STARK — Interim / Quarterly Report 2021

Jun 3, 2021

Stark Technology Inc.(2480)

2021Q1 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

• 517+ Employees

• The largest domestic system integrator in Taiwan

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

• 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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Corporate Governance Evaluation

• Rated as Taiwan’s top 6% - 20% company over the 7[th] Corporate Governance Evaluation

• 2020/07 Included in the "Corporate Governance 100 Index“

Year	Announce Results	STI Percentage
2014(1st.)	The top 20%	6%-20%
2015(2nd.)	The top 50%	6%-20%
2016(3rd.)	100%	6%-20%
2017(4th.)	100%	6%-20%
2018(5th.)	100%	6%-20%
2019(6th.)	100%	6%-20%
2020(7th.)	100%	6%-20%	Note: The evaluation results of the market value of more than 5 billion to 10 billion (NTD$) are listed as 6%~10%

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Awards

• 2020/10 Won the two awards of “2020 Executive Performance Evaluation'' and “2020 Best Partner'' by Far EasTone Telecom

• 2019 Best Supplier of Taiwan Mobile and 2020 Best Supplier of Fubon Financial

• Fortinet _2019 Self-improvement Award

• Hitachi Vantara_FY19 Top Reseller of the Year

• VMware_2020 Highest Growth Partner Award

• HPE_FY20 Top Reseller of the Year

• Cisco_FY20 Rising Star Award

• Fujitsu_Best Select Partner of the Year 2019

• Lenovo_2020 Best Solution Sales Award

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Awards(Continued)

• IBM_2020 Best LinuxOne Breakout Award

• NetApp_FY20 Best partner Award

• HPE FY20 Best partner Award

• DELL_2020 Highest Growth Partner Award

• Palo Alto_FY21 Top Performer in Driving Business Growth

• VEEAM_FY20 Gold Partner of the Year Award

• Nutanix_FY20 Best Market Opportunity Development Award

• Fortinet_2020 Outstanding Regional Distribution Partner Award

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STI Service Network

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Sales Operation – by Industries

Sales BU Industr / Product / Re ion y g IBM products, High-tech industries, E-commerce, Finance, and BU1 Automobiles, the main area in Hsinchu and middle Taiwan. High-tech manufacturing, Defense, Military, and Traditional 、 BU2 production, Education, the main area in Hsinchu Taoyuan and South Taiwan Finance, insurance, telecommunications, small and medium enterprises, manufacturing in Taipei BU6 The public sector including government, medical care, and education. The main area in Tai ei and East Taiwan p Private telecommunications, film and television media, energy, BU8 water and electricity, the main area in Taipei BU9 Chun hwa Telecom g

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We’ve been worked and working on:

Cloud Services & Data Analytics Infrastructure

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Infrastructure
internet
Enterprises Enterprise/PC
Factories
Security Cloud
Big Data & Cable
Medical Enterprise Apps Computing Broadband
Cloud Cloud Home/PC
Data Integration
SmartTV
Deep Learning
Buyers, Analytics Mobile APP
4G/5G
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 Broadband/Cable Internet 、 、 、 Multi-Screens : PC NB/Pad Smartphone SmartTV

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Information Technologies

Portal Personalization Content Mgmt Single sign-on

eCommerce Vertical Apps. Professional Enterprise Apps OSS, VAS High Freq. Trade ERP,CRM,SCM IoT Services Probe/CEM by Trade MES, PLM AML (Environmental Monitoring) Travel Medical Gov’t MFG Telco FSI 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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、 AI (Machine Deep Learning)

Data Science Training Modeling Inference Who? : Auto ML Who? : AI Engineer Who? : End users . Rapid ML/DL modeling, . Process customization . Manpower constraint . ML/DL inference deployment

STI : ML, DL computing hardware/software framework integration

• 3[rd] party alliance : Industrial domain consultant, Semi-auto. Tool vendor

• AI Solution Consultant Auto ML  Stack holder lead project  IT lead project  End-to-end solution planning  Manpower constraint  DL@GPU  Time to deployment  Tech. staff training  min. data input, max.  Workload@CPU or @GPU

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(MSSP) Managed Security Service Provider

Global CTI Platform

Global CTI Platform Identity mgmt.@Cloud STI Security Gears Deployment VA@Cloud Security Services & Fine tuning - On Premise API Security@Cloud Security Services

API Security@Cloud

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Tel-Communication Technologies (5G)

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Small Cell

OTN/Metro OTN (5G Back-Haul) CWDM/NG-PON (5G Front-Haul)

IP Core Network Small Cell SD-WAN Gateway (Software-Defined WAN) (5G IP Core)

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Meet up 5G + MEC@AI@Cloud

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Smart City
GOV. Cloud
Cloud@CN
Medical AI @DL,ML EntertainmentA/R, V/R AI@DL,ML Training @Cloud
Autonomous Car
Cloud
Automobile
AI @DL,ML
Mobile APP
FSI Cloud
(Fintech, Blockchain) AI @DL,ML
AI @DL,ML IoT
MFG.
Automation
Industry 4.0
New Inference Feed
MEC : Multi-Access Edge Computing
Training
Data Feed
Non-MEC Services Non-MEC Services
Edge@RAN
MEC Services MEC Services
MEC Servers
Inference@Edge
BS1 BS2
New Inference Training
Feed Data Feed
Inference@End-Point
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Products & Solutions

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

Units:NT$ thousand

	2021/3/31	2021/3/31	2020/12/31	2020/12/31	2020/3/31	2020/3/31
Item	AMT	%	AMT	%	AMT	%
Cash and cash equivalents	**1,331,897 **	**24% **	**1,348,404 **	**24% **	1,534,311	30%
Accounts receivable(including contract assets)	889,614	**15% **	1,108,125	20%	817,203	16%
Inventories	2,116,373	**37% **	**1,957,859 **	**34% **	**1,454,592 **	29%
Property,Plant and equipment	450,452	8%	453,651	8%	450,891	9%
Total Assets	5,694,378	**100% **	5,743,047	**100% **	5,064,187	100%
Current Liabilities	3,070,432	**54% **	2,807,884	**49% **	2,505,671	50%
Total Liabilities	3,176,244	**56% **	2,914,035	**51% **	2,610,466	52%
Equity	2,518,134	**44% **	2,829,012	**49% **	2,453,721	48%

Source: Market Observation Post System

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Income Statements Overview (Consolidated)

Units: NT$ thousand

	2021Jan.-Mar.	2021Jan.-Mar.	2020 Jan.-Mar.	2020 Jan.-Mar.
Item	AMT	%	AMT	%	YOY
Revenues	1,444,341	**100% **	1,307,761	100%	10.4%
Gross profit	372,146	26%	332,841	26%	11.8%
Operating expense	197,323	14%	177,141	14%	11.4%
Operating income	174,823	12%	155,700	12%	12.3%
Other income	5,850	1%	10,885	1%	-46.3%
Pre-tax income	180,673	13%	166,585	13%	8.5%
Net income	143,794	10%	130,140	10%	10.5%
EPS(NT$)	1.35		1.22		10.7%

Source: Market Observation Post System

Note:China subsidiary’s revenue of consolidated: 2021Q1 3.39%;2020Q1 5.23%

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Consolidated Revenues

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QoQ
YoY Units: NT$ thousand
-8.2%
10.4%
1,800,000
1,573,932
1,600,000
1,444,341
1,400,000 1,307,761
1,200,000
1,000,000
800,000
600,000
400,000
200,000
0
2021Q1 2020Q4 2020Q1
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Consolidated Gross profit%

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QoQ
YoY
0.5pt
0.3pt
25.9%
25.8%
25.8%
25.7%
25.6%
25.5% 25.5%
25.4%
25.3%
25.3%
25.2%
25.1%
25.0%
2021Q1 2020Q4 2020Q1
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Consolidated Operating expenses

Units: NT$ thousand

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QoQ YoY
-22.1% 11.4%
300,000
253,261
250,000
25,470
197,323
200,000 177,141
20,992
22,723
150,000
227,791
100,000
176,331
154,418
50,000
0
2021Q1 2020Q4 2020Q1
Administrative expenses Research and development expenses Operating expenses
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Consolidated Operating income

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Units: NT$ thousand
QoQ YoY
20.7% 12.3%
200,000
174,823
180,000
155,700
160,000
144,893
140,000
120,000
100,000
80,000
60,000
40,000
20,000
0
2021Q1 2020Q4 2020Q1
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Consolidated Operating income%

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QoQ YoY
2.9pt 0.2pt
14.0%
12.1%
12.0%
11.9%
10.0%
9.2%
8.0%
6.0%
4.0%
2.0%
0.0%
2021Q1 2020Q4 2020Q1
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Consolidated Net income

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QoQ YoY Units: NT$ thousand
4.6% 10.5%
145,000 143,794
140,000
137,442
135,000
130,140
130,000
125,000
120,000
2021Q1 2020Q4 2020Q1
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Consolidated Net income%

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QoQ YoY
1.3pt 0pt
10.2%
10.0% 10.0% 10.0%
9.8%
9.6%
9.4%
9.2%
9.0%
8.8%
8.7%
8.6%
8.4%
8.2%
8.0%
2021Q1 2020Q4 2020Q1
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Consolidated EPS

Units: NT$

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QoQ YoY
4.7% 10.7%
1.40
1.35
1.35
1.30 1.29
1.25
1.22
1.20
1.15
2021Q1 2020Q4 2020Q1
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Sales Revenue & Net Income

Net Income

Units:NT$ thousand

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Sales Revenue Units:NT$
thousand
thousand 600,000
6,000,000
5,542,811 5,521,432
497,618
500,000
5,000,000 446,501
400,000
4,000,000
300,000
3,000,000
2,000,000 200,000
1,444,341 143,794
1,000,000 100,000
0 0
2021Q1 2020 2019 2021Q1 2020 2019
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EPS & Capital

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EPS
Units:NT$
Capital Units:NT$
5 4.68 thousand
1,200,000
4.5
4.20
1,063,603 1,063,603 1,063,603
4
1,000,000
3.5
3 800,000
2.5
600,000
2
1.35
1.5 400,000
1
200,000
0.5
0 0
2021Q1 2020 2019 2021Q1 2020 2019
2021Q1 2020 2019
ROE 5.38 17.69 16.42
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2021Q1 Sales Revenues by Type

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Peripheral PC
6% 1%
System Platform &
Application Server
10%
Consulting/Maintenance
Storage 33%
10%
Application Software
11%
Enterprise Network
29%
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Revenue:1.444billion

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Comparison of Sales Revenues by Type

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%		1%	1%
		6%	5% 5% 1% 1%
		10%	14% 13%
		10%	16% 16%
		11%
			13% 11%
		29%	24%
			23%
		33%	28% 29%
	2020Q1 2020 2020Q1 Consulting/Maintenance Enterprise Network Application Software Storage System Platform & Application Server Peripheral PC Other Project

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Compare Sales Revenues by Type

600,000

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500,000 476,213
417,173
382,744
400,000
317,306
300,000
205,009
200,000 155,470 173,718
146,658 145,134
153,404
84,035
100,000 62,853
16,385
11,152 1,759 3,087 0 0
0
Unit:NT K$ 2021Q1 2020Q1
Product
966,369 921,930
Sales
Consulting
476,213 382,744
/Maintenance
2021Q1 2020Q1 Other 1,759 3,087
Revenue:1.444billion Revenue:1.308billion Total 1,444,341 1,307,761
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2021Q1 Sales Revenues by Industry

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Transportation and Biomedical
Other
traditional manufacturing 2%
6%
7%
Financial insurance
9%
Electronic
related(Including
Semiconductor)
47%
Telecommunications
13%
Government education
unit
16%
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Revenue:1.444billion

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Comparison of Sales Revenues by Industry(Accumulated)

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100%
2% 2% 4%
6% 6%
7%
90%
7% 8%
8%
80% 9%
10%
10%
70%
13%
17%
20%
60%
16%
11%
50%
11%
40%
30%
47% 46%
20% 40%
10%
0%
2021Q1 2020Q4 2020Q1
Electronic related(Including Semiconductor) Government education unit Telecommunications
Financial insurance Transportation and traditional manufacturing Other
Biomedical
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Comparison of Sales Revenues by Region(Accumulated)

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100.0%
0.4%
1.2% 1.3%
98.0%
3.7%
4.6%
96.0%
5.7%
94.0%
92.0% 95.9%
94.2%
93.0%
90.0%
88.0%
2021Q1 2020 2020Q1
Taiwan China(Including HK) Other
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Quarterly revenue status

Units:NT$ thousand

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Shareholder’s Meeting Information & Dividends Policy

※2021 Annual General Shareholder’s Meeting Date ： May 28 (Friday),2021 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)

Credit Cooperative of Hsinchu on the 13th-floor conference center)	Credit Cooperative of Hsinchu on the 13th-floor conference center)	Credit Cooperative of Hsinchu on the 13th-floor conference center)	Credit Cooperative of Hsinchu on the 13th-floor conference center)	Credit Cooperative of Hsinchu on the 13th-floor conference center)	Credit Cooperative of Hsinchu on the 13th-floor conference center)	Credit Cooperative of Hsinchu on the 13th-floor conference center)	Credit Cooperative of Hsinchu on the 13th-floor conference center)
※Dividends in recentyears Units:NT$
Year	2020	2019	2018	2017	2016	2015	2014
Amount	4.3	4.45	3.42	2.62	2.1	2	2
※EPS in recentyears Units:NT$
Year	2020	2019	2018	2017	2016	2015	2014
Amount	4.68	4.2	3.8	2.56	2.25	2.02	2.01
※Payout ratio in recentyears Units:%
Year	2020	2019	2018	2017	2016	2015	2014
Ratio	**91.9% **	**106.0% **	**90.0% **	**102.3% **	**93.3% **	99.0%	99.5%

Note ： Payout ratio in year 2019 due to the adjustment of IFRSs to shareholders’ equity which can be part of distribution

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Q & A Thank you!!