SPACE SHUTTLE — Interim / Quarterly Report 2018

Oct 11, 2018

SPACE SHUTTLE HI-TECH CO.,LTD.

2018 Second Quarter Earnings Conference

October 11, 2018

Since 1985 S ~~ince 1985~~

Connectin toda and tomorrow g y ~~Connecting today and tomorrow~~ 0

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

• ＊ Public listed on Taiwan Stock Market in Year 2000

＊ Capital $1.39 billion NT

• ＊ 2 Plants in China

• ＊ Total Employees Approx. 563

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• ＊ Headquartered in Taiwan

Since 1985

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

DONGGUAN LUCKY FLY CONDUCTOR CO.LTD

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

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

With major business being production and sale of Raw Cable.

Since 1985

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Company history 1985 Setting up Space Shuttle Electric Wire Co., Ltd., with paid-in capital of NT$2 million Factory was established in Tucheng, New Taipei City, producing computer wire 1989 Increasing paid-in capital to NT$40 million and moving the factory to Shulin District of New Tai ei Cit p y 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-wire plant to Houjieh of Tongguan, mainland China's Guangdong Province , for the processing of imported materials; increasing paid-in capital to NT$580 million

		Pif th i f itd til ii idi itl t
		rovnce or e processng o mpore maeras; ncreasng pa-n capa o ,
		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

2015

• Sale of 81% stake in DONGGUAN FEITAI ELECTRONICS CO., LTD , with share holding now standing at 19%

• 2016 � 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
Board of
Directors
Remuneration
Audit Office
Committee
President
Overseas Operation Administration
Division Division
DONGGUAN HOUJIE Management Dept.
DONGGUAN LUCKY FLY XITOU SPACE
CONDUCTOR CO.LTD SHUTTLE HI-FI WIRE Accounting Dept.
& CABLE CO., LTD
Finance Dept.
Information Dept.
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Directors & Supervisors Shareholding ratio

	Job titles	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	33,207,685	23.87%
	Director		LO,CHIU-HSIANG	11,100,801	7.98%
	Director		CHIU,CHIU-LIN	1,145,196	0.82%
	Independent director		WU,CHENG-TE	0	0.00%
	Independent director		CHU,HSIAO-KANG	0	0.00%
	Supervisor		WANG,CHING- CHUNG	1,192,003	0.86%
	Supervisor		LEE,TUNG-HSING	31,651	0.02%

Management Team

	TITLE	NAME	SERVICE YEARS	Selected Experience
	Chairman& President	WANG, HSUAN-HUI	4 Years	�Mu-cha senior high school, Mold Branch �Director, Xing Yang metal conductor (Kunshan) Co., Ltd. �Director, Xing Yang metal conductor (Dongguan) Co., Ltd.
	Sales Manager	WANG, JIAN- CHENG	5 Years	�San-Ji senior high school, EE Branch �Manager Xing Yang metal conductor (Kun-shan) Co Ltd , ., .
	Finance Manager (spokesman)	LIN, ZI-XIN	14 Years	�The department of Accounting, China Technology College �Materials Department, GIGABYTE Co., LTD.
	Accounting Manager (Acting spokesman)	CHENG, YI-HONG	11 Years	�The department of Financial Operation, National Kaohsiung First University �Senior Commissioner, BDO Taiwan
	Audit Manager	Luo, Lie-Yong	6 Years	�The department of Accounting, National Chengchi University �Vice Manager, Grant Thornton International Ltd.

Business philosophy

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
CAT5 Cable CAT6 Cable DVI Cable Display Port Cable FEP Wire
VGA Cable 1394 Cable LVDS Cable RG Type Cable Serial Bus Cable
HDMI Cable High Speed HDMI Cable SCSI Cable USB 3.0 Cable USB 3.1 Cable
USB Type C (Coaxial) USB Type C (Twist) Thunderbolt
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SPACE SHUTTLE HI-TECH CO.,LTD.

Sales Revenue by Business

	Items	2015		2016		2017		2018 1~6M
		Revenue	%	Revenue	%	Revenue	%	Revenue	%
	Transmission cable	569,155	23%	710,549	30.70%	810,808	26.14%	356,998	20.74%
	Assembly product	465,845	19%	5,682	0.24%	2,483	0.08%	1,497	0.09%
	Copper wires	1,405,545	58%	1,598,425	69.06%	2,288,493	73.78%	1,362,553	79.17%
	合計	2,440,545	100%	2,314,656	100%	3,101,784	100.00%	1,721,048	100%

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||||||
|---|---|---|---|---|
|Financial Overview- Statements of Income|
|3,500,000|1|
|3,000,000|0.8|
|2,500,000|
|0.6|
|2,000,000|
|0.4|
|1,500,000|
|0.2|
|1,000,000|
|0|
|500,000|
|-0.2|
|0|
|2015|2016|2017|2018|
|-500,000|1-6M|-0.4|
|Net Revenues|Net Income|EPS（NTD）|
|Unit：NTD in thousand|
|2018|
|Items|2015|2016|2017|
|1-6M|
|Net Revenues|2,440,545|2,314,656|3,101,784|1,721,048|
|Gross Profit|203,406|230,039|280,014|101,091|
|Operating Profit|(16,570)|65,203|114,563|11,072|
|Net Income|(24,627)|9,193|117,323|(13,918)|
|EPS（NTD）|-0.18|0.07|0.84|-0.10|
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SPACE SHUTTLE HI-TECH CO.,LTD. Statements of Comprehensive Income

	in thousands of new taiwan dollars,except EPS	in thousands of new taiwan dollars,except EPS	in thousands of new taiwan dollars,except EPS	in thousands of new taiwan dollars,except EPS	in thousands of new taiwan dollars,except EPS	in thousands of new taiwan dollars,except EPS	in thousands of new taiwan dollars,except EPS
	Items		1H18		1H17		YoY
			Amount	%	Amount	%
	Net Revenues		1,721,048	100.00	1,389,551	100.00	23.86%
	Gross Profit		101,091	5.87	111,792	8.05	-9.57%
	Operating Expenses		90,019	5.23	80,452	5.79	11.89%
	Operating Profit		11,072	0.64	31,340	2.26	-64.67%
	Income Before Tax		(4,273)	0.25	29,255	2.11	-114.61%
	Net Income		(13,918)	0.81	23,882	1.72	-158.28%
	Net Income （attribute to owners of the parent）		(13,918)	0.81	23,882	1.72	-158.28%
	EPS（NTD）		(0.10)		0.17
		Since 1985

Terminal Customers

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The main supplier

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

Since 1985

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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

• Import MES Manufacturing Execution System • Received IATF 16949 certification for automobiles in 2018 (International Automotive Industry Quality Standard Certification)

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SPACE SHUTTLE HI-TECH CO.,LTD.

Since 1985

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