STARK — Interim / Quarterly Report 2022

Aug 4, 2022

Stark Technology Inc.(2480)

2022Q1 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

• 556+ 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 21%-35% company over the 8[th] Corporate Governance Evaluation

Year	Announce Results	STI Percentage	The evaluation results of the market value of more than 5 billion to 10 billion (NTD$)
2014(1st.)	The top 20%	6%-20%	NA
2015(2nd.)	The top 50%	6%-20%	NA
2016(3rd.)	100%	6%-20%	NA
2017(4th.)	100%	6%-20%	NA
2018(5th.)	100%	6%-20%	NA
2019(6th.)	100%	6%-20%	NA
2020(7th.)	100%	6%-20%	6%~10%
2021(8th.)	100%	21%-35%	11%-20%

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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

• DELL_2021 Best Hyperconverged Reseller Partner

• 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

• Veeam_FY21 Platinum Partner of the Year Award

• IBM_2021 BEST SELLING IN Storage Systems

• Hitachi Vantara_FY21 Best partner Award

• NetApp_FY20 Best partner Award

• NetApp_ FY21 Best Partner Award

• VMware_2020 Highest Growth Partner Award

• • VEEAM_FY20 Gold Partner of the Year Award

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Awards(Continued)

• Info. Security/ Data comm. Products

• Aruba_FY21 HPE Aruba Best Platinum partner of the Year

• CITRIX _ Best Application Delievery & Security Sales Partner

• Checkpoint_ 2021& 2021Best New Customer Development Partner

• 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

• Nutanix _2021 Distribution Partner Best Growth Award

• Nutanix _2021 Best Market Opportunity Development Award

• 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. 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

	2022/3/31	2022/3/31	2021/12/31	2021/12/31	2021/3/31	2021/3/31
Item	AMT	%	AMT	%	AMT	%
Cash and cash equivalents	1,730,816	**30% **	**1,450,910 **	**25% **	**1,331,897 **	24%
Accounts receivable(including contract assets)	694,325	12%	962,617	17%	889,614	15%
Inventories	**1,799,001 **	**31% **	**1,991,209 **	**34% **	**2,116,373 **	37%
Property,Plant and equipment	442,925	8%	446,238	8%	450,452	8%
Total Assets	5,770,508	**100% **	5,786,869	**100% **	5,694,378	100%
Current Liabilities	3,061,640	**53% **	2,665,481	**46% **	3,070,432	54%
Total Liabilities	3,164,175	**55% **	2,766,996	**48% **	3,176,244	56%
Equity	2,606,333	**45% **	3,019,873	**52% **	2,518,134	44%

Source: Market Observation Post System

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Income Statements Overview (Consolidated)

Units: NT$ thousand

	2022Jan.-Mar.	2022Jan.-Mar.	2021Jan.-Mar.	2021Jan.-Mar.
Item	AMT	%	AMT	%	YOY
Revenues	1,574,243	**100% **	1,444,341	100%	9.0%
Gross profit	403,917	26%	372,146	26%	8.5%
Operating expense	198,143	13%	197,323	14%	0.4%
Operating income	205,774	13%	174,823	12%	17.7%
Other income	14,457	1%	5,850	1%	147.1%
Pre-tax income	220,231	14%	180,673	13%	21.9%
Net income	182,395	12%	143,794	10%	26.8%
EPS(NT$)	1.71		1.35		26.7%

Source: Market Observation Post System

Note:China subsidiary’s revenue of consolidated: 2022Q1 2.01%;2021Q1 3.39%

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Consolidated Revenues

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Units: NT$ thousand
QoQ YoY
-20.8% 9.0%
2,500,000
1,988,530
2,000,000
1,574,243
1,444,341
1,500,000
1,000,000
500,000
0
2022Q1 2021Q4 2021Q1
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Consolidated Gross profit%

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QoQ
YoY
1.1pt
-0.1pt
26.0%
25.8%
25.8%
25.6%
25.7%
25.4%
25.2%
25.0%
24.8%
24.6%
24.6%
24.4%
24.2%
24.0%
23.8%
2022Q1 2021Q4 2021Q1
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Consolidated Operating expenses

Units: NT$ thousand

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QoQ YoY
-10.6%
0.4%
250,000
221,660
198,143
197,323
22,158
200,000
20,763 20,992
150,000
100,000 199,502
177,380 176,331
50,000
0
2022Q1 2021Q4 2021Q1
Administrative expenses Research and development expenses Operating expenses
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Consolidated Operating income

Units: NT$ thousand

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QoQ YoY
-22.9% 17.7%
300,000
267,060
250,000
205,774
200,000
174,823
150,000
100,000
50,000
0
2022Q1 2021Q4 2021Q1
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Consolidated Operating income%

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QoQ YoY
-0.3pt 1.0pt
14.0%
13.4%
13.5%
13.1%
13.0%
12.5%
12.0%
12.1%
11.5%
11.0%
2022Q1 2021Q4 2021Q1
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Consolidated Net income

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Units: NT$ thousand
QoQ YoY
-18.1% 26.8%
250,000
222,700
200,000
182,395
143,794
150,000
100,000
50,000
0
2022Q1 2021Q4 2021Q1
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Consolidated Net income%

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QoQ YoY
0.4pt 1.6pt
12.0%
11.6%
11.5%
11.0% 11.2%
10.5%
10.0%
10.0%
9.5%
9.0%
2022Q1 2021Q4 2021Q1
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Consolidated EPS

Units: NT$

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QoQ YoY
-18.2% 26.7%
3
2.09
2
1.71
2
1.35
1
1
0
2022Q1 2021Q4 2021Q1
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Sales Revenue & Net Income

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EPS & Capital

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	2022Q1	2021	2020
ROE	6.48	21.82	17.69

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Allocation of transaction price into unfulfilled contractual obligations

Units: NT$ thousand

	2020Q2	2020Q3	2020Q4	2021Q1	2021Q2	2021Q3	2021Q4	2022Q4
Allocation of transaction price into unfulfilled contractual obligations	3,854,491	4,513,783	4,469,378	5,056,884	5,260,427	5,363,829	5,470,427	6,070,815
Estimated Fulfill Ratio of2020/2021/2022	67.69%	28.54%	88.54%	84.53%	65.56%	36.13%	69.29%	64.16%
Estimated Fulfill Amount of2020/2021/2022	2,609,105	1,288,234	3,957,187	4,274,584	3,448,736	1,937,951	3,790,459	3,895,035
Estimated Fulfill Amount After2021/2022/2023	1,245,386	3,225,549	512,191	782,300	1,811,691	3,425,878	1,679,968	2,175,780

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Dividends Policy

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

※EPS in recentyears Year 2021 Amount 6.0	※EPS in recentyears Year 2021 Amount 6.0	2020 4.68	2019 4.2	2018 3.8	2017 2.56	Units:NT$ 2016 2015 2.25 2.02	Units:NT$ 2016 2015 2.25 2.02
※Payout ratio in recentyears						Units:%
Year	2021	2020	2019	2018	2017	2016	2015
Ratio	**93.7% **	**91.9% **	**106.0% **	**90.0% **	**102.3% **	**93.3% **	99.0%

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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2022Q1 Sales Revenues by Type

Revenue:1.574billion

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Comparison of Sales Revenues by Type

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Compare Sales Revenues by Type

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Revenue:1.574billion Revenue:1.444billion
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Unit:NT K$	2022Q1	2021Q1
Product Sales	1,092,518	966,369
Consulting /Maintenance	480,990	476,213
Other	735	1,759
Total	1,574,243	1,444,341

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2022Q1 Sales Revenues by Industry

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Revenue:1.574billion

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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!!