STARK — Interim / Quarterly Report 2019

May 16, 2019

Stark Technology Inc.

2019Q1 Investor Conference

Safe Harbor Notice

There are variety of factors which may influence statements or contents been drafted within this presentation, therefore we strongly recommend audience to refer to the information on published MOPS website in case has been any adjustment made.

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STI General Information

• Founded in 1993, public traded in 2001

• 478+ Employees

• The largest domestic system integrator in Taiwan

• One of Taiwan’s top 500 service enterprises company.

• Rated as Taiwan’s top 6% - 20% company over the 5[th] Corporate Governance Evaluation

• Dedication to service and maintain 1,600+ majority of the 2,000+ company enterprise business

• Providing more than 40 products & solutions to service our customers

• Our vision is to assist our customers to become a

• Information Service Provider

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STI Service Network

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Sales Operation – by Industries

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We’ve been worked and working on:

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Cloud Services & Data Analytics
Infrastructure
internet
Enterprises Enterprise/PC
Factories
Travel Cloud
Big Data & Cable
Medical Enterprise Apps Computing Broadband
Cloud Cloud Home/PC
Data Integration
SmartTV
Deep Learning
Buyers, Analytics Mobile APP
3G/LTE
Sponsors FSI Cloud
(Fintech, Blockchain) WiFi
IoT
Factory
Automation
Smart Mobile
Industry 4.0 LoRa
Developers, NB-IoT
Content Providers,
IoT Devices
Consumers
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、 、 Inter-connect : Telecomm Broadcast/Cable Internet 、 、 、 Multi-Screens : PC NB/Pad Smartphone SmartTV

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Information Technologies

Portal Personalization Content Mgmt Single sign-on

eCommerce Travel Medical Gov’t Enterprise Apps Professional OSS, VAS High Freq. Trade ERP,CRM,SCM Services Probe/CEM by Trade IoT MES, PLM AML (Environmental Monitoring) MFG Telco FSI Vertical Apps. Consulting Design EAI@SOA Middleware Data Integration@BI Deployment Integration Data Mgmt. Security

System & Platform Resource Mgmt (CPU/GPU/VM/Container/Bare Metal) Networking Platform Load Balancing Network Mgmt

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Tel-Communication Technologies

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OTN/ROADM/OXC
Backbone
OXC
DWDM
NG-SDH/PTN Ring
STM-16/64
STM-1
SDH Mux Carrier-Ethernet
ATM switch
Core/Regional
Gigabit Ethernet
Ring
TDM FTTx, x-PON xDSL Metro-Ethernet Metro./Access
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Products & Solutions

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Info. Security
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Data Comm.
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Software Development Tools
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Resource MGMT.
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Data MGMT.
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Open Systems
Telcomm.
DASAN
STI Professional Service
Nokia Networks
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Balance Sheet Overview (Consolidated)

Units:NT$ thousand

	2019/3/31	2019/3/31	2018/3/31	2018/3/31	2017/3/31	2017/3/31
	AMT	%	AMT	%	AMT	%
Cash and cash equivalents	1,215,207	26%	1,491,763	34%	1,888,331	42%
Accounts receivable(including contract assets)	738,795	15%	925,917	22%	1,118,861	25%
Inventories	1,544,287	33%	844,790	19%	580,188	13%
Property,Plant and equipment	459,250	10%	460,462	11%	369,964	8%
Total Assets	4,734,654	100%	4,401,527	100%	4,491,551	100%
Current Liabilities	1,823,041	38%	1,707,830	39%	1,635,960	36%
Equity	2,809,772	59%	2,646,015	60%	2,821,424	63%
Source: Market Observation Post System

Note: The increase in inventory in 2019Q1 is due to the long period of construction of some large-scale projects.

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Income Statements Overview (Consolidated)

Units: NT$ thousand

	2019/3/31	2019/3/31	2018/3/31	2018/3/31		2017/3/31	2017/3/31
Item	AMT	%	AMT	%	YOY	AMT	%
Revenues	1,392,630	**100% **	1,303,830	100%	**7% **	1,079,835	100%
Gross profit	360,821	26%	373,572	71%	-3%	253,531	23%
Operating expense	204,896	15%	224,834	17%	-9%	166,273	15%
Operating income	155,925	11%	148,738	12%	5%	87,258	8%
Other income	7,230	1%	3,427	0%	111%	-590	0%
Pre-tax income	163,155	12%	152,165	12%	7%	86,668	8%
Net income	122,676	9%	108,253	8%	13%	**73,667 **	7%
EPS(NT$)	1.15		**1.02 **			0.55

Source: Market Observation Post System

Note:2019Q1 revenue and increased by 88,800K from the last quarter, mainly due to the increase in Application Software and Enterprise Network; EPS was NT$1.15

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Sales Revenue & Net Income

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Sales Revenue Units:NT$ Net Income Units:NT$
thousand thousand
5,000,000 450,000
4,648,442
404,220
4,500,000 4,201,110 400,000
4,000,000
350,000
305,667
3,500,000
300,000
3,000,000
250,000
2,500,000
200,000
2,000,000
1,392,630 150,000 122,676
1,500,000
100,000
1,000,000
500,000 50,000
0 0
2019Q1 2018 2017 2019Q1 2018 2017
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EPS & Capital

0.00 0.50 1.00 1.50 2.00 2.50 3.00 3.50 4.00	1.15 3.80 2.56 EPS 2019Q1 2018 2017 Units:NT$ 0 200,000 400,000 600,000 800,000 1,000,000 1,200,000	Capital Units:NT$ thousand
		1,063,603 1,063,603 1,063,603
		2019Q1 2018 2017

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2019Q1 Sales Revenues by Type

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System
Storage Platform & PC
Other
16%
Application 2%
0%
Server
14% Peripheral
5%
Consulting/Mainte
nance Enterprise
Network
28%
26%
Application
Software
9%
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Revenue:13.93billion

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Compare Sales Revenues by Type

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450,000
400,000 385,769
363,019
355,739
350,000 331,569
300,000
245,935
250,000
223,860 219,900
197,542
200,000
150,000
123,063
100,000 76,218
62,849
49,208
50,000 32,708
11,550 11,710
3,819 0 2,001
0
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2019Q1 2018Q1 Revenue:13.93billion Revenue:13.04billion

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2019Q1 Sales Revenues by Industry

Revenue:13.93billion

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Telecommunications,
21%
Electronic
related(Including
Semiconductor),
Government 44%
education unit, 13%
Financial insurance,
6%
Other, 5%
Biomedical, 4%
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Transportation and traditional manufacturing, 7%

Quarterly revenue status

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1,600,000
1,400,000 1,392,630
1,306,018 1,303,830
1,200,000 28%
27% 1,116,252
32% 1,079,835
1,052,959
1,000,000 1,019,661 1,018,933
27% 952,064
31%
34%
37% 35%
800,000 32%
600,000
72%
72%
67%
400,000 72%
68%
63% 65% 64% 67%
200,000
0
2019Q1 2018Q4 2018Q3 2018Q2 2018Q1 2017Q4 2017Q3 2017Q2 2017Q1
Product Service Other Revenues
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Shareholder’s Meeting Information & Dividends Policy

※ 2019 Annual General Shareholder’s Meeting Date ： May 29 (Wednesday),2019 9:00AM Place ： No.282, Beida Rd. , Hsinchu City, Taiwan (R.O.C.) (The Third Credit Cooperative of Hsinchu on the 13[th] -floor conference center)

※Dividends in recent years(Cash dividends) Units:NT$	※Dividends in recent years(Cash dividends) Units:NT$	※Dividends in recent years(Cash dividends) Units:NT$	※Dividends in recent years(Cash dividends) Units:NT$	※Dividends in recent years(Cash dividends) Units:NT$	※Dividends in recent years(Cash dividends) Units:NT$
Year	2018	2017	2016	2015	2014
Amount	3.42	2.62	2.1	2	2
※Payout ratio in recent years Units:%
Year	2018	2017	2016	2015	2014
Ratio	90.0%	102.3%	93.3%	99.0%	99.5%

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Q & A Thank you!!