SPACE SHUTTLE — Interim / Quarterly Report 2017

Nov 29, 2017

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SPACE SHUTTLE HI-TECH CO.,LTD.

2017 Third Quarter Earnings Conference

December 01, 2017

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Since 1985

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SPACE SHUTTLE HI-TECH CO.,LTD.

Safe Harbor Notice

SPACE’s statements of its current expectations are forwardlooking 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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SPACE SHUTTLE HI-TECH CO.,LTD.

Agenda

● Company Profile

● Product description ● Operating overview

● Competitive Advantage ● Future Outlook

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SPACE SHUTTLE HI-TECH CO.,LTD.

COMPANY PROFILE

＊ Established in 1985

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• ＊ Public listed on Taiwan

Stock Market in Year 2000

• ＊ billion NT Capital $1.39

• ＊ 2 Plants in China

• ＊ Total Employees Approx. 552

• ＊ Headquartered in Taiwan

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SPACE SHUTTLE HI-TECH CO.,LTD. FACTORY LOCATION

DONGGUAN LUCKY FLY CONDUCTOR CO.LTD

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DONG GUAN HOU JIE XI TOU SPACE SHUTTLE HI-FI WIRE & CABLE CO., LTD

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With major business being production and sale of twisted copper wires.

With major business being production and sale of Raw Cable.

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Company history

		Company history
	1985	Setting up Space Shuttle Electric Wire Co., Ltd., with paid-in capital of NT$2 million Factorywas established in Tucheng, New Taipei City,producingcomputer wire
	1989	Increasing paid-in capital to NT$40 million and moving the factory to Shulin District of New Taipei City
	1995	Obtaining ISO9002 certification and increasing paid-in capital to NT$195 million
	1996	Equity investment in Space Shuttle Hi-Tech Co., Ltd. (Hong Kong) and transplanting computer-wireplant to Houjieh of Tongguan, mainland China's Guangdong Province, for the processing of imported materials; increasing paid-in capital to NT$580 million
	1998	Moving headquarters to Chutung plant in Hsinchu County of Taiwan; increasing paid-in capital to NT$800 million
	2000	Going public listed on Taiwan Stock Market ; increasing paid-in capital to NT$1,072 million
	2001	Introduction of technology and equipment for optical passive components for production at Chutung plant; increasing paid-in capital to NT$1.5 billion.
	2002	Setting up Space Shuttle Hi-Tech Co., Ltd. (Suzhou)and Dongguan Zhongju Co. Ltd. forproduction and sale of wiringmaterials on China's domestic market
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Company history

2003  Increasing paid-in capital to NT$1,968 million  Engagement in production and sales of active components at Chutung plant

2004  Increasing paid-in capital to NT$2,320 million 2005  Increasing paid-in capital to NT$3,320 million, in the wake of NT$1 billion capital increment via private share placement

• 2006  NT$920 million of capital increment via three private share placements and two capital reductions totaling NT$1,180 million , with paid-in capital standing at

• NT$2,440 million

• Dismantlin the O tical Passive Com onent and O tical Cable Division g p p p

• 2007  NT$770 million capital reduction , with paid-in capital standing at NT$1,670  Sales of the optical active components division's inventories, fixed assets, and deferred assets

• 2008  Capital increment with retained earnings and cash capital increment, with paid-in capital standing at NT$1,930 million

2009  Write-off of treasury stocks and capital reduction to make up for loss, with paid-in capital standing at NT$1,391,173,000

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Com an histor p y y

• 2012 Conversion of the following two establishments from processing plants for imported materials to companies limited by shares:

  • DONGGUAN HOU JIE XI TOU SPACE SHUTTLE HI-FI WIRE & CABLE CO., LTD, with major businesses being production and sale of electric wires and new plastic particles.

  • DONGGUAN FEITAI ELECTRONICS CO., LTD, with major business being production and sale of computer wires and adaptors

• Setting up DONGGUAN LUCKY FLY CONDUCTOR CO., LTD, with major business being production and sale of twisted copper wires.

2013

• Disposal of 20% stake in DONGGUAN ZHONG JU CO.,LTD, leaving 30% stake in ownership

• Liquidation of the company's equity investment in SPACE SHUTTLE (SUZHOU) ELECTRIC LINE MATERIAL CO.,LTD

• 2014[] Sale of 81% stake in DONGGUAN FEITAI ELECTRONICS CO., LTD , with share holdin now standin at 19% g g

• 2015  Waiving the right to take part in capital increment of DONGGUAN ZHONG JU CO.,LTD, reducing its stake from 30% to 19.15%

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Company Organization Chart

Audit Office

Board of Directors Remuneration Committee

President

Overseas Operation Administration Division Division

DONGGUAN HOUJIE DONGGUAN LUCKY FLY XITOU SPACE CONDUCTOR CO.LTD SHUTTLE HI-FI WIRE & CABLE CO., LTD

Management Dept. Accounting Dept. Finance Dept. Information Dept.

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Directors & Supervisors Shareholding ratio

Job titles	Name	Number of shares	Shareholding ratio
Chairman	WANG,HSUAN-HUI	11,579,000	8.32%
Director	WANG,SHU-MIN	10,000	0.01%
Director	WANG,KUN-TIEN	31,613,685	22.72%
Director	LO,CHIU-HSIANG	11,100,801	7.98%
Director	CHIU,CHIU-LIN	1,145,196	0.82%
Independent director	WU,CHENG-TE	3,676	0.003%
Independent director	CHU,HSIAO-KANG	0	0.00%
Supervisor	WANG,CHING- CHUNG	2,332,003	1.68%
Supervisor	LEE,TUNG-HSING	31,651	0.02%

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Management Team

TITLE	NAME	SERVICE YEARS	Selected Experience
Chairman& President	WANG, HSUAN-HUI	3.5 Years	Mu-cha senior high school, Mold Branch Director, Xing Yang metal conductor (Kunshan) Co., Ltd. Director,XingYangmetal conductor(Dongguan)Co.,Ltd.
Vice President (Fin. & Acc. Manager)	CHU, HUI-CHENG	5.75 Years	Baruch College, CUNY, MBA AVP, Cheer Time Co., LTD. AVP, C-Tech United Co., LTD.
Sales Manager	WANG, JIAN- CHENG	4.5 Years	San-Ji senior high school, EE Branch Manager, Xing Yang metal conductor (Kun-shan) Co., Ltd.
Finance Manager (spokesman)	LIN, ZI-XIN	13.5 Years	The department of Accounting, China Technology College Materials Department, GIGABYTE Co., LTD.
Accounting Manager (Acting spokesman)	CHENG, YI-HONG	10 Years	The department of Financial Operation, National Kaohsiung First University Senior Commissioner, BDO Taiwan
Audit Manager	Luo, Lie-Yong	5.67 Years	The department of Accounting, National Chengchi University Vice Manager, Grant Thornton International Ltd.

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Business philosophy

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Since its inception for the production of RGB cable, management of Space Shuttle, regardless change in ownership, has been constantly developing products meeting market demand, under the principle of "quality, speed, flexibility, and service," so as to create value for customers and enhance corporate competitiveness.

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Main Products

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Display Port Cable

FEP Wire

CAT5 Cable CAT6 Cable DVI Cable

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RG Type Cable

Serial Bus Cable

LVDS Cable

VGA Cable 1394 Cable

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USB 3.0 Cable

USB 3.1 Cable

HDMI Cable High Speed HDMI Cable

SCSI Cable

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USB Type C (Coaxial) USB Type C (Twist)

Thunderbolt

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SPACE SHUTTLE HI-TECH CO.,LTD.

Statements of Comprehensive Income

in thousands of new taiwan dollars,except EPS	2017Q3	2017Q2	2016Q3	quarterly **change **	annually **change **
NET REVENUE	850,485	733,635	606,608	16%	40%
GROSS PROFIT	80,504	48,090	68,759
OPERATING EXPENSES	(40,803)	(38,612)	(41,926)	6%	-3%
OPERATING PROFIT	39,701	9,478	26,833
NON-OPERATING INCOME AND EXPENSES	8,965	8,021	(12,151)	12%	-174%
NET INCOME ATTRIBUTABLE TO SAHREHOLDERS OF THE PARENT	47,195	13,280	12,037	255%	292%
NET INCOME MARGN	5.55%	1.81%	1.98%
EPS (NTD)	0.34	0.10	0.09	240%	278%
ROE	4.14%	1.21%	1.07%

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Balance Sheets & Key Indices

	2017Q3		2017Q2		2016Q3
in thousands of new taiwan dollars	amount	%	amount	%	amount	%
CASH AND CASH EQUIVALENTS	219,002	8%	205,417	8%	284,019	13%
ACCOUTS RECEIVABLES	1,013,768	39%	891,815	36%	651,969	29%
INVENTORIES	284,713	11%	294,590	12%	187,409	8%
PROPERTY PLANT AND EQUIPMENT	316,032	12%	313,830	13%	318,235	14%
TOTAL ASSETS	2,583,105	100%	2,448,430 100%		2,238,307 100%
CURRENT LIABILITIES	1,406,205	54%	1,327,051	**54% **	1,100,741	49%
TOTAL LIABILITIES	1,416,196	55%	1,337,747	**55% **	1,109,977	50%
TOTAL EQUITY	1,166,909	45%	1,110,683	45%	1,128,330	50%
IMPORTANT FINANCIAL INDICATOR
AVERAGE COLLECTION DAYS	101		101		93
AVERAGE INVENTORY TURNOVER DAYS	34		35		32
CURRENT RATIO(multiple)	1.23		1.20		1.22

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SPACE SHUTTLE HI-TECH CO.,LTD.

Cash Flows

in thousands of new taiwan dollars	2017Q3	2017Q2	2016Q3
CASH AND CASH EQUIVALENT ,BEGINNING OF PERIOD	205,417	138,258	218,991
CASH FLOWS FROM OPERATING ACTIVITIES	1,521	(183,355)	46,858
CASH FLOWS FROM INVESTING ACTIVITIES	(14,355)	(26,884)	(21,189)
CASH FLOWS FROM FINANCING ACTIVITIES	20,716	263,681	54,625
EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS	5,703	13,717	(15,266)
CASH AND CASH EQUIVALENT ,END OF PERIOD	219,002	205,417	284,019

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SPACE SHUTTLE HI-TECH CO.,LTD.

Sales Revenue by Business

Unit ： NTD in thousand

Items	2014	2014	2015	2015	2016	2016	2017 1-9M	2017 1-9M
	Revenue	%	Revenue	%	Revenue	%	Revenue	%
Transmission cable	647,372	26%	569,155	23%	710,549	30.7%	637,797	28.47%
Assembly product	557,422	22%	465,845	19%	5,682	0.24%	1,713	0.08%
Copper wires	1,331,018	52%	1,405,54 5	58%	1,598,425	69.06%	1,600,526	71.45%
合計	2,535,812	100%	2,440,545	100%	2,314,656	100%	2,240,036	100%

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Financial Overview- Statements of Income

2,000,000 2,100,000 2,200,000 2,300,000 2,400,000 2,500,000 2,600,000						Unit：NTD in thousand -30,000 -15,000 0 15,000 30,000 45,000 60,000 75,000 90,000 105年 106年1-9月 本期稅後淨利(損) Net Income	Unit：NTD in thousand -30,000 -15,000 0 15,000 30,000 45,000 60,000 75,000 90,000 105年 106年1-9月 本期稅後淨利(損) Net Income	Unit：NTD in thousand -30,000 -15,000 0 15,000 30,000 45,000 60,000 75,000 90,000 105年 106年1-9月 本期稅後淨利(損) Net Income	Unit：NTD in thousand -30,000 -15,000 0 15,000 30,000 45,000 60,000 75,000 90,000 105年 106年1-9月 本期稅後淨利(損) Net Income	Unit：NTD in thousand -30,000 -15,000 0 15,000 30,000 45,000 60,000 75,000 90,000 105年 106年1-9月 本期稅後淨利(損) Net Income	Unit：NTD in thousand -30,000 -15,000 0 15,000 30,000 45,000 60,000 75,000 90,000 105年 106年1-9月 本期稅後淨利(損) Net Income	Unit：NTD in thousand -30,000 -15,000 0 15,000 30,000 45,000 60,000 75,000 90,000 105年 106年1-9月 本期稅後淨利(損) Net Income	Unit：NTD in thousand -30,000 -15,000 0 15,000 30,000 45,000 60,000 75,000 90,000 105年 106年1-9月 本期稅後淨利(損) Net Income
	103年 104年 營收金額 NET REVENUE
	Items			2014		2015		2016			2017 1-9M
Net Revenues				2,535,812		2,440,545		2,314,656			2,240,036
Gross Profit				191,707		203,406		230,039			192,296
OperatingProfit				(26,677)		(16,570)		65,203			71,041
Net Income				(11,217)		(24,627)		9,193			71,077
EPS（NTD）				-0.08		-0.18		0.07			0.51

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Terminal Customers

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The main supplier

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嘉森塑胶

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Competitive edge

• High extent of vertical integration of the group, with industrial chain spanning twisted copper and wiring materials, conducive to high quality and punctual delivery

• High visibility of the company's brand on the market, owning world-class customers

• Quality supply chain, securing grip on fluctuation in copper prices and suppliers

• Good and stable relationship with banks, which facilitates banking loans at low interest

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Future Outlook

• Expandign the Group's operation scale

 Transfering into the car wire and medical wire and other safety and security industry market

• Applying for IATF 16949 certification

• Implementing for Manufacturing Execution System, MES

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SPACE SHUTTLE HI-TECH CO.,LTD.

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