SINBON Electronics — Interim / Quarterly Report 2019

Sep 3, 2019

SINBON 2019 H1 RESULTS & PROSPECTS

Prepared by Finance Department 2019/07

Safe Harbor Notice

This presentation contains forward looking statements and is subject to significant risks and uncertainties.

Actual results may differ materially from those in the forward looking statements.

SINBON AT A GLANCE

Solution Provider

As an integrated SOLUTION PROVIDER in the "MAGIC" industries, it's our mission to create increasing value through continuous development on technologies and services to our customers worldwide.

Listed on Taiwan Stock Exchange (Code # 3023)

in Asia, Europe, America

4000^↑

Worldwide employees

-Customized Automation

NEVER STOP INNOVATING

Milestone

CREATE VALUE TO CUSTOMER

Value-added Solution

MAKE CABLE INVINCIBLE

Cable Assembly

CAPABILITY & STRENGTH

• Soldering : 16 AWG 44 AWG wire
• Crimping : 4/0 AWG 34 AWG wire / Max:240 mm²
• Molding : PE / PVC / TPE / ABS / TPO / PU / TPU
• Excellent at over molding and low pressure molding
• Multiple wires or cables assembled together
• Sourcing and verification of alternative materials
• Automated processes

BE SMART THAN JUST A CABLE

PCB Assembly

FEATURES

• •DIP and SMT process capability
• Single sided, double sided
• BGA rework station
• Lean production
• SMT Error Prevention System (EPS)

• •Includes ICT, AOI, J-TAG, SPI, and other regular tests

• PCB size : 50x50mm~460x510mm

• Chip size : QFP, BGA, µ BGA, CSP (Max.:100*100mm)
• Chip dimensions: 0201 (inch)
• Mounting accuracy: ± 0.035 mm ~ 0.08 mm/chip (Cpk≧1.33)

DESIGN FOR MANUFACTURING Box Build

Electronic Engineering

Power management / Interface data transmission / Remote side charging function / Board level design / Radio frequency technology

Firmware Capabilities MCU firmware design / Device driver / OS porting / Boot loader development

Software Capabilities AP design (PC / mobile) / Web service design / Data base design

Mechanical Design ME customized design / Tooling services / ID customized design / 3D modeling

Auto Test Test AP design / Real time data display / Fixture design

Design Quality Engineering Function validation / Reliability validation / EMC / Safety validation

Global Service Network

MIAOLI FACTORY

Taiwan

FEATURES

Cable assembly PCB assembly High mix low volume Clean room

AVAILABLE SPACE

7,262 m²

MANPOWER

300

STANDARD COMPLIANCE

AS 9100 GMP IECQ IPC-610, Class 2 IPC-620, Class 2 ISO 9001 ISO 14001 ISO 14064-1 OHSAS 18001 SA 8000 TS 16949 UL

TATABÁNYA FACTORY

Hungary

FEATURES

Fiber optic cable assembly Copper cable assembly High mix low volume High volume

ISO 9001

ISO 14001 IPC-620, class 2 ISO 26000 (In preparation) TS 16949 (In preparation)

STANDARD COMPLIANCE

AVAILABLE SPACE

4,600 m²

MANPOWER

200

DAYTON FACTORY USA

FEATURES

Cable assembly PCB assembly Ball grid array assembly Hybrid assembly Value-added service

AVAILABLE SPACE

4,645 m²

MANPOWER

90

STANDARD COMPLIANCE

ISO 9001 IPC-610, class 2 IPC-620, class 2 ISO 13485 (In preparation)

BEIJING FACTORY

China

FEATURES

Cable assembly PCB assembly Box build HV cable lab High mix low volume

STANDARD COMPLIANCE

Green Partner (Sony) IPC-610, Class 2 IPC-620, Class 2 ISO 9001 ISO 13485 ISO 14001 OHSAS 18001 UL

AVAILABLE SPACE

9,915 m²

MANPOWER

600

JIANGYIN FACTORY

China

FEATURES

Cable assembly PCB assembly Box build Raw cable factory Tooling center Laboratory High mix low volume High volume low mix

AVAILABLE SPACE

Factory I – 13,000 m² Factory II – 21,450 m² Factory III – 2,000 m²

MANPOWER

2,300

STANDARD COMPLIANCE

AS 9100 Eco-Partner FDA Green Partner IPC-610, Class 2 IPC-620, Class 2 ISO 9001 ISO 14001 ISO 13485 MedAccred TS 16949 UL

TONGCHENG FACTORY

T O N G C H E N G

China

Cable assembly Tooling center Laboratory

STANDARD COMPLIANCE

EICC Green Partner (Canon) ISO 9001 ISO14001 TS 16949 UL

AVAILABLE SPACE

6,000 m²

MANPOWER

400

Financial Focus

MONTHLY REVENUE

Non-audited and Consolidated

(Expressed in Thousands of NTD)

	2019	2018	2017	2016
Jan	1,327,632		1,192,179 1,151,241	1,237,837
Feb	1,206,314		1,080,475 1,044,775	1,010,416
Mar	1,520,619		1,263,544 1,086,436	1,118,070
Apr	1,588,031		1,284,709 1,031,539	1,142,696
May	1,621,820		1,320,190 1,112,308	1,156,504
Jun	1,680,489		1,402,581 1,203,510	1,167,868
Jul	1,701,798	1,425,256	1,208,239	1,069,748
Aug		1,470,550	1,214,617	1,088,207
Sep			1,507,963 1,250,674	1,102,747
Oct			1,406,590 1,113,106	1,047,481
Nov		1,308,573	1,135,489	1,054,954
Dec			1,152,609 1,035,184	1,019,057
Total		10,646,703 15,815,219 13,587,118 13,215,585

LAST 5 YEARS RESULT HIGHLIGHT

Audited

	2018	2017	2016	2015	2014
(Expressed in Thousands of NTD)	Consolidated	Consolidated	Consolidated	Consolidated	Consolidated
Net Sales	15,645,253	13,061,439	12,925,843	12,111,258	11,642,719
YOY(%)	19.78%	1.05%	6.73%	4.02%	10.30%
COGS	(11,725,308)	(9,781,088)	(9,716,741)	(9,389,101)	(9,112,319)
Gross Profit	3,919,945	3,280,351	3,209,102	2,722,157	2,530,400
Gross Profit(%)	25.06%	25.11%	24.83%	22.48%	21.73%
Operating Expenses	(2,288,256)	(1,887,205)	(1,790,898)	(1,655,368)	(1,579,810)
Operation Income	1,631,689	1,393,146	1,418,204	1,066,789	950,590
Operaion Profit(%)	10.43%	10.67%	10.97%	8.81%	8.16%
Net Non-operating P/L	288,379	226,398	178,840	303,220	92,932
Income before Taxes	1,920,068	1,619,544	1,597,044	1,370,009	1,043,522
Income Taxes	(548,539)	(395,456)	(435,309)	(415,906)	(268,575)
Less: Minority Interests	(41,948)	(2,383)	4,349	(16,092)	(18,805)
Net Income	1,413,477	1,226,471	1,157,386	970,195	793,752
Net Profit(%)	9.03%	9.39%	8.95%	8.01%	6.82%
Outstanding Shares('000)	225,727	225,416	225,416	214,224	207,671
Basic EPS(NTD)	6.26	5.44	5.15	4.53	3.82
Equities	6,572,643	6,084,637	5,732,732	5,583,341	5,019,057
ROE(%)	21.51%	20.16%	20.19%	17.38%	15.81%

LAST 5 QUARTERS RESULT HIGHLIGHT

Audited or Reviewed

(Expressed in Thousands of NTD)	Q2'19	Q1'19	Q4'18	Q3'18	Q2'18
Net Sales	4,830,758	4,009,043	3,825,621	4,392,642	3,940,772
Gross Profit	1,241,410	1,031,046	979,029	1,095,676	969,555
Gross Profit %	25.70%	25.72%	25.59%	24.94%	24.60%
Operation Income	582,415	435,040	394,304	550,343	346,886
Non-operating Income	122,312	61,925	33,880	99,729	225,987
Non-operating Expenses	(30,688)	(16,311)	(30,041)	(10,420)	(9,659)
Income before Taxes	674,039	480,654	398,143	639,652	563,214
Income Taxes	(166,153)	(130,687)	(188,221)	(169,079)	(143,328)
Minority Interests	(1,712)	(14,902)	(17,998)	(9,547)	(8,990)
Net Income	509,598	364,869	227,920	480,120	428,876
Net Profit %	10.55%	9.10%	5.96%	10.93%	10.88%
EPS (in NT Dollars)	2.23	1.60	1.00	2.13	1.90
Stockholders' Equity	6,686,917	7,230,481	6,572,643	6,252,007	5,901,805
ROE (by quarterly)	7.62%	5.05%	3.47%	7.68%	7.27%

REVENUES BY MARKET SEGMENT (QUARTERLY)

(Expressed in Thousands of NTD)

Industry	2019 H1	2018 H1	Increase (Decrease)	%
GREEN ENERGY	2,520,754	1,702,549	818,204	48%
INDUSTRIAL APPLICATION	2,570,606	2,160,724	409,882	19%
MEDICAL HEALTH	804,654	674,033	130,621	19%
AUTOMOTIVE	736,684	716,806	19,878	3%
COMMUNICATION	2,207,104	2,172,878	34,226	2%
Total	8,839,801	7,426,990	1,412,811	19%

PERCENTAGE OF REVENUES BY MARKET SEGMENT

REVENUES BY MARKET SEGMENT (YEARLY)

(Expressed in Thousands of NTD)

Industry	2018	2017	Increase (Decrease)	%
GREEN ENERGY	3,672,134	2,522,430	1,149,704	46%
INDUSTRIAL APPLICATION	4,088,135	3,693,855	394,280	11%
MEDICAL HEALTH	1,457,058	1,195,107	261,951	22%
AUTOMOTIVE	1,557,368	1,304,426	252,942	19%
COMMUNICATION	4,870,558	4,345,621	524,937	12%
Total	15,645,253	13,061,439	2,583,814	20%

PERCENTAGE OF REVENUES BY MARKET SEGMENT

FINANCIAL RATIO

Ratio	2013	2014	2015	2016	2017	2018
Debt Ratio	50.42%	51.52%	49.27%	47.85%	49.71%	52.14%
Long-term Funds to Property, Plant and Equipment Ratio	321.56%	349.93%	397.86%	432.88%	474.09%	389.43%
Current Ratio	164.03%	165.75%	166.75%	174.54%	177.53%	162.74%
Quick Ratio	123.72%	121.24%	122.32%	130.90%	125.04%	108.69%
Times Interest Earned Ratio	24.39	26.71	36.81	57.74	55.41	45.27
A/R Turnover	3.59	3.76	3.94	4.14	3.85	3.88
A/P Turnover	4.77	4.52	5.01	4.91	4.92	4.67
Inventory Turnover	4.96	4.93	4.57	4.38	4.08	3.77
Property, Plant and Equipment Turnover	6.69	7.53	8.03	9.08	8.79	8.44
Total Assets Turnover	1.12	1.17	1.09	1.16	1.04	1.10
ROA	7.00%	8.14%	9.13%	10.68%	10.69%	9.95%
ROE	13.88%	15.92%	17.80%	20.35%	20.27%	20.80%
Profit before Tax to Capital	41.75%	50.25%	62.95%	70.85%	71.85%	85.06%
Net Profit Rate	5.76%	6.66%	7.88%	8.99%	9.39%	9.03%
Basic EPS (NT\$)	3.20	3.82	4.53	5.15	5.44	6.26

The relevant information is as follows : http://www.sinbon.com/investor-relations/financial-statement/

Financial Records

REVENUE 2013-2018

NTD Million

GROSS PROFIT 2013-2018

28

NET INCOME

19

DIVIDEND POLICY 2013-2018

Dividend

	2013	2014	2015	2016	2017	2018
EPS(NT\$)	3.20	3.82	4.53	5.15	5.44	6.26
Cash Dividend(NT\$)	2.50	2.80	3.10	3.70	4.00	4.50
Stock Dividend(NT\$)	0.00	0.20	0.30	0.00	0.00	0.00
SUM	2.50	3.00	3.40	3.70	4.00	4.50
Payout Ratio	78%	79%	75%	72%	74%	72%
Year-end Stock Price	30.52	48.9	53.82	69.3	86.3	82.8
Yield Rate	8.19%	6.13%	6.32%	5.34%	4.63%	5.43%

Business Outlook

DO THE MAGIC⁺

Solution Services in Five Fields

Medical Health Automotive Green Energy Industrial Application Communication

Intelligent / Integrated / International

MEDICAL HEALTH

APPLICATIONS

Diagnostic Imaging Equipment Aesthetic Equipment Patient Monitor Fitness Equipment Electric Bicycle Massage Equipment

MAJOR CUSTOMERS

Cardinal Health Carestream GE Healthcare Lumenis Medtronic Mindray Natus Medical Neusoft

Nox Medical Philips Toshiba United Imaging Spacelabs Stryker Wandong

AUTOMOTIVE

Electric Vehicle Charging System Automotive Applications Parking-related System Motorsport Aviation

APPLICATIONS MAJOR CUSTOMERS

Delphi Denso Fujitsu Guoxuan High-tech Honda HTK Lear Magna Mitsubishi Nissan TTE

Wind Energy Solar Energy Smart Grid

APPLICATIONS MAJOR CUSTOMERS

APS Enphase Envision Gamesa GE Goldwind NEGO Siemens SunPower Trinasolar Vestas

INDUSTRIAL APPLICATION

Energy Distribution Automation & Control Construction & Transportation Industrial Robot High Precision Equipment

Material Handling Field Engineering Safety & Security Data Capture

APPLICATIONS MAJOR CUSTOMERS

ASML Datalogic Dover HAAS Honeywell Hussmann Parker Schneider Siemens Trimble Xplore Zebra

COMMUNICATION

RF Applications Mobile Device Digital Home Antennas (design & manufacturing) IoT (consumer & industrial) Data Centers Telecom Fiber Optics

APPLICATIONS MAJOR CUSTOMERS

ASUS Belden CommScope Datwyler DJI Garmin Hisense Lenovo Logitech Quanta R&M Vivo

OUR MAGIC SERVICE TO MEET YOUR NEEDS

Business Coverage