toal Liabilities 109,897 111,849 -1,952 83,878 26,019 64% 65% -2% 64% 31% Equity 61,318 58,963 2,355 47,789 13,529 36% 35% 4% 36% 28% Net Worth / Share \$19.82 \$18.32 \$1.50 \$17.09 \$2.73

Key Financial Ratios

Key Financial Ratios
	2021.03.31	2020.12.31	QoQ	2020.03.31	YoY
AR Turnover (Days)	60	65	-5	65	-5
AR Turnover (Days)	78	79	-1	84	-6
Inventory Turnover (Days)	75	70	+5	71	+4
AP Turnover (Days)	81	79	+2	75	+6
Cash Conversion Cycle (Days)	72	70	+2	80	-8
ROE (annualized) (a)	17.4%	11.9%	+5.5 ppt	3.3%	+14.1 ppt
Current ratio	127%	124%	+3 ppt	121%	+6 ppt
Fin. Debt (b) / Total Assets	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. 11

Revenue Breakdown by Business (Quarterly)

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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 Update and Outlook

Chairman Peter

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Qisda's Vision

High value-added business will account for

more than half of the revenue by 2022

Qisda's Winning Strategy

2021 Q2 Outlook

• Completed the public tender offer of Sysage to enhance the synergy to be a total solution service provider
• Business Driver • 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

3. Summary of Business Groups

GM, Information Technology Business Group Commercial and Industrial Business Group GM, Medical Devices Business Group HarryYang GM, Business Solutions Group Michael Lee GM, Networking and Communication Business Group April Huang

Joe Huang

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

MEDICAL

Qisda Medical Fleet

Smart Medical care involves

Smart Hospital、Smart operating room、Smart dialysis center BenQ Integrated Digital Solutions

MEDICAL

BSG (Business Solutions)

Domain knowledge across six major fields

BSG (Business Solutions)

NCG (Networking & Communication)

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

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4. Event

• Changing the Accounting Treatment on Shareholding of AUO

The accounting treatment on investment in AUO is changed from using "Equity Method" to being classified as financial assets measured at Fair Value through Other Comprehensive Income (FVOCI) This is to allow Qisda's profit or loss to reflect its own operating performance as the result of its value - Profit or losses of AUO will no longer affect Qisda's profitability and earnings per share (EPS) • Investment in AUO is measured at fair value at each quarter with the resulting change in fair value presented in

• transformation in core business and to eliminate uncertainties from recognizing the share of AUO's profit or losses in non-operating activities - Such resulting change in fair value would not affect Qisda's net income and EPS in each quarter. • If AUO issue cash dividend, Qisda will recognize it as dividend revenue under non-operating activities - Such cash dividend will increase Qisda's non-operating income and EPS
• Starting from May 12, 2021, Qisda changed the accounting treatment on investment in AUO from "Equity Method" to "FVOCI" • Under IAS28.22, "one-time valuation gain" resulting from this change in accounting treatment will be recognized
• Qisda will not recognize the share of AUO's profit or losses by its ownership percentage in each quarter

• Other Comprehensive Income.

• under non-operating activities in Q2

The accounting treatment on investment in AUO is changed from using "Equity Method" to being classified as financial assets measured at Fair Value through Other Comprehensive Income (FVOCI) In Q2, Qisda's profitability and EPS will still be affected by "profit or loss from AUO" and "change in • For period from 04/01 - 5/11, Qisda will recognize the share of profit or losses from AUO by its ownership - Final result to be calculated upon AUO's publication of Q2 results - (Closing share price of AUO on 5/11 - Qisda's cost of ownership in AUO) * number of AUO shares Qisda owns and "Gain on disposal of investment" (this amount will be finalized after CPA audit in Q2)

• accounting treatment"
• percentage under Equity Method
• Under IAS28.22, one-time valuation gain resulting from change in accounting treatment will be recognized

• The estimated total amount is NT\$ 2.4 billion for both "Shares of profits of associates and joint ventures" As of 2021/03/31, Qisda's share cost of AUO was NT\$20.56 and owns 663 million shares The estimated amount (closing share price 24.2 – cost per share 20.56) * 663 million shares = NTD\$ 2.4 billion - This will be separately presented under "Shares of profits of associates and joint ventures" and "Gain on disposal of - The final amount of these two items will be made public after CPA completes Q2 assessment

• As of 2021/05/11, the closing share price of AUO is NT\$ 24.20

• • investment" in the Statement of Comprehensive Income

Qisda changed the accounting treatment on its shareholding of AUO

To manifest value transformation outcomes and to eliminate uncertainties from non-operating income and loss

BenQ Foundation resigned its position of AUO director via Peter Chen's resignation of authorized representative director (appointed through paragraph 2 of Article 27 of Company Act) as of May 11, 2021.

After considering relevant factors, Qisda changed the accounting treatment on its investment in AUO from using "Equity Method" to being classified as financial assets measured at Fair Value through Other Comprehensive Income (FVOCI) starting from May 12, 2021.

By measuring at FVOCI, profit or losses of AUO will no longer affect Qisda's profitability and earnings per share (EPS) as Qisda will not recognize the share of AUO's profit or losses by its ownership percentage in each quarter. Qisda's profit or loss would reflect its own operating performance as the result of its value transformation in core business. remeasurement would not affect Qisda's net income and EPS in each quarter.

Investment in AUO at FVOCI is subsequently measured at fair value at each quarter, with the resulting change in fair value presented in Other Comprehensive Income. Such unrealized gain or loss from

Qisda Press Release, May 11, 2021