RECHI — Interim / Quarterly Report 2021

Sep 29, 2021

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Investor Conference

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Agenda

• Welcome

C. M. Yang , Vice Chairman

• 2021 H1 financial results

Justin Ko , CFO

• 2021 H1 market review and 2021 Q4 outlook M. F. Feng , General Manager

• Development strategy M. F. Feng , General Manager

• Q&A

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Safe Harbor Notice

• RECHI’s statements of its current expectations are forward looking statements subject to significant risks and uncertainties and actual results may differ materially from 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.

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2021 H1 financial results

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Income statement

Unit in Thousand NT$	2021 H1	%	2020 H1	%	YOY	%
Sales volume of compressor	11,100,862		9,118,473		1,982,389	21.74
Sales revenues 12,112,043		100.00 9,479,782 100.00 2,632,261 27.77
Cost of goods sold -10,743,410		-88.70 -8,303,967 -87.60 -2,439,443 -29.38
Gross margin 1,368,633		11.30 1,175,815 12.40 192,818 16.40
Operating expenses -943,726		-7.79 -685,187 -7.23 -258,539 -37.73
Income(Loss) from operations 424,907		3.51 490,628 5.18 -65,721 -13.40
Total non-operating income and expenses 41,954		0.35 32,867 0.35 9,087 27.65
Income before tax 466,861		3.85 523,495 5.52 -56,634 -10.82
Income tax -123,861		-1.02 -155,551 -1.64 31,690 20.37
Income after tax 343,000		2.83 367,944 3.88 -24,944 -6.78
EPS	0.68		0.70

*Consolidated financial statements have been reviewed by the CPA firm of Deloitte & Touche

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Balance sheet

Unit in Thousand NT$	2021 H1	%	2020 H1	%	YoY	%
Cash and current financial assets	2,839,823	9.45	2,041,265	7.71	798,558	39.12
Accounts receivable,net	9,634,758	32.07	8,619,083	32.56	1,015,675	11.78
Inventories	2,930,671	9.76	1,846,091	6.97	1,084,580	58.75
Other current assets 5,864,451 19.52 4,792,017 18.10 1,072,434 22.38
Total current assets 21,269,703 70.80 17,298,456 65.34 3,971,247 22.96
Property,plant and equipment,net	7,135,551	23.75	7,179,583	27.12	-44,032	-0.61
Other non-current assets	1,636,517	5.45	1,995,197	7.54	-358,680	-17.98
Total assets 30,041,771 100.00 26,473,236 100.00 3,568,535 13.48
Short-term loans	2,143,698	7.14	2,055,867	7.77	87,831	4.27
Accountspayable,net	10,576,135	35.20	6,933,984	26.19	3,642,151	52.53
Other current liabilities 2,545,975 8.47 2,377,220 8.98 168,755 7.10
Total current liabilities 15,265,808 50.82 11,367,071 42.94 3,898,737 34.30
Long-term loans	3,298,063	10.98	5,446,037	20.57	-2,147,974	-39.44
Other non-current liabilities	843,043	2.81	664,849	2.51	178,194	26.80
Total liabilities 19,406,914 64.60 17,477,957 66.02 1,928,957 11.04 Total stockholders' equity 10,634,857 35.40 8,995,279 33.98 1,639,578 18.23

*Consolidated financial statements have been reviewed by the CPA firm of Deloitte & Touche

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Cash flow statement

Cash flow statement
Unit in Thousand NT$	2021 H1	2020 H1
Cash, beginning of year	3,576,943	1,158,126
Net cash provided by operating activities 862,613 1,999,303
Cash flow from investment activities	188,343	-312,820
(Decrease) increase in short-term loans,net -991,236 -558,970
(Decrease) increase in long-term loans,net	-700,000	-57,920
others -96,840 -186,454
Cash, end ofyear	2,839,823	2,041,265

*Consolidated financial statements have been reviewed by the CPA firm of Deloitte & Touche

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2021 H1 market review and 2021 Q4 outlook

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Multi-Application

Cooling Heating Dehumidifying Drying

RECHI has created unlimited possibilities for energy-saving products. We have earned satisfaction and trust from many well-known international home appliance brands.

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Window A/C Single-Split Type A/C Multi-Split Type A/C
Petcool
Tumbling-box Personal A/C mini refrigerator
Dehumidifiers
washing machines Mini dehumidifier
Packaged A/C Rooftop A/C
Heat Pump Tumble Dryers Heat pump cooling-water Wearable
Dishwashers with Heat Pump water heater machines devices A/C
Portable A/C Unitary A/C Potential
applications
our compressors have been applied to heat pump dryers
in Europe and account for more than 80% market share.
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The production capacity of 2021 global rotary compressor

• Compressor production capacity has gone through a period of shortage, then a period of equilibrium, and then a period of mature market.

• Compressor production capacity will continue to expand in 2021. the production capacity of China‘s rotary compressor accounts for 90% of the global capacity, and the production capacity of China’s Room A/C accounts for 82% of the global capacity.

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A/C in CHINA
32,530
Rotary compressor in CHINA 30,930
29,933
Global A/C 29,933
29,160
Global rotary compressor
27,560
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Unit：10k

2016

2017

2018

2019

2020

2021

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The market trend of rotary compressor in CHINA

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Unit：10k
24,000.00
21,518.10
22,000.00
20,604.00
21,155.10
20,000.00
19,272.48
18,000.00
16,000.00
15,162.54
14,000.00
13,362.19
12,000.00
10,000.00
2015年 2016年 2017年 2018年 2019年 2020年
Until Jun 30, 2021
◆Accumulative Sales Quantity reached to 130 million sets.
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Forecast of RAC/PAC market size in 2021

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RAC: Room Air Conditioners that excluded Portable A/C and Dehumidifier

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Growth rate of global RAC market in the first half of 2021

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Outlook of 2021 Q4 End market sales (YOY)

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N American Market
Europe Market
China Market
East Asia Market
N Africa / Middle
East / West Asia Sourth Asia Market
Market
Latin American Market
SE Asia Market
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Development strategy

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RECHI Development Strategy

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Pursue Create
Opportunities
Market
for new energy-
Demand saving markets
THE STRATEGY
OF VALUE
REVOLUTION New energy-
Technology
saving
Innovation
products
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RECHI Sales : Application ratio

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YOY %
P tac A/C 120.0%
2% 108.0%
Unitary A/C Others Roof-Top A/C
4% 1% 1%
100.0%
Window A/C
80.0%
5%
Dehumidifier
6%
Portable Split-Type A/C 60.0%
49% 44.8% 43.6%
12%
40.0%
Heat Pump Dryer 23.6%
20%
20.0%
5.9% 4.3%
0.0%
-20.0% -12.8% -14.3%
-40.0% PS: Roof-Top A/C sales increased by 419% due to lower base period.
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RECHI Sales : Geographic ratio (End market)

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Middle East (including
60.0%
africa/central asia/west asia) 52.8% YOY %
5%
S American Sourth Asia 43.5%
37.3%
1% 40.0%
5%
SE Asia 21.0% 21.2%
EUROPE
20.0%
8%
29%
Asia
%
0.0%
EUROPE CHINA N American East Asia SE Asia S American Middle East Sourth Asia
(including
N American africa/central
CHINA
asia/west asia)
19% -20.0%
25% -13.7%
-22.5%
-40.0%
-38.5%
-60.0%
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Product highlight and market strategy

• ⚫ Room A/C (Split-type A/C)

• Mature market → Increasing global market share.

• ⚫ Heat pump dryer Fast-growing market → Product leadership as a core competitive strategy aims.

• ⚫ Cabinet A/C (window A/C、dehumidifier、portable A/C) Mature market → Enhancing the competitiveness of products.

• ⚫ Unitary A/C and commercial-use medium/large-sized split type A/C Niche market → Expanding new markets and new customers.

• ⚫ New product and new market opportunity 1. New issues of carbon neutrality and energy-saving business. 2. For 5G station、cooling-water machine of big data center. 3. For mobile & personal living comfort.

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Q&A

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Create unlimited possibilities for the Energy Saving Industry. Become the top provider of proactive Energy Saving Product.

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