STARK — Interim / Quarterly Report 2021

Aug 4, 2022

Stark Technology Inc.(2480)

2021Q4 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

• 558+ 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

• Awarded the 2021 Supplier Conference "Hand in Hand with Sustainability Pioneer-Best Partner" award by Far EasTone Telecom

• 2020 "Enterprise Human Resource Improvement Plan" by the Taozhumiao Branch of the Labor Development Agency of the Ministry of Labor

• Fubon Financial Holdings was named "Sustainable Performance Excellent Supplier" in 2021

• Chunghwa Telecom 2021 "Supplier Corporate Social Responsibility Information Disclosure Excellence Award"

• System Products

• HPE FY21 Best partner Award

• HPE FY21 Excellent distribution partner

• IBM_2020 Best LinuxOne Breakout Award

• Lenovo_2020 Best Solution Sales Award

• DELL_2020 Highest Growth Partner Award

• HPE_FY20 Best partner Award

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Awards(Continued)

• Storage Products

• NetApp_FY20 Best partner Award

• NetApp_ FY21 Best Partner Award

• VMware_2020 Highest Growth Partner Award

• VEEAM_FY20 Gold Partner of the Year Award

• Info. Security/ Data comm. Products

• Fortinet 2021 Excellence Award

• Cisco-FY21 Reseller of the Year

• MicroFocus 2021 Outstanding Contribution Award

• Cisco_FY20 Rising Star Award

• HPE Aruba _FY20 Best Platinum partner of the Year

• Fortinet_2020 Outstanding Regional Distribution Partner Award

• Palo Alto_FY21 Top Performer in Driving Business Growth

• Other Products

• INFINITIES_2021 Beat Distributor of the Year. Best Sales Award

• Nutanix_FY20 Best Market Opportunity Development Award

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STI Service Network

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8 branch offices in Taiwan
3 branch offices in China
1 branch offices in Vietnam
US STARK in San Jose
1 branch offices in Hong Kong
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Hong Kong
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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. Enterprise Apps Professional 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

Security Gears Deployment & Fine tuning - On Premise Security Services

STI Security Services

Identity mgmt.@Cloud

VA@Cloud

API Security@Cloud

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Tel-Communication Technologies (5G)

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IP Core Network

Small Cell

OTN/Metro OTN (5G Back-Haul)

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

CWDM/NG-PON (5G Front-Haul)

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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

	2021/12/31	2021/12/31	2020/12/31	2020/12/31	2019/12/31	2019/12/31
Item	AMT	%	AMT	%	AMT	%
Cash and cash equivalents	1,450,910	**25% **	**1,348,404 **	**24% **	1,567,177	30%
Accounts receivable(including contract assets)	962,617	**17% **	1,108,125	20%	874,148	17%
Inventories	1,991,209	**34% **	**1,957,859 **	**34% **	1,470,524	29%
Property,Plant and equipment	446,238	8%	453,651	8%	452,727	9%
Total Assets	**5,786,869 **	**100% **	5,743,047	**100% **	**5,113,720 **	100%
Current Liabilities	**2,665,481 **	**46% **	**2,807,884 **	**49% **	2,211,857	43%
Total Liabilities	2,766,996	**48% **	**2,914,035 **	**51% **	**2,315,992 **	45%
Equity	3,019,873	**52% **	2,829,012	**49% **	**2,797,728 **	55%

Source: Market Observation Post System

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Income Statements Overview (Consolidated)

Units: NT$ thousand

	2021Jan.-Dec.	2021Jan.-Dec.	2020 Jan.-Dec.	2020 Jan.-Dec.
Item	AMT	%	AMT	%	YOY
Revenues	6,579,554	**100% **	5,542,811	100%	18.7%
Gross profit	1,598,636	**24% **	1,377,627	25%	16.0%
Operating expense	838,103	13%	834,206	15%	0.5%
Operating income	760,533	11%	543,421	10%	40.0%
Other income	37,814	1%	57,088	1%	-33.8%
Pre-tax income	798,347	12%	600,509	11%	32.9%
Net income	**638,162 **	10%	497,618	9%	28.2%
EPS(NT$)	6.00		4.68		28.2%

Source: Market Observation Post System

Note:China subsidiary’s revenue of consolidated: 2021 3.0%;2020 4.3%

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Consolidated Revenues

0 500,000 1,000,000 1,500,000 2,000,000 2,500,000	1,988,530 1,628,067 1,573,932 2021Q4 2021Q3 2020Q4 QoQ 22.1% YoY 26.3% 5,000,000 5,200,000 5,400,000 5,600,000 5,800,000 6,000,000 6,200,000 6,400,000 6,600,000 6,800,000	Units: NT$ thousand YoY 18.7%
		6,579,554
		5542811
		,,
		2021 2020

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Consolidated Gross profit%

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QoQ YoY YoY
2.0pt -0.7pt -0.6pt
24.9%
24.9%
25.5% 25.3%
24.8%
25.0%
24.6%
24.7%
24.5%
24.6%
24.0%
24.5%
23.5%
23.0% 24.4%
22.5% 24.3% 24.3%
22.6%
22.0% 24.2%
21.5%
24.1%
21.0%
24.0%
2021Q4 2021Q3 2020Q4
2021 2020
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Consolidated Operating expenses

0 50,000 100,000 150,000 200,000 250,000 300,000	199,502 187,718 227,791 22,158 22,414 25,470 221,660 210,132 253,261 2021Q4 2021Q3 2020Q4 Research and development expenses Administrative expenses Operating expenses QoQ 5.5% YoY -12.5% 680,000 700,000 720,000 740,000 760,000 780,000 800,000 820,000 840,000 860,000	Units: NT$ thousand 747,063 740,530 91,040 93,676 838,103 834,206 2021 2020 Research and development expenses Administrative expenses Operating expenses YoY 0.5%

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Consolidated Operating income

Units: NT$ thousand

0 50,000 100,000 150,000 200,000 250,000 300,000	267,060 158,162 144,893 2021Q4 2021Q3 2020Q4 QoQ 68.9% YoY 84.3% 0 100,000 200,000 300,000 400,000 500,000 600,000 700,000 800,000	YoY 40.0%
		760,533
		543,421
		2021 2020

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Consolidated Operating income%

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QoQ YoY
YoY
3.7pt 4.2pt
1.8pt
16.0% 12.0%
11.6%
14.0% 13.4%
11.5%
12.0%
11.0%
10.0%
10.5%
9.7%
9.2%
8.0%
10.0%
6.0% 9.8%
9.5%
4.0%
9.0%
2.0%
0.0% 8.5%
2021Q4 2021Q3 2020Q4 2021 2020
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Consolidated Net income

0 50,000 100,000 150,000 200,000 250,000	222,700 137,145 137,442 2021Q4 2021Q3 2020Q4 QoQ 62.4% YoY 62.0% 0 100,000 200,000 300,000 400,000 500,000 600,000 700,000	Units: NT$ thousand 638,162 497,618 2021 2020 YoY 28.2%

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Consolidated Net income%

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QoQ YoY YoY
2.8pt 2.5pt 0.7pt
12.0% 9.8%
11.2% 9.7%
10.0% 9.6%
8.7%
8.0% 9.4%
8.4%
6.0% 9.2%
4.0% 9.0%
9.0%
2.0% 8.8%
0.0% 8.6%
2021Q4 2021Q3 2020Q4 2021 2020
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Consolidated EPS

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Units: NT$
QoQ YoY
62.0% 62.0% YoY
28.2%
2.50
7.00
2.09
6.00
6.00
2.00
5.00 4.68
1.50
1.29 1.29 4.00
1.00 3.00
2.00
0.50
1.00
0.00 0.00
2021Q4 2021Q3 2020Q4 2021 2020
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Sales Revenue & Net Income

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EPS & Capital

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	2021	2020	2019
ROE	21.82	17.69	16.42

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Allocation of transaction price into unfulfilled contractual obligations

Units: NT$ thousand

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	2020Q1	2020Q2	2020Q3	2020Q4	2021Q1	2021Q2	2021Q3	2021Q4
Allocation of transaction price into unfulfilled contractual obligations	3,728,084	3,854,491	4,513,783	4,469,378	5,056,884	5,260,427	5,363,829	5,470,427
Estimated Fulfill Ratio of2020/2021/2022	81.02%	67.69%	28.54%	88.54%	84.53%	65.56%	36.13%	69.29%
Estimated Fulfill Amount of2020/2021/2022	3,020,494	2,609,105	1,288,234	3,957,187	4,274,584	3,448,736	1,937,951	3,790,459
Estimated Fulfill Amount After2021/2022/2023	707,590	1,245,386	3,225,549	512,191	782,300	1,811,691	3,425,878	1,679,968

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Dividends Policy

Dividends in recent years ears Units:NT$ years Year 2021 2020 2019 2018 2017 2016 2015 Amount 5.62 4.3 4.45 3.42 2.62 2.1 2

※ Dividends in recent years

ears Units:NT$ years Year 2021 2020 2019 2018 2017 2016 2015 Amount 6.0 4.68 4.2 3.8 2.56 2.25 2.02

※ EPS in recent years

out ratio in recent yearsyearsears Units:% Year 2021 2020 2019 2018 2017 2016 2015 Ratio 93.7% 91.9% 106.0% 90.0% 102.3% 93.3% 99.0%

※ Payout ratio in recent yearsyearsears

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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2021 Sales Revenues by Type

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Revenue:6.580billion

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Comparison of Sales Revenues by Type

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Compare Sales Revenues by Type

Revenue:6.580billion Revenue:5.543billion	Unit:NT K$	2021	2020
	Product Sales	4,621,922	3,980,028
	Consulting /Maintenance	1,951,042	1,551,755
	Other	6,590	11,028
	Total	6,579,554	5,542,811

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2021 Sales Revenues by Industry

Revenue:6.580billion

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Comparison of Sales Revenues by Industry(Accumulated)

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Comparison of Sales Revenues by Region(Accumulated)

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Quarterly revenue status

Units:NT$ thousand

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Q & A Thank you!!