SUNON®

Stock Code : 2421

Sunonwealth Electric Machine Industry Co., Ltd.

2026 Annual General Shareholders’ Meeting Meeting Handbook

Printed on May 25, 2026

Company Website :
http://www.sunon.com

Taiwan Stock Exchange Market Observation Post System :
http://mops.twse.com.tw

Sunonwealth Electric Machine Industry Co., Ltd.
Agenda for the 2026 General Shareholders Meeting

Shareholders' meeting will be held by means of physical shareholders' meeting

I. Time: 9:00 a.m. May 25, 2026 (Monday)

II. Location: 9F, No. 266, Chenggong 1st Rd., Qianjin Dist., Kaohsiung City (Room D, 9F, Grand Hi-Lai Hotel)

III. Chairman's Speech:

IV. Matters to be Reported:

(I) The Company's 2025 Business Report.
(II) 2025 Audit Committee's Report.
(III) Report the 2025 allocation of remuneration for employees and directors.
(IV) Report the 2025 salary adjustment for entry-level employees.
(V) Report the execution of share repurchases.
(VI) Report the status of endorsements and guarantees.
(VII) Report the 2025 remuneration of individual directors.

V. Proposed Resolutions:

(I) 2025 Business Report and Financial Statements.
(II) 2025 earnings distribution proposal.

VI. Discussion Matters:

(I) Amendment of the Company's Procedures for Lending Funds to Others.

VII. Extraordinary Motions

VIII. Adjournment

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[Report items]

(I) The Company's 2025 Business Report. Please refer to page 41 to page 45 of the Handbook.

(II) The 2025 Audit Committee's Report. Please refer to page 46 of the Handbook.

(III) Report the 2025 allocation of remuneration for employees and directors.

The Company's earnings for 2025 (net profit before tax, prior to salary adjustments for entry-level employee and the remuneration for employees and directors) totaled NT$2,716,473,882. In accordance with Article 29 of the Articles of Incorporation, directors remuneration of NT$16,000,000 and employees remuneration of NT$64,000,000 shall be distributed in cash.

(IV) Report the 2025 salary adjustment for entry-level employees.

The Company's earnings for 2025 (net profit before tax, prior to salary adjustments for entry-level employee and the remuneration for employees and directors) totaled NT$2,716,473,882. In accordance with Article 29 of the Articles of Incorporation, NT$14,000,000 is allocated for entry-level employee salary adjustments.

(V) Report the execution of share repurchases. Please refer to page 47 of the Handbook.

(VI) Report the status of endorsements and guarantees.

As of December 31, 2025, the Company's total endorsement and guarantees for external parties were US$18,000,000 and RMB130,000,000.

(VII) Report the 2025 remuneration of individual directors.

Payment of remuneration to individual directors for 2025, including the details and amounts of individual compensation and remuneration policy. Please refer to page 48 to page 50 of the Handbook.

[Proposed Resolutions]

Agenda item #1 (Proposed by the Board of Directors)

Agenda: 2025 Business Report and Financial Statements.

Description:

I. The Company's Financial Statements for 2025 have been audited by the CPAs Kuo-Ming Li and Ling-Wen Huang of Crowe Horwath (TW). Please refer to page 7 to page 31 of the Handbook.

II. The aforementioned statements of final accounts and the Business Report have been reviewed by the Audit Committee.

III. Hereby be filed for resolution.

Resolution:

Agenda item #2 (Proposed by the Board of Directors)

Agenda: 2025 earnings distribution proposal.

Description:

I. The Company's net profit after tax in 2025 was NT$2,165,698,845 and total distributable earnings was NT$3,216,753,822. The Company plans to appropriate NT$1,498,968,180 as

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dividends for shareholders with NT$5.5 per share. All dividends shall be distributed in cash (calculated to the NTD and the remaining amounts below NT$1 will be rounded down). The sum of fractional amounts of less than NT$1 shall be tallied and transferred to the Employee Welfare Committee.

II. After the dividends are approved by the shareholders' meeting, the Chairman of the Board is authorized to establish the dividend record date, distribution date, and other related matters.

III. If the number of shares outstanding is affected by changes in the Company's share capital before the dividend record date for the distribution of earnings and causes changes in the shareholders' dividend rate, the Chairman of the Board is authorized to process the adjustments at his full discretion.

IV. Please refer to the table below for the earnings distribution statement

Undistributed earnings at the beginning of the period	1,376,660,991
Plus: After-tax net profit of 2025	2,165,698,845
Minus: Appropriation for statutory reserve	(216,416,844)
Minus: Appropriation for special earnings reserve	(107,658,765)
Minus: Other consolidated income (loss) (remeasurement in defined benefit plans in 2025)	(1,530,405)
Distributable earnings in current period	3,216,753,822
Minus: Distributed shareholder dividends - cash dividends of NT$5.5 per share (Note)	(1,498,968,180)
Undistributed retained earnings at the end of period	1,717,785,643

Note: Shareholder dividends: (273,443,669 issued shares –904,000 treasury shares)*NT$5.5 =NT$1,498,968,180

Chairman of the Board: Ching-Shen Hong

President: Ching-Shen Hong

Head of Accounting: William Li

V. Hereby be filed for resolution.

Resolution:

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[Discussion matters]

Agenda item #1 (Proposed by the Board of Directors)

Agenda: Amendment of the Company's Procedures for Lending Funds to Others.

Description:

I. In accordance with the Company's operational needs, the Company's Procedures for Lending Funds to Others have been amended.

II. The amendment comparison table for the Company's Procedures for Lending Funds to Others is as follows:

Content	After Amendment	Before Amendment	Reason for Amendment
Article 2	Objects and Assessment Standards for Lending Funds
In accordance with the Company Act, the Company's funds shall not be lent to shareholders or any other parties, except in the following circumstances:
(1) Companies or firms that have business dealings with the Company; the term "business dealings" refers to entities with which the Company engages in purchases, sales, or contracts related to its business operations. The lending period for such funds is not subject to the one-year restriction.
(Omitted below)	Objects and Assessment Standards for Lending Funds
In accordance with the Company Act, the Company's funds shall not be lent to shareholders or any other parties, except in the following circumstances:
(1) Companies or firms that have business dealings with the Company; the term "business dealings" refers to entities with which the Company engages in purchases or sales.
(Omitted below)	In response to the Company's operational needs.
Article 3	Total Amount and Individual Limits for Lending Funds
The total financing amount shall not exceed 40% of the net worth of the funded enterprise, which can be divided into the following two scenarios:	Total Amount and Individual Limits for Lending Funds
The total financing amount shall not exceed 40% of the net worth of the funded enterprise, which can be divided into the following two scenarios:	In response to the Company's operational needs.

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	(1) For funds lent to companies or firms with business dealings, the total lending amount shall not exceed 20% of the Company's net worth; and the individual lending amount shall not exceed the purchase or sales amount between the two parties in the most recent year, or the contract amount already signed in accordance with the business operations. (Omitted below)	(1) For funds lent to companies or firms with business dealings, the total lending amount shall not exceed 20% of the Company's net worth; and the individual lending amount shall not exceed the amount of business dealings between the two parties in the most recent year. The term "business dealings amount" refers to the higher of the purchase or sales amount between the two parties. (Omitted below)
Article 12	This procedure was established on June 3, 2003, [omitted], with the sixth amendment on June 19, 2019, and the seventh amendment on May 25, 2026.	This procedure was established on June 3, 2003, [omitted], and the sixth amendment on June 19, 2019.	Added the amendment date.

III. Hereby be filed for resolution.
Resolution:

[Extraordinary motions]

Sunonwealth Electric Machine Industry Co., Ltd.
Statement of Shares Held by Directors
(March 27, 2026)

Title	Name	Appointment date	Term	Number of shares currently held
				Number of shares	Shareholding ratio
Chairman of the Board	Yo Yuan Investment Co., Ltd. Representative: Ching-Shen Hong	2024.6.14	3 years	15,837,288	5.52%
Director	Yo Yuan Investment Co., Ltd. Representative: Li-Ju Chen
Director	Yo Yuan Investment Co., Ltd. Representative: Ling-Wen Huang
Director	Yo Yuan Investment Co., Ltd. Representative: Fu-Sheng Huang
Director	Nice Enterprise Co., Ltd. Representative: Ching-Liang Chen	2024.6.14	3 years	4,155,668	1.45%
Independent Director	Kuang-Chih Huang	2024.6.14	3 years	-	-
Independent Director	Chi-Shan Hung	2024.6.14	3 years	-	-
Independent Director	Chin-Cheng Kao	2024.6.14	3 years	-	-
Independent Director	Te-Tsai Lu	2024.6.14	3 years	-	-
Shareholdings required of all Directors	12,000,000	Shareholdings of all Directors	19,992,956
---	---	---	---

Book closure date: 2026/3/27

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REPRESENTATION LETTER

The entities that are required to be included in the combined financial statements of Sunonwealth Electric Machine Industry Co., Ltd. as of and for the year ended December 31, 2025 under the “Criteria Governing the Preparation of Affiliation Reports, Consolidated Business Reports and Consolidated Financial Statements of Affiliated Enterprises” are the same as those included in the consolidated financial statements prepared in conformity with the International Financial Reporting Standards No.10, “Consolidated Financial Statements.” In addition, the information required to be disclosed in the combined financial statements is included in the consolidated financial statements. Consequently, Sunonwealth Electric Machine Industry Co., Ltd. and Subsidiaries do not prepare a separate set of combined financial statements.

Very truly yours,

Sunonwealth Electric Machine Industry Co., Ltd.

By
Ching-Shen Hong
Chairman

March 5, 2026

Crowe

國富浩華聯合會計師事務所

Crowe (TW) CPAs

80250 高雄市苓雅區四維三路6號27樓之1

27F-1., No.6, Siwei 3rd Rd.,

Lingya Dist.,

Kaohsiung City 80250, Taiwan

Tel +886 7 3312133

Fax +886 7 3331710

www.crowe.tw

INDEPENDENT AUDITORS' REPORT

The Board of Directors and Shareholders

Sunonwealth Electric Machine Industry Co., Ltd.

Opinion

We have audited the accompanying consolidated balance sheets of Sunonwealth Electric Machine Industry Co., Ltd. and its subsidiaries (the "Group") as of December 31, 2025 and 2024, and the related consolidated statements of comprehensive income, changes in equity and cash flows for the years then ended, and the notes to the consolidated financial statements, including a summary of significant accounting policies.

In our opinion, based on our audits and the report of the other independent accountants, as described in the other matters section of our report, the accompanying consolidated financial statements present fairly, in all material respects, the consolidated financial position of the Group as of December 31, 2025 and 2024, and its consolidated financial performance and its consolidated cash flows for the years then ended in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers and the International Financial Reporting Standards (IFRS), International Accounting Standards (IAS), IFRIC Interpretations (IFRIC), and SIC Interpretations (SIC) endorsed and issued into effect by the Financial Supervisory Commission of the Republic of China.

Basis for Opinion

We conducted our audits in accordance with the Regulations Governing Financial Statement Audit and Attestation Engagements of Certified Public Accountants and the Standards on Auditing of the Republic of China. Our responsibilities under those standards are further described in the Auditors' Responsibilities for the Audit of the Consolidated Financial Statements section of our report. We are independent of the Group in accordance with the Norm of Professional Ethics for Certified Public Accountant of the Republic of China and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion base on the result that we audited and the audit reports of other accountants.

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Crowe

Key Audit Matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the consolidated financial statements for the year ended December 31, 2025. These matters were addressed in the context of our audit of the consolidated financial statements as a whole, and in forming our opinion thereon, we do not provide a separate opinion on these matters.

Key audit matters of the Group’s consolidated financial statements for the year ended December 31, 2025 are stated as follows:

Valuation of inventory

Please refer to Note 4(8) to the consolidated financial statements for the accounting policy of inventories, Note 5(2)G for critical accounting judgments, estimates and key sources of assumption uncertainty of inventories, and Note 6(4) for inventory valuation.

Description of key audit matter:

As of December 31, 2025, inventory was $2,423,976 thousand and accounted for 13.9% of the total assets. Due to rapid changes in technology may lead to write-downs of slow-moving inventories to their net realizable values. As uncertainty exists in management’s judgment when the determining the loss on inventory, the valuation of inventory has been identified as a key audit matter.

How the matter was addressed in our audit:

In relation to the key audit matter above, our principal audit procedures included the understanding of the feature of the product and the inventory aging to confirm the appropriateness of the inventory evaluation method, testing the book value of the inventory to assess the rationality of the change in the impairment loss of the inventory, obtaining the inventory status of the Group and compare the actual write-offs of the past to assess the appropriateness of the valuation for obsolescent and damaged inventories.

Revenue recognition

Please refer to Note 4(20) to the consolidated financial statements for the accounting policy of revenue recognition, Note 5(1)B and Note 5(2)A for critical accounting judgements, estimates and key sources of assumption uncertainty of revenue recognition, and Note 6 (23) for the description of revenue recognition.

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Crowe

Description of key audit matter:

The Group’s sales revenue is easily influenced by various factors such as the industry boom and market environment, and has a significant impact on the utilization rate of the Group (the levy of idle capacity loss), inventory risk and cash flow. Consequently, this is one of the key areas our audit focused on.

How the matter was addressed in our audit:

In relation to the key audit matter above, our principal audit procedures included testing the Group’s controls surrounding revenue recognition, inspecting customer orders and performing a test of revenue transactions which incurred within a certain period before or after the balance sheet date.

Other Matters

As described in Note 4(3) to the consolidated financial statements, we didn’t audit the financial statements of certain subsidiaries. The financial statements of the subsidiaries were audited by the other auditors. Therefore, our opinion, insofar as it relates to the amounts and information disclosed, is solely based on the report of the other auditors. The figures as to these subsidiaries’ total assets amounted to $504,928 thousand and $503,750 thousand, representing 2.90% and 3.36% of the consolidated assets, and their total liabilities amounted to $273,018 thousand and $255,170 thousand, representing 3.20% and 3.61% of the consolidated liabilities as of December 31, 2025 and 2024, respectively; their total revenues amounted $648,350 thousand and $653,426 thousand, representing 3.47% and 4.47% of the consolidated revenue, and their total comprehensive income amounted to ($16,670) thousand and ($11,103) thousand, representing (0.81%) and (0.67%) of the consolidated comprehensive income for the years ended December 31, 2025 and 2024, respectively. In addition, as described in Note 6(8) to the consolidated financial statements, the financial statements of investments accounted for using equity method were audited by the other auditors. The carrying value of these investments amounted to $42,561 thousand and $17,676 thousand, representing 0.24% and 0.12% of the consolidated assets as of December 31, 2025 and 2024, and share of profit (loss) of these associates accounted for using equity method amounted to ($4,083) thousand and ($6,590) thousand, representing (0.15%) and (0.33%) of the consolidated income before income tax for the year ended December 31, 2025 and 2024, respectively. Also, share of other comprehensive income of these associates accounted for using equity method amounted to both $0 thousand, representing both 0% of total consolidated comprehensive income for the year ended December 31, 2025 and 2024.

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Crowe

We have also audited the parent company only financial statements of Sunonwealth Electric Machine Industry Co., Ltd. as of and for the years ended December 31, 2025 and 2024 on which we have issued an unmodified opinion including in the other matter paragraph.

Responsibilities of Management and Those Charged with Governance for the Consolidated Financial Statements

Management is responsible for the preparation and fair presentation of the consolidated financial statements in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers and the IFRS, IAS, IFRIC, and SIC endorsed and issued into effect by the Financial Supervisory Commission of the Republic of China, and for such internal control as management determines is necessary to enable the preparation of consolidated financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the consolidated financial statements, management is responsible for assessing the Group's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Group or to cease operations, or has no realistic alternative but to do so.

Those charged with governance (inclusive of the Audit Committee) are responsible for overseeing the Group's financial reporting process.

Auditors' Responsibilities for the Audit of the Consolidated Financial Statements

Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditors' report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with the Standards on Auditing of the Republic of China will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these consolidated financial statements.

As part of an audit in accordance with the Standards on Auditing of the Republic of China, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:

Crowe

Identify and assess the risks of material misstatement of the consolidated financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Group's internal control.
Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.
Conclude on the appropriateness of management's use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Group's ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in Our auditors' report to the related disclosures in the consolidated financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditors' report. However, future events or conditions may cause the Group to cease to continue as a going concern.
Evaluate the overall presentation, structure and content of the consolidated financial statements, including the disclosures, and whether the consolidated financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the Group to express an opinion on the consolidated financial statements. We are responsible for the direction, supervision and review of the work performed by the group engagement team members, and for forming the group audit opinion.

We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.

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Crowe

We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.

From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the consolidated financial statements for the year ended December 31, 2025 and are therefore the key audit matters. We describe these matters in our auditors’ report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.

The engagement partners on the audit resulting in this independent auditors’ report are Kuo Ming Li and Ling Wen Huang.

CROWE (TW) CPAs
Kaohsiung, Taiwan (Republic of China)
March 5, 2026

Notice to Readers

The accompanying consolidated financial statements are intended only to present the consolidated financial position, financial performance and cash flows in accordance with accounting principles and practices generally accepted in the Republic of China and not those of any other jurisdictions. The standards, procedures and practices to audit such consolidated financial statements are those generally accepted and applied in the Republic of China.

For the convenience of readers, the independent auditors’ report and the accompanying consolidated financial statements have been translated into English from the original Chinese version prepared and used in the Republic of China. If there is any conflict between the English version and the original Chinese version or any difference in the interpretation of the two versions, the Chinese-language independent auditors’ report and consolidated financial statements shall prevail.

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SUNONWEALTH ELECTRIC MACHINE INDUSTRY CO., LTD. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(In Thousands of New Taiwan Dollars)

Assets	Note	December 31, 2025		December 31, 2024
		Amount	%	Amount	%
CURRENT ASSETS
Cash and cash equivalents	6(1)	$5,256,400	30.1	$4,678,438	31.2
Notes receivable, net	6(2)	62,103	0.4	5,749	-
Accounts receivable, net	6(3)	5,155,351	29.6	4,097,028	27.3
Other receivables		195,051	1.1	144,504	1.0
Current tax assets		387	-	18,624	0.1
Inventories	6(4)	2,423,976	13.9	2,180,914	14.6
Prepayments		100,030	0.6	84,871	0.6
Other financial assets - current	6(5)	-	-	228,041	1.5
Total current assets		13,193,298	75.7	11,438,169	76.3
NONCURRENT ASSETS
Current financial assets at fair value through profit or loss - noncurrent	6(6)	-	-	173,170	1.2
Financial assets at fair value through other comprehensive income or loss - noncurrent	6(7)	30,095	0.2	31,549	0.2
Investments accounted for using equity method	6(8)	42,561	0.2	17,676	0.1
Property, plant and equipment	6(9)	3,053,538	17.5	2,460,697	16.4
Right-of-use assets	6(10)	737,278	4.2	617,290	4.1
Investment properties, net	6(11)	84,004	0.5	84,371	0.6
Intangible assets	6(12)	62,676	0.4	53,211	0.4
Deferred income tax assets	6(29)	131,059	0.8	93,367	0.6
Refundable deposits		31,039	0.2	21,428	0.1
Other non-current assets - other		60,980	0.3	7,433	-
Total noncurrent assets		4,233,230	24.3	3,560,192	23.7
TOTAL ASSETS		$17,426,528	100.0	$14,998,361	100.0
Liabilities and Equity
---	---	---	---	---	---
CURRENT LIABILITIES
Short-term loans	6(13)	$469,518	2.7	$927,601	6.2
Contract liabilities - current	6(23)	164,903	0.9	109,304	0.7
Notes payable		40,123	0.2	28,095	0.2
Accounts payable	7	4,530,263	26.1	3,434,772	22.9
Other payables	6(14) * 7	1,453,969	8.3	1,152,199	7.7
Current tax liabilities		263,982	1.5	164,177	1.1
Provisions - current	6(15)	68,346	0.4	61,697	0.4
Lease liabilities - current	6(10)	81,393	0.5	82,041	0.6
Current portion of long-term loans	6(17)	116,534	0.7	122,333	0.8
Total current liabilities		7,189,031	41.3	6,082,219	40.6

		December 31, 2025		December 31, 2024
Liabilities and Equity	Note	Amount	%	Amount	%
NONCURRENT LIABILITIES
Long-term loans	6(17)	612,500	3.4	478,426	3.2
Deferred income tax liabilities	6(29)	464,049	2.7	384,761	2.5
Lease liabilities - noncurrent	6(10)	259,304	1.5	113,168	0.8
Net defined benefit liabilities - noncurrent	6(18)	13,679	0.1	18,148	0.1
Guarantee deposits		878	-	1,377	-
Total noncurrent liabilities		1,350,410	7.7	995,880	6.6
Total Liabilities		8,539,441	49.0	7,078,099	47.2
EQUITY
Share capital	6(18)
Ordinary shares		2,734,437	15.7	2,734,437	18.2
Capital surplus	6(19)	1,518,788	8.7	1,518,788	10.1
Retained earnings	6(20)
Legal reserve		1,278,634	7.3	1,129,127	7.5
Special reserve		136,662	0.8	300,185	2.0
Unappropriated earnings		3,540,830	20.3	2,374,387	15.9
Other equity	6(21)	(244,321)	(1.4)	(136,662)	(0.9)
Treasury shares	6(22)	(77,943)	(0.4)	-	-
Total equity attributable to owners of the parent		8,887,087	51.0	7,920,262	52.8
NON-CONTROLLING INTERESTS		-	-	-	-
Total equity		8,887,087	51.0	7,920,262	52.8
TOTAL LIABILITIES AND EQUITY		$17,426,528	100.0	$14,998,361	100.0

SUNONWEALTH ELECTRIC MACHINE INDUSTRY CO., LTD. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(In Thousands of New Taiwan Dollars, Except Earnings Per Share)

	Note	Year Ended December 31
		2025		2024
		Amount	%	Amount	%
OPERATING REVENUES	6(23)	$18,677,810	100.0	$14,623,817	100.0
OPERATING COSTS	6(4)	(12,876,422)	(68.9)	(10,467,118)	(71.6)
GROSS PROFIT		5,801,388	31.1	4,156,699	28.4
OPERATING EXPENSES
Sales and marketing		(1,084,502)	(5.8)	(878,141)	(6.0)
General and administrative		(819,999)	(4.4)	(705,755)	(4.8)
Research and development		(1,082,326)	(5.8)	(892,634)	(6.1)
Expected credit gain (loss)	6(3)	(5,324)	-	(3,498)	-
Total operating expenses		(2,992,151)	(16.0)	(2,480,028)	(16.9)
INCOME FROM OPERATIONS		2,809,237	15.1	1,676,671	11.5
NON-OPERATING INCOME AND EXPENSES
Interest revenue	6(25)	111,175	0.6	132,177	0.9
Other income	6(26)	257,095	1.4	162,378	1.1
Other gains and losses	6(27)	(335,887)	(1.9)	54,415	0.4
Finance costs	6(28)	(40,657)	(0.2)	(37,317)	(0.3)
Share of loss of associates and joint ventures		(4,083)	-	(6,590)	-
accounted for using equity method
Total non-operating income and expenses		(12,357)	(0.1)	305,063	2.1
INCOME BEFORE INCOME TAX		2,796,880	15.0	1,981,734	13.6
INCOME TAX EXPENSE	6(29)	(631,181)	(3.4)	(489,641)	(3.4)
NET INCOME		2,165,699	11.6	1,492,093	10.2
OTHER COMPREHENSIVE INCOME (LOSS)	6(30)
Items that will not be reclassified subsequently to profit or loss:
Remeasurement of defined benefit obligation		(1,913)	-	3,714	-
Unrealized gain (loss) on investments in equity instruments at fair value through other comprehensive income		(758)	-	4,206	-
Income tax benefit related to items that will not be reclassified subsequently		383	-	(743)	-
Total items that will not be reclassified subsequently to profit or loss		(2,288)	-	7,177	-
Items that may be reclassified subsequently to profit or loss:
Exchange differences on translation of foreign operations		(133,626)	(0.7)	199,146	1.4
Income tax (expense) benefit related to items that may be reclassified subsequently to profit or loss		26,725	0.1	(39,829)	(0.3)
Total items that may be reclassified subsequently to profit or loss		(106,901)	(0.6)	159,317	1.1
Total other comprehensive loss, net of income tax		(109,189)	(0.6)	166,494	1.1
TOTAL COMPREHENSIVE INCOME		$ 2,056,510	11.0	$ 1,658,587	11.3
PROFIT (LOSS), ATTRIBUTABLE TO:
Parent company owner (net profit/loss)		$ 2,165,699	11.6	$ 1,492,093	10.2
Non-controlling interest (net profit/loss)		-	-	-	-
		$ 2,165,699	11.6	$ 1,492,093	10.2
TOTAL COMPREHENSIVE PROFIT OR LOSS IS ATTRIBUTABLE TO :
Parent company owner (comprehensive profit and loss)		$ 2,056,510	11.0	$ 1,658,587	11.3
Non-controlling interest (comprehensive profit and loss)		-	-	-	-
		$ 2,056,510	11.0	$ 1,658,587	11.3
EARNINGS PER SHARE
Basic	6(31)	$7.94		$5.46
Diluted	6(31)	$7.93		$5.45

The accompanying notes are an integral part of the parent company only financial statements.

-16-

SUNONWEALTH ELECTRIC MACHINE INDUSTRY CO., LTD. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

(In Thousands of New Taiwan Dollars)

	Equity Attributable to Shareholders of the Parent
	Capital Stock			Retained Earnings			Other		Taxesury shares	Total	Non-controlling Interests	Total Equity
	Odinary Shares	Certificate of Bond Exchange Rights	Capital Surplus	Legal Reserve	Special Reserve	Unappropriated Earnings	Unrealized Gain (Loss) on Financial Assets at Fair Value Through Other Comprehensive income	Other Comprehensive Income
BALANCE AT JANUARY 1, 2024	$2,725,243	$9,194	$1,518,788	$995,720	$257,757	$2,012,211	($305,248)	$5,063	$ -	$7,218,728	$ -	$7,218,728
Appropriations and distributions of prior years' earnings:
Legal reserve	-	-	-	133,407	-	(133,407)	-	-	-	-	-	-
Special reserve	-	-	-	-	42,428	(42,428)	-	-	-	-	-	-
Cash dividends	-	-	-	-	-	(957,053)	-	-	-	(957,053)	-	(957,053)
Net income in 2024	-	-	-	-	-	1,492,093	-	-	-	1,492,093	-	1,492,093
Other comprehensive income (loss) in 2024, net of income tax	-	-	-	-	-	2,971	159,317	4,206	-	166,494	-	166,494
Total comprehensive income in 2024	-	-	-	-	-	1,495,064	159,317	4,206	-	1,658,587	-	1,658,587
Bond conversion entitlement certificate	9,194	(9,194)	-	-	-	-	-	-	-	-	-	-
Increase (decrease) in non-controlling interests	-	-	-	-	-	-	-	-	-	-	-	-
BALANCE AT DECEMBER 31, 2024	2,734,437	-	1,518,788	1,129,127	300,185	2,374,387	(145,931)	9,269	-	7,920,262	-	7,920,262
Appropriations and distributions of prior years' earnings:
Legal reserve	-	-	-	149,507	-	(149,507)	-	-	-	-	-	-
Cash dividends	-	-	-	-	-	(1,011,742)	-	-	-	(1,011,742)	-	(1,011,742)
Special reserve	-	-	-	-	(163,523)	163,523	-	-	-	-	-	-
Net income in 2025	-	-	-	-	-	2,165,699	-	-	-	2,165,699	-	2,165,699
Other comprehensive income (loss) in 2025, net of income tax	-	-	-	-	-	(1,530)	(106,901)	(758)	-	(109,189)	-	(109,189)
Total comprehensive income in 2025	-	-	-	-	-	2,164,169	(106,901)	(758)	-	2,094,510	-	2,094,510
Repurchase cost of treasury shares	-	-	-	-	-	-	-	-	(77,943)	(77,943)	-	(77,943)
BALANCE AT DECEMBER 31, 2025	$2,734,437	$ -	$1,518,788	$1,278,634	$136,662	$3,540,830	($252,832)	$8,511	($77,943)	$8,887,087	$ -	$8,887,087

The accompanying notes are an integral part of the consolidated financial statements.

-18-

SUNONWEALTH ELECTRIC MACHINE INDUSTRY CO., LTD. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In Thousands of New Taiwan Dollars)

	Year Ended December 31
	2025	2024
CASH FLOWS FROM OPERATING ACTIVITIES
Income before income tax	$ 2,796,880	$ 1,981,734
Adjustments :
Adjustments to reconcile profit (loss)
Depreciation	463,876	412,906
Amortization	86,025	81,659
Expected credit loss (gain)	5,324	3,498
Net loss (gain) on financial assets and liabilities at fair value through profit or loss	173,170	(12,920)
Interest expense	40,657	37,317
Interest income	(111,175)	(132,177)
Dividend Income	(217)	-
Share of loss (gain) of associates and joint ventures accounted for using equity method	4,083	6,590
Loss (gain) on disposal and retirement of property, plant and equipment	6,178	10,947
Transfer of property, plant and equipment to expenses	5,001	179
Loss (gain) on disposal of other assets	-	(39)
Total adjustments to reconcile profit and loss	672,922	407,960
Net changes in operating assets and liabilities
Decrease (increase) in notes receivable	(56,354)	24,341
Decrease (increase) in accounts receivable	(1,063,604)	(1,051,379)
Decrease (increase) in other receivables	(27,162)	(38,073)
Decrease (increase) in inventories	(241,485)	(132,764)
Decrease (increase) in prepayments	(56,753)	(42,414)
Decrease (increase) in other financial assets	228,041	(11,280)
Total changes in operating assets	(1,217,317)	(1,251,569)
Net changes in operating liabilities
Increase (decrease) in contract liabilities	55,599	(236)
Increase (decrease) in notes payable	12,028	(2,972)
Increase (decrease) in accounts payable	1,095,491	697,760
Increase (decrease) in other payables	239,438	155,957
Increase (decrease) in provisions	6,843	7,627
Increase (decrease) in advance receipts	-	(571)
Increase (decrease) in net defined benefit liabilities	(6,382)	(6,869)
Total changes in operating liabilities	1,403,017	850,696
Total net changes in operating assets and liabilities	185,700	(400,873)
Total adjustments	858,622	7,087

	Year Ended December 31
	2025	2024
Cash generated from operations	$3,655,502	$1,988,821
Interest received	125,205	126,516
Dividends received	217	-
Interest paid	(42,445)	(36,345)
Income tax paid	(445,006)	(397,223)
Net cash generated from operating activities	3,293,473	1,681,769
CASH FLOWS FROM INVESTING ACTIVITIES
Acquisition of financial assets at fair value through profit or loss	-	(160,250)
Acquisition of investments accounted for using equity method	(31,129)	(2,279)
Proceeds from capital reduction of investee accounted for using equity method	1,802	-
Acquisition of property, plant and equipment	(953,149)	(513,017)
Proceeds from disposal of property, plant and equipment	509	-
Increase in refundable deposits	(9,611)	(467)
Decrease in other receivables	(37,415)	-
Acquisition of intangible assets	(23,652)	(57,309)
Increase in other noncurrent assets	(62,010)	(11,344)
Other investing activities	652	-
Net cash used in investing activities	(1,114,003)	(744,666)
CASH FLOWS FROM FINANCING ACTIVITIES
Increase in short-term loans	-	470,020
Decrease in short-term loans	(458,083)	-
Proceeds from long-term loans	128,275	205,053
Increase in guarantee deposits	-	538
Decrease in guarantee deposits	(499)	-
Repayments of lease principal	(99,083)	(129,033)
Cash dividends paid	(1,011,742)	(957,053)
Cost of Treasury Stock	(77,943)	-
Net cash generated from (used in) financing activities	(1,519,075)	(410,475)
EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH	(82,433)	(120,924)
EQUIVALENTS
NET INCREASE (DECREASE) IN CASH AND CASH	577,962	647,552
EQUIVALENTS
CASH AND CASH EQUIVALENTS - BEGINNING	4,678,438	4,030,886
OF YEAR
CASH AND CASH EQUIVALENTS - END OF YEAR	$5,256,400	$4,678,438
The accompanying notes are an integral part of the parent company only financial statements.

Crowe

國富浩華聯合會計師事務所

Crowe (TW) CPAs

80250 高雄市苓雅區四維三路6號27樓之1

27F-1., No.6, Siwei 3rd Rd.,

Lingya Dist.,

Kaohsiung City 80250, Taiwan

Tel +886 7 3312133

Fax +886 7 3331710

www.crowe.tw

INDEPENDENT AUDITORS' REPORT

The Board of Directors and Shareholders

Sunonwealth Electric Machine Industry Co., Ltd.

Opinion

We have audited the accompanying parent company only balance sheets of Sunonwealth Electric Machine Industry Co., Ltd. (the “Company”) as of December 31, 2025 and 2024, and the parent company only statements of comprehensive income, changes in equity and cash flows for the years then ended, and the notes to the parent company only financial statements, including a summary of significant accounting policies.

In our opinion, based on our audits and the report of the other independent accountants, as described in the other matters section of our report, the accompanying parent company only financial statements present fairly, in all material respects, the parent company only financial position of the Company as of December 31, 2025 and 2024, and its parent company only financial performance and its parent company only cash flows for the years then ended in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers.

Basis for Opinion

We conducted our audits in accordance with the Regulations Governing Financial Statement Audit and Attestation Engagements of Certified Public Accountants and the Standards on Auditing of the Republic of China. Our responsibilities under those standards are further described in the Auditors’ Responsibilities for the Audit of the parent company only Financial Statements section of our report. We are independent of the Company in accordance with the Norm of Professional Ethics for Certified Public Accountant of the Republic of China and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion base on the results that we audit and the audit report of other accountants.

-20-

Crowe

Key Audit Matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the parent company only financial statements for the year ended December 31, 2025. These matters were addressed in the context of our audit of the parent company only financial statements as a whole, and in forming our opinion thereon, we do not provide a separate opinion on these matters.

Key audit matters of the Company’s parent company only financial statements for the year ended December 31, 2025 are stated as follows:

Valuation of inventory

Please refer to Note 4(7) to the parent company only financial statements for the accounting policy of inventories, Note 5(2)G for critical accounting judgments, estimates and key sources of assumption uncertainty of inventories, and Note 6(4) for inventory valuation.

Description of key audit matter:

As of December 31, 2025, inventory was $1,027,612 thousand and accounted for 7.0% of the total assets. Due to rapid changes in technology may lead to write-downs of slow-moving inventories to their net realizable values. As uncertainty exists in management’s judgment when the determining the loss on inventory, the valuation of inventory has been identified as a key audit matter.

How the matter was addressed in our audit:

In relation to the key audit matter above, our principal audit procedures included the understanding of the feature of the product and the inventory aging to confirm the appropriateness of the inventory evaluation method; testing the book value of the inventory to assess the rationality of the change in the impairment loss of the inventory, obtaining the inventory status of the Company and compare the actual write-offs of the past to assess the appropriateness of the valuation for obsolescent and damaged inventories.

Revenue recognition

Please refer to Note 4(19) to the parent company only financial statements for the accounting policy of revenue recognition, Note 5(1)B and Note 5(2)A for critical accounting judgements, estimates and key sources of assumption uncertainty of revenue recognition, and Note 6(22) for the description of revenue recognition.

-21-

Crowe

Description of key audit matter:

The Company’s sales revenue is easily influenced by various factors such as the industry boom and market environment, and has a significant impact on the utilization rate of the Company (the levy of idle capacity loss), inventory risk and cash flow. Consequently, this is one of the key areas our audit focused on.

How the matter was addressed in our audit:

In relation to the key audit matter above, our principal audit procedures included testing the Company’s controls surrounding revenue recognition; inspecting customer orders and performing a test of revenue transactions which incurred within a certain period before or after the balance sheet date.

Other Matters

We did not audit the financial statements of associates accounted for using the equity method that are included in the parent company only financial statements. Those financial statements were audited by other independent accountants, whose reports thereon have been furnished to us, and our opinion expressed herein, insofar as it relates to the amounts included in the parent company only financial statements is based solely on the audit reports of other independent accountants. The balances of these associates accounted for under the equity method amounted to $213,482 thousand and $230,582 thousand, representing 1.46% and 1.83% of total assets as of December 31, 2025 and 2024, respectively, and share of profits from associates and joint ventures amounted to ($18,061) thousand and ($27,376) thousand, representing (0.69%) and (1.17%) of the income before income tax for the years ended December 31, 2025 and 2024, respectively, and shares of other comprehensive income from associates and joint ventures amounted to $1,408 thousand and $12,846 thousand, representing (1.29%) and 7.72% of the other comprehensive income for the year ended December 31, 2025 and 2024, respectively.

-22-

Crowe

Responsibilities of Management and Those Charged with Governance for the Parent Company Only Financial Statements

Management is responsible for the preparation and fair presentation of the parent company only financial statements in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers, and for such internal control as management determines is necessary to enable the preparation of parent company only financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the parent company only financial statements, management is responsible for assessing the Company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.

Those charged with governance (inclusive of the Audit Committee) are responsible for overseeing the Company's financial reporting process.

Auditors' Responsibilities for the Audit of the Parent Company Only Financial Statements

Our objectives are to obtain reasonable assurance about whether the parent company only financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditors' report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with the Standards on Auditing of the Republic of China will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these parent company only financial statements.

As part of an audit in accordance with the Standards on Auditing of the Republic of China, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:

Crowe

Identify and assess the risks of material misstatement of the parent company only financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control.
Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.
Conclude on the appropriateness of management's use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company's ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in Our auditors' report to the related disclosures in the parent company only financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditors' report. However, future events or conditions may cause the Company to cease to continue as a going concern.
Evaluate the overall presentation, structure and content of the parent company only financial statements, including the disclosures, and whether the parent company only financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the Company to express an opinion on the parent company only financial statements. We are responsible for the direction, supervision and review of the work performed by the group engagement team members, and for forming the Company audit opinion.

-24-

Crowe

From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the parent company only financial statements for the year ended December 31, 2025 and are therefore the key audit matters. We describe these matters in our auditors’ report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.

The engagement partners on the audit resulting in this independent auditors’ report are Kuo Ming Li and Ling Wen Huang.

Crowe (TW) CPAs
Kaohsiung, Taiwan (Republic of China)
March 5, 2026

Notice to Readers

The accompanying parent company only financial statements are intended only to present the financial position, financial performance and cash flows in accordance with accounting principles and practices generally accepted in the Republic of China and not those of any other jurisdictions. The standards, procedures and practices to audit such financial statements are those generally accepted and applied in the Republic of China.

For the convenience of readers, the independent auditors’ report and the accompanying parent company only financial statements have been translated into English from the original Chinese version prepared and used in the Republic of China. If there is any conflict between the English version and the original Chinese version or any difference in the interpretation of the two versions, the Chinese-language independent auditors’ report and parent company only financial statements shall prevail.

-25-

SUNONWEALTH ELECTRIC MACHINE INDUSTRY CO., LTD.

PARENT COMPANY ONLY BALANCE SHEETS

(In Thousands of New Taiwan Dollars)

Assets	Note	December 31, 2025		December 31, 2024
		Amount	%	Amount	%
CURRENT ASSETS
Cash and cash equivalents	6(1)	$1,915,394	13.1	$1,857,657	14.7
Notes receivable, net	6(2)	797	-	5,749	-
Accounts receivable, net	6(3)	3,227,358	22.1	2,590,425	20.6
Accounts receivable - related parties, net	6(3), 7	1,147,957	7.9	928,882	7.4
Other receivables		78,825	0.5	59,257	0.5
Other receivables - related parties	7	74,374	0.5	100,707	0.8
Inventories	6(4)	1,027,612	7.0	984,038	7.8
Prepayments		12,249	0.1	21,434	0.2
Total current assets		7,484,566	51.2	6,548,149	52.0
NONCURRENT ASSETS
Financial assets at fair value through profit or loss- noncurrent	6(5)	-	-	$173,170	1.4
Financial assets at fair value through other comprehensive income or loss - noncurrent	6(6)	26,755	0.2	27,707	0.2
Investments accounted for using equity method	6(7),7	5,768,656	39.5	4,633,660	36.8
Property, plant and equipment	6(8)	1,080,671	7.4	1,008,912	8.0
Right-of-use assets	6(9)	69,069	0.5	62,850	0.5
Investment properties, net	6(10)	84,004	0.6	84,371	0.7
Intangible assets	6(11)	47,484	0.3	39,545	0.3
Deferred income tax assets	6(28)	42,416	0.3	13,528	0.1
Refundable deposits		6,459	-	6,280	-
Total noncurrent assets		7,125,514	48.8	6,050,023	48.0
TOTAL ASSETS		$14,610,080	100.0	$12,598,172	100.0
Liabilities and Equity
CURRENT LIABILITIES
Short-term loans	6(12)	-	-	$20,000	0.1
Contract liabilities - current	6(22)	156,754	1.1	90,266	0.7
Accounts payable		1,110,723	7.6	902,665	7.2
Accounts payable - related parties	7	2,408,230	16.4	2,073,697	16.4
Other payables	6(13)	722,668	4.9	525,513	4.2
Other payables - related parties	6(13), 7	22,378	0.2	22,102	0.2
Current tax liabilities	6(28)	187,320	1.3	125,963	1.0
Provisions - current	6(14)	22,734	0.2	21,384	0.2
Lease liabilities - current	6(9)	22,260	0.2	15,445	0.1
Current portion of long-term loans	6(15)	87,500	0.6	88,889	0.7
Total current liabilities		4,740,567	32.5	3,885,924	30.8

-26-

		December 31, 2025		December 31, 2024
Liabilities and Equity	Note	Amount	%	Amount	%
NONCURRENT LIABILITIES
Long-term loans	6(15)	$612,500	4.2	$474,889	3.8
Deferred income tax liabilities	6(28)	307,312	2.1	250,906	2.0
Lease liabilities - noncurrent	6(9)	48,486	0.3	47,594	0.4
Net defined benefit liabilities - noncurrent	6(16)	13,679	0.1	18,148	0.1
Guarantee deposits		449	-	449	-
Total noncurrent liabilities		982,426	6.7	791,986	6.3
Total Liabilities		5,722,993	39.2	4,677,910	37.1
Share capital	6(17)
Ordinary shares		2,734,437	18.7	2,734,437	21.7
Capital surplus	6(18)	1,518,788	10.4	1,518,788	12.1
Retained earnings	6(19)
Legal reserve		1,278,634	8.8	1,129,127	9.0
Special reserve		136,662	0.9	300,185	2.4
Unappropriated earnings		3,540,830	24.2	2,374,387	18.8
Other equity	6(20)	(244,321)	(1.7)	(136,662)	(1.1)
Treasury stock	6(21)	(77,943)	(0.5)	-	-
Total Equity		8,887,087	60.8	7,920,262	62.9
TOTAL LIABILITIES AND EQUITY		$14,610,080	100.0	$12,598,172	100.0

SUNONWEALTH ELECTRIC MACHINE INDUSTRY CO., LTD.

PANENT COMPANY ONLY STATEMENTS OF COMPREHENSIVE INCOME

(In Thousands of New Taiwan Dollars, Except Earnings Per Share)

	Note	Year Ended December 31
		2025		2024
		Amount	%	Amount	%
OPERATING REVENUES	6(22)	$13,692,636	100.0	$10,865,384	100.0
OPERATING COSTS	6(4)	(10,762,467)	(78.6)	(8,816,889)	(81.1)
GROSS PROFIT		2,930,169	21.4	2,048,495	18.9
UNREALIZED GROSS PROFIT ON SALES TO SUBSIDIARIS AND ASSOCIATES		(70,180)	(0.5)	(63,158)	(0.6)
REALIZED GROSS PROFIT ON SALES TO SUBSIDIARIS AND ASSOCIATES		63,158	0.5	72,864	0.7
OPERATING EXPENSES
Sales and marketing		(723,709)	(5.3)	(547,914)	(5.0)
General and administrative		(429,874)	(3.1)	(375,806)	(3.5)
Research and development		(745,121)	(5.5)	(579,688)	(5.4)
Expected credit gain (loss)	6(3)	(4,115)	-	(3,488)	-
Total operating expenses		(1,902,819)	(13.9)	(1,506,896)	(13.9)
INCOME FROM OPERATIONS		1,020,328	7.5	551,305	5.1
NON-OPERATING INCOME AND EXPENSES
Interest revenue	6(24)	49,957	0.4	76,593	0.7
Other income	6(25)	486,362	3.5	374,424	3.4
Other gains and losses	6(26)	(195,757)	(1.4)	59,808	0.6
Finance costs	6(27)	(13,541)	(0.1)	(9,606)	(0.1)
Share of profits of subsidiaries, associates and joint ventures		1,275,125	9.3	825,434	7.6
Total non-operating income and expenses		1,602,146	11.7	1,326,653	12.2
INCOME BEFORE INCOME TAX		2,622,474	19.2	1,877,958	17.3
INCOME TAX EXPENSE	6(28)	(456,775)	(3.4)	(385,865)	(3.6)
NET INCOME		2,165,699	15.8	1,492,093	13.7
OTHER COMPREHENSIVE INCOME (LOSS)	6(29)
Items that will not be reclassified subsequently to profit or loss:
Remeasurement of defined benefit obligation		(1,913)	-	3,714	0.1
Unrealized gain (loss) on investments in equity instruments at fair value through other comprehensive income		(300)	-	3,032	-
Share of other comprehensive loss of subsidiaries, associates and joint ventures		(458)	-	1,174	-
Income tax benefit related to items that will not be reclassified subsequently		383	-	(743)	-
Total items that will not be reclassified subsequently to profit or loss		(2,288)	-	7,177	0.1
Items that may be reclassified subsequently to profit or loss:
Share of other comprehensive loss of subsidiaries, associates and joint ventures		(133,626)	(1.0)	199,146	1.8
Income tax benefit related to items that may be reclassified subsequently to profit or loss		26,725	0.2	(39,829)	(0.4)
Total items that may be reclassified subsequently to profit or loss		(106,901)	(0.8)	159,317	1.4
Total other comprehensive loss, net of income tax		(109,189)	(0.8)	166,494	1.5
TOTAL COMPREHENSIVE INCOME		2,056,510	15.0	1,658,587	15.2
EARNINGS PER SHARE
Basic	6(30)	$7.94		$5.46
Diluted	6(30)	$7.93		$5.45

The accompanying notes are an integral part of the parent company only financial statements.

-28-

SUNONWEALTH ELECTRIC MACHINE INDUSTRY CO., LTD.

PARENT COMPANY ONLY STATEMENTS OF CHANGES IN EQUITY

(In Thousands of New Taiwan Dollars)

	Capital Stock			Retained Earnings			Others Equity
	Ordinary Shares	Certificate of Bond Exchange Rights	Capital Surplus	Legal Reserve	Special Reserve	Unappropriated Earnings	Exchange Differences on Translating Foreign Operations	Unrealized Gain (Loss) on Financial Assets at Fair Value Through Other Comprehensive income	Treasury stock	Total Equity
BALANCE AT DECEMBER 31, 2024	$ 2,725,243	$ 9,194	$ 1,518,788	$995,720	$257,757	$2,012,211	$ (305,248)	$ 5,063	$ -	$ 7,218,728
Appropriations and distributions of prior years' earnings:
Legal reserve	-	-	-	133,407	-	(133,407)	-	-	-	-
Special reserve	-	-	-	-	42,428	(42,428)	-	-	-	-
Cash dividends	-	-	-	-	-	(957,053)	-	-	-	(957,053)
Net income in 2024	-	-	-	-	-	1,492,093	-	-	-	1,492,093
Other comprehensive income (loss) in 2024, net of income tax	-	-	-	-	-	2,971	159,317	4,206	-	166,494
Total comprehensive income in 2024	-	-	-	-	-	1,495,064	159,317	4,206	-	1,658,587
Bond conversion entitlement certificate	9,194	(9,194)	-	-	-	-	-	-	-	-
BALANCE AT DECEMBER 31, 2025	2,734,437	-	1,518,788	1,129,127	300,185	2,374,387	(145,931)	9,269	-	7,920,262
Appropriations and distributions of prior years' earnings:
Legal reserve	-	-	-	149,507	-	(149,507)	-	-	-	-
Cash dividends	-	-	-	-	-	(1,011,742)	-	-	-	(1,011,742)
Reversal of special surplus reserve	-	-	-	-	(163,523)	163,523	-	-	-	-
Net income in 2025	-	-	-	-	-	2,165,699	-	-	-	2,165,699
Other comprehensive income (loss) in 2025, net of income tax	-	-	-	-	-	(1,530)	(106,901)	(758)	-	(109,189)
Total comprehensive income in 2025	-	-	-	-	-	2,164,169	(106,901)	(758)	-	2,056,510
Bond conversion entitlement certificate	-	-	-	-	-	-	-	-	(77,943)	(77,943)
BALANCE AT DECEMBER 31, 2025	$ 2,734,437	$ -	$ 1,518,788	$ 1,278,634	$ 136,662	$ 3,540,830	$ (252,832)	$ 8,511	$ (77,943)	$ 8,887,087

The accompanying notes are an integral part of the parent company only financial statements.

SUNONWEALTH ELECTRIC MACHINE INDUSTRY CO., LTD.
PARENT COMPANY ONLY STATEMENTS OF CASH FLOWS
(In Thousands of New Taiwan Dollars)

	Year Ended December 31
	2025	2024
CASH FLOWS FROM OPERATING ACTIVITIES
Income before income tax	$ 2,622,474	$ 1,877,958
Adjustments :
Adjustments to reconcile profit (loss)
Depreciation expense	63,524	57,863
Amortization expense	31,184	25,684
Expected credit loss (gain)	4,115	3,488
Net loss (gain) on financial assets and liabilities at fair value through profit or loss	173,170	(12,920)
Interest expense	13,541	9,606
Interest income	(49,957)	(76,593)
Dividend revenues	(217)	-
Share of profits of subsidiaries, associates and joint ventures	(1,275,125)	(825,434)
Loss (gain) on disposal and retirement of property, plant and equipment	78	(2,496)
Unrealized gross profit on sales to subsidiaries and associates	70,180	63,158
Realized gross profit on sales to subsidiaries and associates	(63,158)	(72,864)
Other	(2,052)	4,171
Total adjustments to reconcile profit and loss	(1,034,717)	(826,337)
Net changes in operating assets and liabilities
Decrease (increase) in notes receivable	4,952	12,583
Decrease (increase) in accounts receivable	(641,048)	(723,684)
Decrease (increase) in accounts receivable - related parties	(219,075)	(123,604)
Decrease (increase) in other receivables	(19,777)	(18,179)
Decrease (increase) in other receivables - related parties	26,333	(52,293)
Decrease (increase) in inventories	(43,574)	(139,560)
Decrease (increase) in prepayments	9,185	(12,981)
Total changes in operating assets	(883,004)	(1,057,718)
Net changes in operating liabilities
Increase (decrease) in contract liabilities	66,488	(11,363)
Increase (decrease) in notes payable	-	(10)
Increase (decrease) in accounts payable	208,058	127,722
Increase (decrease) in accounts payable - related parties	334,533	407,486
Increase (decrease) in other payables	163,254	102,110
Increase (decrease) in other payables - related parties	276	5,158
Increase (decrease) in provisions	1,350	2,600
Increase (decrease) in advance receipts	-	(571)
Increase (decrease) in net defined benefit liabilities	(6,382)	(6,869)
Total changes in operating liabilities	767,577	626,263
Total net changes in operating assets and liabilities	(115,427)	(431,455)
Total adjustments	(1,150,144)	(1,257,792)

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	Year Ended December 31
	2025	2024
Cash generated from operations	$1,472,330	$620,166
Interest received	50,166	80,639
Dividends received	586,798	777,539
Interest paid	(13,470)	(9,414)
Income tax paid	(340,792)	(311,505)
Net cash generated from operating activities	1,755,032	1,157,425
CASH FLOWS FROM INVESTING ACTIVITIES
Acquisition of financial assets at fair value through profit or loss	-	(160,250)
Acquisition of investments accounted for using equity method	(584,922)	(646,850)
Proceeds from capital reduction of investments accounted for using equity method	-	81,269
Acquisition of property, plant and equipment	(101,127)	(48,059)
Proceeds from disposal of property, plant and equipment	149	7,980
Increase in refundable deposits	(179)	(1,934)
Acquisition of intangible assets	(19,114)	(50,510)
Other investment activities	652	-
Net cash used in investing activities	(704,541)	(818,354)
CASH FLOWS FROM FINANCING ACTIVITIES
Increase in short-term loans	-	20,000
Decrease in short-term loans	(20,000)	-
Proceeds from long-term borrowings	136,222	386,000
Repayment of long-term borrowings	-	(88,889)
Repayments of lease principal	(19,291)	(14,138)
Cash dividends paid	(1,011,742)	(957,053)
Cost of treasury stock repurchase	(77,943)	-
Net cash generated from (used in) financing activities	(992,754)	(654,080)
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS	57,737	(315,009)
CASH AND CASH EQUIVALENTS - BEGINNING OF YEAR	1,857,657	2,172,666
CASH AND CASH EQUIVALENTS - END OF YEAR	$1,915,394	$1,857,657
The accompanying notes are an integral part of the parent company only financial statements.

Sunonwealth Electric Machine Industry Co., Ltd.
Shareholders' Meeting Policy

Article 1: Unless otherwise specified by law or the Articles of Incorporation, the shareholders' meetings of the Company shall be implemented in accordance with this Policy.

Article 2: The Company shall provide an attendance log to record attendance of shareholders in attendance; alternatively, attendance cards may be presented to signify their presence at the meeting. The number of shares represented during the meeting is calculated based on the total amount registered in the attendance log or the attendance cards collected.

Article 3: Shareholders' attendance and votes are determined by the number of shares represented during the meeting.

Article 4: Shareholders' meetings of the Company shall be held at locations that are suitable and convenient for shareholders to attend. Meetings shall not begin earlier than 9 AM or later than 3 PM.

Article 5: Shareholders' meetings that are convened by the Chairman shall be chaired by the Chairman. If the Chairman is unable to perform such duties due to leave of absence or any reason, the Vice Chairman shall act on the Chairman's behalf. If the Vice Chairman is also unavailable or is non-existent, the Chairman may appoint one of the Managing Directors to act on the Chairman's behalf. If the Company does not have a Managing Director, one of the Directors shall be appointed to act on the Chairman's behalf. If no such designation is made by the Chairman, the Managing Directors or Directors shall select one person from among themselves to serve as chair. If the shareholders' meeting is convened by an authorized party other than the Board of Directors, the meeting shall be chaired by the authorized convener.

Article 6: The Company may summon its lawyers, certified public accountants, and any relevant personnel to be present at the shareholders' meeting. Organizers of the shareholders' meeting must wear proper identification or arm badges.

Article 7: The Company's shareholder meetings must be video or audio recorded and kept for at least one year.

Article 8: The chair shall announce the commencement of the meeting as soon as it is due. However, if the attendants represented less than half of the Company's outstanding shares, the chair may announce to postpone the meeting up to two times, for a period totaling no more than one hour. If after two postponements the number of shareholders present is still insufficient while representing at least one third of the total issued shares, provisional resolutions may be adopted in accordance with Article 175, Paragraph 1 of the Company Act. If the number of shares represented during the meeting accumulates to more than half of all outstanding shares before the meeting ends, the chair may re-propose the tentative resolution for final voting according to Article 174 of the Company Act.

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Article 9: If the shareholders' meeting is convened by the Board of Directors, the Board of Directors shall determine the meeting proceedings. The proceedings shall not be changed unless resolved during the shareholders' meeting. The above rule also applies if the shareholders' meeting is convened by any authorized party other than the Board of Directors. In either of the two arrangements described above, the chair cannot dismiss the meeting while an agenda item (including extraordinary motions) is still in progress. If the chair violates the meeting policy by dismissing the meeting when it is not allowed to do so, the attending shareholders may elect another chair with the support of more than half of voting rights represented and continue the meeting.

Article 10: Shareholders who wish to speak during the meeting must produce an opinion slip detailing the topics and the shareholder's account number (or the attendance ID serial). The order of shareholders' comments shall be determined by the chair. Shareholders who submit an opinion slip without actually speaking are considered to have remained silent. If the shareholder's actual comments differ from those stated on the opinion slip, the actual comments expressed shall be recorded. While a shareholder is speaking, other shareholders shall not speak simultaneously or interfere in any way unless agreed by the chair and the person speaking. Any violators shall be restrained by the chair.

Article 11: Each shareholder shall speak no more than twice, for a maximum of five minutes each, on the same agenda item unless otherwise agreed by the chair. The chair may stop shareholders from speaking if they violate the rules or speak outside the agenda item under discussion.

Article 12: Corporate entities that have been designated as proxy attendants shall only appoint one representative to attend the shareholders' meeting. Where a corporate shareholder has appointed two or more representatives to attend the shareholders' meeting, only one representative may speak per agenda item.

Article 13: After the shareholder has finished speaking, the chair may answer to the shareholder's queries personally or appoint any relevant personnel to do so.

Article 14: When the chair at a board meeting is of the opinion that a proposal has been discussed sufficiently to put it to a vote, the chair may announce the discussion closed and call a vote.

Article 15: The chair will appoint a ballot scrutineer and a ballot counter; the ballot scrutineer must be a shareholder. Voting results shall be made known on-site immediately and recorded in writing.

Article 16: The chair may put the meeting in recess at appropriate times.

Article 17: Unless otherwise regulated by the Company Act or the Articles of Incorporation, an agenda item is passed when supported by shareholders who represent more than half of the total voting rights in the meeting. No voting power shall be granted, however, to shares specified in Article 179 of the Company Act. An agenda is considered passed if the chair receives no objections from any attendants. This voting method is as effective

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as does the conventional ballot method.

Article 18: When there is an amendment or alternative to a proposal, the chair shall present the amended or alternative proposal together with the original proposal and decide the order in which they will be put to a vote. If any resolution is passed, all other proposals shall be deemed rejected and no further voting is necessary.

Article 19: The chair may instruct marshals (or security staff) to help maintain order in the meeting. While maintaining order in the meeting, all marshals or security staff must wear arm bands which identify their roles as "Marshall."

Article 20: Matters not provided herein shall be subject to the provisions of the Articles of Incorporation and other applicable laws and regulations.

Article 21: The Policy shall come into effect upon approval of the shareholders' meeting. The same applies to all subsequent amendments.

Article 22: The Policy was established on June 23, 1991. The first amendment was on April 3, 1997. The second amendment was on April 3, 1998. The third amendment was on May 28, 2002. The fourth amendment was on June 16, 2006.

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Sunonwealth Electric Machine Industry CO., LTD.
Articles of Incorporation

SECTION I: General Principals

Article 1. The Company is called 建準電機工業股份有限公司 and is registered as a company limited by shares according to the ROC Company Act. The English name of the Company is 「SUNONWEALTH ELECTRIC MACHINE INDUSTRY CO., LTD」.

Article 2. The Company is engaged in the following businesses:

CC01080 Electronic Parts and Components Manufacturing
CC01990 Electrical Machinery, Supplies Manufacturing
CB01010 Machinery and Equipment Manufacturing
CC01010 Electric Power Supply, Electric Transmission and Power Distribution Machinery Manufacturing
CC01030 Electric Appliance and Audiovisual Electric Products Manufacturing
F401010 International Trade
IG03010 Energy Technical Services
ZZ99999 All business items that are not prohibited or restricted by law, except those that are subject to special approval.

Article 3. The Company’s headquarter is located in Kaohsiung city, Taiwan and may set up domestic or foreign branches, offices or business establishments as resolved by the Board of Directors, if necessary.

Article 4. Public announcements by the Company are to be made following Article 28 of Company Act.

Article 5. The total amount of the Company’s reinvestment shall not be subject to the restriction of not exceeding 40% of its paid-in capital, and the Company may act as a guarantor.

SECTION II: Shares

Article 6. The total capital amount of the Company shall be five billion New Taiwan Dollars (NT$5,000,000,000), divided into five hundred million (500,000,000) shares, at a par value of ten New Taiwan Dollars (NT$10) per share, and may be issued separately according to the resolution of the Board of Directors.

An additional NT$700 million shall be reserved in the authorized capital in the preceding paragraph for the issuance of employee stock options issuable in 70 million shares of NT$10 per share. The Board of Directors is authorized to issue shares in installments.

Article 6-1. The Company may transfer shares at prices lower than the average repurchase prices to employees or issue employee stock options with a subscription price lower than the closing price of common shares on the issuance date with the approval of two-thirds of all shareholders in the most recent shareholders' meeting attended by at least one-half of all shareholders of outstanding shares.

Article 6-2. When the Company issues new shares, the employees eligible for share subscription shall include employees of subsidiaries of the Company that meet certain conditions, which are to

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include employees of subsidiaries of the Company that meet certain conditions, which are to be prescribed by the Board of Directors.

The recipients of new restricted employee shares issued by the Company include employees of subsidiaries of the Company that meet certain conditions. The conditions and methods of distribution are to be prescribed by the Board of Directors.

Article 7. The Company's stocks shall be registered. Share certificates shall be affixed with the signatures or personal seals of the director representing the Company and shall be duly certified or authenticated by the bank which is competent to certify shares under the laws before issuance thereof.

The Company may issue shares without printing share certificate(s), but shall have the shares registered with the Taiwan Depository & Clearing Corporation.

Article 8. A shareholder shall for record purposes provide to the Company his official name. It shall state the official name and registered address of each shareholder and(or) the proxy of the shareholder in the roster of shareholder. Where there are several persons owning the same share or shares, such co-owners shall select one of them for the exercise of their shareholders rights.

Article 9. Unless otherwise required by the laws and the Securities and Exchange Act, the shareholder services including transferring of share ownership, creation of pledge, removal of pledge, reporting of loss, inheritance, gift, change of basic shareholder information, etc. shall be handled in accordance with the Regulations Governing the Administration of Shareholder Services of Public Companies promulgated by competent authority.

Article 10. A company shall not handle any requests for transfers of shares within 60 days prior to the shareholders meeting, 30 days prior to the special shareholders meeting, or 5 days prior to the record date for the distribution of dividends, bonuses or other interests.

SECTION III: General Shareholders' Meeting

Article 11. Shareholders' meetings include regular meetings and extraordinary meetings. Regular meetings are convened once a year, and usually within six months of the end of each fiscal year. The regular meeting requires a 30-day advance notice from the Board of Directors. Where necessary, extraordinary meetings may be convened with a notice to shareholders 15 days in advance according to the law.

The shareholders' meeting of the Company may be held by means of visual communication network or other methods announced by the central competent authority.

Article 12. Any shareholder, who for any reason is unable to attend general shareholders' meetings, may execute a proxy printed by the Company, in which the authorized matters shall be expressly stated, to authorize a proxy to attend the meeting for him/her.

Article 13. Shareholders' meeting shall be convened by the Board of Directors and, be presided over by the Chairman of the Board of Directors; in case the Chairman of the Board of Directors is on leave or unable to perform his duties for cause, the Chairman of the Board of Directors shall designate a director to act as the chairman; if no such designation, the directors shall elect one from among themselves.

Article 14. Except in the circumstances otherwise provided under the Article 179 of the Company Act, a shareholder shall have one voting power in respect of each share in his/her/its possession.

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Article 15. Unless otherwise required by the Company Act, shareholders’ resolutions shall be adopted by at least half of the votes of the shareholders present at a general shareholders’ meeting who hold at least half of all issued and outstanding shares of the Company.

Article 16. Shareholder meeting minutes made for the purpose of recording all proceedings and resolutions at meetings of the holders of any class of Shares should be signed by respective chairpersons and dispatched within 20 days from the date the meetings concluded to all of the Shareholders for the time being entitled to receive notice of and to attend and vote at the meetings. Minutes shall also specify the place, the day and the hour of the meeting and name of the chairperson and are to be kept in the Company along with relevant Shareholder sign-in records and instruments of proxies. The attendance list bearing the signatures of the shareholders present at the shareholders meeting and the powers of attorney of the proxies shall be kept for a period of at least one year.

SECTION IV: Director

Article 17. The Company shall have seven to nine Directors. The election of Directors is held by nomination in accordance with Article 192-1 of the Company Act, and the shareholders shall vote on the list of candidates. They shall serve three-year terms and they may be reelected. The total number of registered shares of the Company held by all Directors shall meet requirements in the "Rules and Review Procedures for Director and Supervisor Share Ownership Ratios at Public Companies" promulgated by the competent authority.

The number of Independent Directors among the Directors specified above shall be no less than three and no less than one fifth of the total number of Directors. Independent Directors shall be elected from among the nominees in the shareholders' meeting. Independent Directors may not serve for more than three consecutive terms. With respect to professional qualifications, shareholdings, restrictions on taking part-time jobs, independence, nomination, and other compliance-related requirements for independent supervisors, the Company shall follow the relevant regulations announced by the competent authority in charge of the securities industry.

The monthly salaries and transportation allowances for Directors of the Company shall be determined in accordance with prevailing rates in the industry.

The Company shall purchase liability insurance for all Directors in their tenure, and therefore insure itself against liabilities incurred by the directors over the course of service.

Article 18. Tenure of incumbent Directors and Supervisor may be extended until such date new Directors and new Supervisor are appointed if shareholder general meeting to elect new Directors and new Supervisor, for any reason, is not convened in time.

Article 19. The Board of Directors is formed by the Directors. The Chairman shall be elected by a majority voting of the Directors present at a meeting of its Board of Directors attended by two-thirds or more of the Directors of the Company. The Board of Directors may elect one person to serve as the Vice Chairman in the same manner. The Chairman shall execute all matters of the Company in accordance with laws, regulations, the Articles of Incorporation, and resolutions of the shareholders' meeting and the Board of Directors.

Article 20. By-elections shall be convened for the purpose of filling vacant seats in the board of Directors if any such vacancy arises prior to expiration of the designated 3-year tenure. Appointment through by-election shall not carry tenure beyond the original expiration date of the vacant position for which the by-election is held.

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Article 21. The meeting of the Board of Directors shall be held once every quarter; special meeting of the Board of Directors may be held when Chairman deems necessary or requested by two (2) or more Board members. Unless otherwise stipulated in the Company Act, board meetings shall be called and chaired by the Chairman of the Company. When the Chairman cannot exercise his power and authority, the act on his behalf shall be in according with the provisions of Article 192-1 of the Company Act.

In convening a meeting of the Board of Directors, a notice indicated the purpose(s) for convening the meeting shall be given to each director no later than 7 days prior to the scheduled meeting date in writing or via e-mail or fax. However, in the case of urgency, the meeting may be convened at any time.

Article 22. Unless otherwise required by the Company Act, shareholders’ resolutions shall be adopted by at least half of the votes of the shareholders present at a general shareholders’ meeting who hold at least half of all issued and outstanding shares of the Company. A director may execute a proxy to appoint another director to attend the Board of Directors meeting and to exercise his/her voting right, but a director can accept only one proxy. In case a meeting of the board of directors is proceeded via visual communication network, then the directors taking part in such a visual communication meeting shall be deemed to have attended the meeting in person.

Article 23. Board meeting minutes made for the purpose of recording all proceedings and resolutions at meetings of the Directors should be signed by the chairman and dispatched within 20 days from the date the meetings concluded to all of the Directors. Minutes shall be kept in the Company along with relevant Director sign-in records and instruments of proxies.

Article 24. The Company shall set forth the Audit Committee, which comprises of all the independent directors, in accordance with the Securities and Exchange Act. One of the independent directors shall be the convener, and at least one of whom shall have accounting or financial expertise.

After the establishment of the Audit Committee, the Audit Committee shall be responsible for performing the power of supervisors as provided in the Company Act, the Securities and Exchange Act, the Articles of Incorporation and the internal rules of the Company and the relevant laws and regulations.

The resolution of the Audit Committee shall be made at the meeting in which a majority of the independent directors shall vote in favor of the resolution.

Article 25. When holding a meeting of the board of directors, the company may invite personnel of relevant departments to attend the meeting as nonvoting participants.

SECTION V: Manager

Article 26. The Company may have managers whose appointment, dismissal, and remuneration shall be handled in accordance with Article 29 of the Company Act.

Article 27. (Deleted)

SECTION VI: ACCOUNTING

Article 28. At the end of each fiscal year, the Board of Directors shall prepare financial and accounting books in accordance with the ROC Company Act and submit them according to law to the ordinary general shareholders’ meeting for approval.

the business report;
the financial statements; and
the surplus earning distribution or loss off-setting proposals.

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Article 29.

The company operates the business of electronic components industry and it is currently at the growth stage of the industry life cycle. Research, development and increasing production capacity are the key to competitive capability and sustainable operation. Based on the factors including capital required for operation and stable dividends distribution, the Company adopts Residual Dividend Policy with fixed dividends. If the Company is profitable, no less than 2% (inclusive) of the profits shall be allocated as compensation to employees and no more than 5% (inclusive) or less of the profits should be allocated as compensation to directors. While the Company has accumulated losses, the profit shall be set aside to compensate losses before distribution.

If the Company is profitable, no less than 3‰ (inclusive) of the profits shall be allocated as compensation to entry-level employees. While the Company has accumulated losses, the profit shall be set aside to compensate losses before distribution.

The company may, by a resolution adopted by a majority vote at a meeting of board of directors attended by two-thirds of the total number of directors, have the profit distributable as employees' compensation in the preceding two paragraphs distributed in the form of shares or in cash; and in addition thereto a report of such distribution shall be submitted to the shareholders' meeting.

Qualification requirements of employees, including the employees of subsidiaries of the company meeting certain specific requirements, entitled to receive shares or cash.

At each fiscal year-end, the Company should allocate as legal surplus ten percent (10%) of earnings that are net of tax payment and net of adjustments for any losses from prior years. Total of earnings balance from current fiscal year and undistributed earnings from previous years is considered earnings available for distribution. Proposal of earnings distribution shall be presented in board meetings and resolved in shareholder general meetings.

In the case of dividends distribution by the Company, the Board of Directors may refer to the operational and capital expenditure requirements to draw a proposal of appropriate proportions of cash and stock dividends, and such proposal shall be submitted to the shareholders' meeting for approval. Stock dividend provided that the cash dividends shall not be less than 20% of the total dividends.

SECTION VII: Appendix

Article 30.

The internal organization of the Company and the detailed procedures of business operation shall be determined by the Board of Directors.

Article 31.

In regard to all matters not provided for in these Articles of Incorporation, the Company Act or other laws and regulations shall govern.

Article 32.

Terms of these articles of incorporation have been fully ratified, confirmed, and approved by shareholder general meeting and filed with authority for adoption. Any future amendment to the terms of these articles shall be approved by shareholder general meeting and file with authority for adoption.

Article 33.

These Article of Incorporation were enacted on Aug 12, 1980 and amended on Sep. 26, 1980 for the first time, on May 25, 1983 for the second time, on Sep. 1, 1986 for the third time, on Oct. 5, 1988 for the fourth time, on Mar. 7, 1989 for the fifth time, on Mar. 23, 1989 for the sixth time, on Oct. 1, 1989 for the seventh time, on Mar. 1, 1991 for the eighth time, on June 23, 1981 for the ninth time, on June 19, 1983 for the tenth time, on Aug. 20, 1994 for the eleventh time, on June 16, 1995 for the twelfth time, on May 30, 1996 for the thirteenth time, on Apr 3, 1997 for the fourteenth time, and on May 14, 1999 for the fifteenth time, on May 26, 2000 for the sixteenth time, on May 28, 2002 for the seventeenth time, on June 3, 2003 for the eighteenth time, on June 27, 2005 for the nineteenth time, on June 16, 2006 for the twentieth time, on June 22, 2007 for the twenty-first time, on June 19, 2008 for the twenty-second time, on May 27, 2009 for the twenty-

third time, on June 9,2010 for the twenty-fourth time, on May 25,2012 for the twenty-fifth time, on June 4,2014 for the twenty-sixth time, on June 9,2015 for the twenty-seventh time, on June 3,2016 for the twenty-eighth time, on June 19,2019 for the twenty-ninth time, on Jul. 1, 2021 for the thirty time, on June 9, 2023 for the thirty-one time, on May 28, 2025 for the thirty-two time.

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Sunonwealth Electric Machine Industry Co., Ltd.

2025 Business Report

The global economy continued to grapple with multiple challenges in 2025. Although inflationary pressures gradually eased, uncertainties such as geopolitical risks, changes in tariffs, and supply chain restructuring led to a significant divergence in industrial demand structures. In this environment, Sunonwealth demonstrated its resilience in maintaining stable operations and its ability to adapt. Over the past year, the Company benefited from the investment boom in AI infrastructure and the demand for high-speed computing and performed exceptionally well in AI servers, networking and industrial related cooling solution products. The continuous optimization of the product portfolio and global footprint has helped us maintain outstanding performance in overall operations.

Looking ahead, uncertainties loom large in the global economy due to a variety of factors such as interest rate policies, changes in tariffs, geopolitical shifts, and supply chain adjustments. However, key industries such as AI technology innovation, robotics, smart factories, and new energy will continue to grow. Sunonwealth will continue to invest in the development and innovation of core technologies, accelerate market expansion in liquid cooling, actively seek new growth opportunities, enhance cooperation with customers and partners, continuously enhance the Company's competitiveness and brand value, and create long-term and stable growth for shareholders.

Results of Business Operations in the Previous Year

The Company's business plan achievement status in 2025 is as follows:

Comparison of the 2025 Business Plan and actual achievements

	Business Plan	Actual Results	Difference	Hit Rate	2024	Growth Rate
Quantity shipped	110 million units	133 million units	23 million units	120.7%	107 million units	24.3%
Consolidated total revenue	NT$15.3 billion	NT$18.678 billion	NT$3.378 billion	122.1%	NT$14.624 billion	27.7%
Consolidated EPS before tax	NT$7.7	NT$10.25	NT$2.55	133.1%	NT$7.25	41.4%
Consolidated EPS after tax	NT$5.7	NT$7.94	NT$2.24	139.3%	NT$5.46	45.4%

Note: The 2025 Business Plan figure was not audited by the CPA.

In terms of the Company's business plan for 2025, the growth of demand in certain industries was suppressed due to changes in international trade policies and tariffs, with demand for automotive and home appliances falling short of expectations. However, a reduction in inflationary pressures and the computer system replacement cycle have led to growth in demand for laptops and office equipment and dealer channels compared to the previous year. In addition, due to continuous investment in high-performance AI computing and the energy and digital transformation trends, there has been significant growth in the server networking industry and industrial and medical equipment applications. Therefore, consolidated revenues increased by 28% compared to the previous year, meeting 122% of our target profits. Benefiting from the enlarged revenue scale and the better product mix of AI servers and telecom products and improved production efficiency, the Company expanded its net profits by 45% compared to the previous year, achieving 139% of our target. In terms of income and expenditures, net cash inflows for the parent company amounted to NT$58 million and the closing cash and cash equivalents amounted to NT$1.915 billion. The cash flow on the consolidated financial statements showed a net cash inflow of NT$0.578 billion and closing cash and cash equivalents of NT$5.256 billion. The Company's funding status remains healthy. The Company invested NT$745 million in research and development expenditures in the fiscal year and invested NT$1.082 billion in R&D based on the consolidated financial statements. The Company has completed high-efficiency design projects for customers in six major sectors (IT and office equipment, servers and network, industrial and medical equipment, appliances, automobiles, and LED), as well as advancing into the liquid cooling and comprehensive thermal management solutions market, including new technology products such as cold plates, coolant distribution units (CDUs), thermal modules, and large EC fans.

2026 Business Plan Overview

In response to the environmental factors of 2026, the Company has formulated the following important business plans. 1. Actively expand the market share of liquid cooling applications: Continue R&D and innovation in liquid cooling technology products and enhance our partnership with customers to create efficient and reliable integrated liquid cooling solutions. 2. Continue to expand market share in air-cooling related AI applications, network communication, and large EC fans: Focus on the high-growth AI application market and develop new customers to increase market penetration. 3. Accelerate global production deployment to meet customers' demand for flexible supply of NCNT products: Continue to develop the Company's plants in the Philippines to reduce production costs, diversify regional risks, and improve the capacity allocation flexibility. 4. Adoption of AI-powered intelligence: Effectively integrate resources and digital system applications to improve operational efficiency. 5. Establish diverse sources of supply and implement material standardization: Implement strategies for replacing key components and long-term procurement to reduce the risk of material cost fluctuations and ensure production continuity and supply stability. 6. Leverage brand and strategic alliances while

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integrating R&D technology and market resources to expand into new markets. Leverage cross-industry collaboration and strategic partnerships to accelerate the adoption of new technologies and market development, thereby expanding the scope of product applications. 7. Work with supply chain partners to attain sustainable development goals: Work with our supply chain partners to implement environmental protection, social responsibility, and corporate governance, and promote low-carbon processes and sustainable management mechanisms. 8. Upgrade the talent development system and diversify talent recruitment mechanisms: Continue to optimize education, training, and incentive systems, and explore diverse talent pools to meet the needs of long-term development and organizational growth. After adjustments for production and sales and changes implemented in response to the market, products, customers, and sales strategy, the Company plans to ship 140 million units this year.

Future Development Strategy

As a global leading thermal solution provider, Sunonwealth provides diversified and professional thermal products and services. In the past two years, the rapid development of AI-enabled technology has driven the innovation of hardware and software equipment design in many industries and continuously powered innovation and rapid growth in the cooling solution industry. The rapid growth of AI training and large-scale computing causes high-performance processors to generate more heat during operations, which leads to the development of more efficient and energy-saving cooling solutions. As the business opportunities in AI expand across the board, the growth of computing power remains constrained by the existing limitations of power and heat dissipation technologies.

To this end, we offer customers more comprehensive and complete heat dissipation solutions, from air-cooled modules and cold plate solutions for high-speed heat conduction of chips to pumps and coolant distribution units (CDUs) that drive the flow and circulation of coolant, and expanding to large water-cooled heat dissipation cabinets (sidecars or in-row CDUs), large EC axial fans, and a variety of drum fans and centrifugal fans (HVACR ventilation products) used in the building HVAC industry, as well as large ceiling fans and floor fans (HVLS fans) suitable for efficient ventilation in factory and warehouse environments. These products have received wide acclaim from numerous international customers and have been widely adopted in a diverse range of applications.

In addition to cultivating the existing key customer base to generate stable revenue, we also actively participate in international exhibitions (e.g., the OCP 2025/2026 Global Summit and the 2026 Mostra Convegno Expocomfort (MCE) international smart ventilation and new energy exhibition) to help more potential customers obtain the most suitable solutions when facing heat dissipation challenges and make use of our efficient, energy-efficient, and carbon-reducing heat dissipation product portfolio. We also broaden the Company's horizons and directly include more innovative product plans to address future heat dissipation bottlenecks of the industry, which is our ultimate goal for long-term R&D technology accumulation.

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In terms of its global manufacturing footprints, Sunonwealth continues to expand global manufacturing capacity to multiple locations to increase the flexibility of overall production operations and reduce the risks of rising protectionism in international trade. In addition to continuing to expand the new factory in the Philippines and increasing the production capacity of this manufacturing site, the Company is also actively exploring production possibilities in other countries and closely cooperating with customer trends and changes in the global economy. We also introduced AI intelligent automated production systems to improve operational efficiency, control product quality in each area, and reduce production costs to meet customer delivery commitments and increase market share.

Impact of the Competitive Environment, Regulatory Environment, and Overall Business Environment

Businesses face several challenges due to continuous changes in the global political and economic environment. External factors such as the continued escalation of trade disputes between China and the United States, increased geopolitical risks, global tariffs, inflation, and more rigorous ESG regulations affect businesses' cost control, supply chain stability, and market competitiveness. In recent years, Sunonwealth has actively expanded new manufacturing sites, strengthened supply chain risk management, and utilized ESG strategies to stabilize operations. We continue to expand the production capacity of the Philippines plant to meet customers' diversified production location strategies. We also worked with the supply chain to build a digital carbon inventory system to implement carbon reduction targets, enhance low-carbon transformation strategies, and jointly realize the vision of sustainable development and ESG with the supply chain to enhance overall competitiveness.

Over the past year, we have proactively submitted a large number of our main cooling fans used in AI computing, server cooling and related communication products to impartial third parties for verification, and successfully obtained the ISO14067 product carbon footprint verification certificate, demonstrating Sunonwealth's carbon management capabilities throughout the entire product lifecycle from design and production to delivery. We have also received official certification from the renowned international organization Science-Based Targets Initiative (SBTi), and have adopted an open and responsible attitude to examine and implement our carbon reduction commitments. Through continuous efforts, we have achieved our short-term goal of reducing carbon emissions by 37% for 2025, and we have also made steady progress toward our ultimate vision of reducing absolute carbon emissions by 90% in the medium and long term. In addition, we have improved the preparation of the Group's report for the Task Force on Climate-Related Financial Disclosures (TCFD). We identified and quantified the physical risks, transition risks, and transition opportunities arising from climate change through climate scenarios and simulation tools. These analyses serve as an important basis for our short, medium, and long-term strategies and plans. To achieve our long-term goal of attaining net-zero carbon emissions by 2050, we have adopted a series of innovative green transformation strategies. We

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share our success stories with upstream supply chain partners and share credible carbon reduction results with customers in the spirit of transparency, which is in line with our corporate governance policy of sustainable development across the value chain.

Over the past 46 years, Sunonwealth has actively responded to changes and technological innovations, and has taken "solving the world's thermal issues" as the core for technology and service development to provide customers with cooling products that best meet market demand. By enhancing manufacturing capacity for a diverse range of industries, we increase the flexibility of business operations and build a solid foundation of cooling solution technologies. The Company will continue to strengthen resilience, cope with the uncertainties and risks of the external environment, monitor the needs of the fastest-growing industries, and achieve its vision of continuously improvement of corporate value and sustainable operations.

Lastly, I would like to thank all shareholders for their trust and support for the Company. It is your support that has made us what we are today. We shall continue to work hard, innovate, and improve, in order to create greater value for the Company and our shareholders together.

Chairman of the Board
Ching-Shen Hong

President
Ching-Shen Hong

Accounting Managerial Officer William Li

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Audit Committee's Audit Report

The Board of Directors has prepared and submitted the 2025 business report, financial statements, and earnings distribution proposal. The financial statements have been audited by Crowe Horwath (TW) CPAs and they have submitted an audit report. The Audit Committee has reviewed the business report, financial statements, and the earnings distribution proposal and did not find any instances of noncompliance. According to Article 14-4 of the Securities and Exchange Act and Article 219 of the Company Act, it is hereby submitted for your review and perusal.

Sunonwealth Electric Machine Industry Co., Ltd.
Chairman of the Audit Committee: Chi-Shan Hung

March 5, 2026

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The Execution of Share Repurchases

Item	Explanation
Board Resolution Date	April 10, 2025
Repurchase Tranche	8th Tranche
Repurchase Purpose	Transfer shares to employees
Repurchase Method	Repurchase from centralized trading market
Scheduled Repurchase Period	April 11, 2025 to June 10, 2025
Scheduled Repurchase Share Quantity	6,000,000 shares
Scheduled Repurchase Price Rang	NT$46.55 ~ NT$145.50
Actual Repurchase Period	April 11, 2025 to May 8, 2025
Actual Repurchase Share Quantity	904,000 shares
Cumulative Held Shares as % of Total Issued Shares	0.32% (Note)
Actual Total Repurchase Amount	NT$ 77,942,956
Average Repurchase Price per Share	NT$ 86.22
Actual Repurchased Quantity as % of Scheduled	15.07%
Shares Canceled or Transferred	0 share
Reasons for Incomplete Execution	To protect shareholder interests and accommodate market trading mechanisms, the Company repurchased shares in batches based on price fluctuations, resulting in incomplete execution.

Note: The total issued shares increased to 286,943,669 upon the completion of the capital increase on March 17, 2026.

Sunonwealth Electric Machine Industry Co., Ltd.

2025 Director's Remuneration

I. Remuneration to Ordinary Directors and Independent Directors:
Unit: NTD Thousand %

Title	Name	Director's remuneration							Ratio of total compensation (A+B+C+D) to net income	Pay received as an employee									Percentage of the total sums of A, B, C, D, E, F, and G on the net profit	Compensation from investee companies other than subsidiaries or the parent company
		Remuneration (A)		Retirement pension (B)		Director's remuneration (C)		Fees for conducting business(D)			Salary, bonuses and allowances(E)		Retirement pension (F)		Employee's remuneration(G)
		The Company	All companies in the Financial Report	The Company	All companies in the Financial Report	The Company	All companies in the Financial Report	The Company	The Company	The Company	All companies in the Financial Report	The Company	The Company	The Company	The Company	The Company		All companies in the Financial Report			The Company	The Company	All companies in the Financial Report
																Cash amount	Stock amount	Cash amount	Stock amount
Director	Chairman of the Board	Yo Yuan Investment Corporation Representative: Ching-Shen Hong	1,560	1,560	0	0	7,040	7,040	100	100	8,700 0.40	8,700 0.40	18,187	20,732	0	0	9,503	0	9,503	0	36,390 1.68	38,936 1.80	-
	-	Yo Yuan Investment Corporation Representative: Li-Ju Chen	480	480	0	0	2,240	2,240	100	100	2,820 0.13	2,820 0.13	6,022	6,022	0	0	3,952	0	3,952	0	12,794 0.59	12,794 0.59	-
	-	Yo Yuan Investment Corporation Representative: Ling-wen Huang	480	480	0	0	2,240	2,240	100	100	2,820 0.13	2,820 0.13	2,031	2,031	0	0	2,593	0	2,593	0	7,444 0.34	7,444 0.34	-
		Yo Yuan Investment Corporation Representative: Fu-Sheng Huang	480	480	0	0	2,240	2,240	100	100	2,820 0.13	2,820 0.13	0	0	0	0	0	0	0	0	2,820 0.13	2,820 0.13	-
		Nice Enterprise Co., Ltd. Representative: Ching-Liang Chen	480	480	0	0	2,240	2,240	100	100	2,820 0.13	2,820 0.13	0	0	0	0	0	0	0	0	2,820 0.13	2,820 0.13	-

Title	Name	Director's remuneration							Ratio of total compensation (A+B+C+D) to net income	Pay received as an employee								Percentage of the total sums of A, B, C, D, E, F, and G on the net profit	Compensation from investor companies other than subsidiaries or the parent company
		Remuneration (A)		Retirement pension (B)		Director's remuneration (C)		Fees for conducting business(D)			Salary, bonuses and allowances(E)		Retirement pension (F)		Employee's remuneration(G)
		The Company	All companies in the Financial Report	The Company	All companies in the Financial Report	The Company	All companies in the Financial Report	The Company	All companies in the Financial Report	The Company	All companies in the Financial Report	The Company	All companies in the Financial Report	The Company		All companies in the Financial Report		The Company			All companies in the Financial Report
														Cash amount	Stock amount	Cash amount	Stock amount	Cash amount		Stock amount
Independent Director	Kuang-Chih Huang	1,440	1,440	0	0	0	0	100	100	1,540 0.07	1,540 0.07	0	0	0	0	0	0	0	0	1,540 0.07	1,540 0.07	-
	Chi-Shan Hung	1,560	1,560	0	0	0	0	100	100	1,660 0.08	1,660 0.08	0	0	0	0	0	0	0	0	1,660 0.08	1,660 0.08	-
	Chin-Cheng Kao	1,560	1,560	0	0	0	0	100	100	1,660 0.08	1,660 0.08	0	0	0	0	0	0	0	0	1,660 0.08	1,660 0.08	-
	To-Tsai L	1,440	1,440	0	0	0	0	100	100	1,540 0.07	1,540 0.07	0	0	0	0	0	0	0	0	1,540 0.07	1,540 0.07	-

Please describe the policy, system, standards and structure of the remuneration packages of the Independent Directors and explain the relevance of the amount of remuneration paid to them based on factors such as responsibility, risk and time commitment: The compensation for independent directors includes remuneration and business execution fees. The monthly remuneration takes into account the extent of the independent directors' participation in the company's operations and their responsibilities, while also referencing industry benchmarks for payment. Independent directors do not participate in the distribution of director compensation. In accordance with Article 29 of the Company's Articles of Incorporation, the Company shall distribute no more than $5\%$ of the profits of the current year as remuneration for Directors and propose to Remuneration Committee and Board of Directors for resolution.
Except as disclosed above, remuneration received by directors in the latest year for services (e.g., acting as a non-employee consultant of the parent company/any company in the financial statements/investec) provided by the directors: None.

II. The remuneration of the Company's directors includes base pay, business execution expenses, and director compensation. The monthly base pay for directors and independent directors is determined based on their degree of participation in the Company's operations, the value of their contributions, and their supervision of the Company's sustainable development plans, while also taking into account prevailing industry standards. Business execution expenses are paid as attendance fees based on the number of meetings attended. Pursuant to Article 29 of the Company's Articles of Incorporation, if the Company records a profit for the year, no more than $5\%$ shall be allocated as director compensation; however, if the Company has accumulated losses, an amount shall be reserved in advance to offset such losses. Independent directors do not participate in the distribution of director compensation.

To implement corporate governance and strengthen the correlation between remuneration and performance, the Company conducts periodic evaluations in accordance with the "Rules for Performance Evaluation of the Board of Directors," and the results of the self-performance evaluations of board members are utilized as a key basis for determining director remuneration. The 2025 director self-performance evaluation comprised 23

indicators across six major dimensions: "Alignment of the Company's Goals and Missions," "Recognition of Director Responsibilities," "Participation in the Company's Operations," "Internal Relationship Management and Communication," "Professionalism and Continuous Education of Directors," and "Internal Controls". Following the aggregation of these results, the evaluation score for the year was 4.98 out of 5, with a rating of "Very Good (4)," indicating that the directors maintain a positive assessment of the efficiency and effectiveness of the operations across all indicators. The reasonableness of the relevant remuneration is submitted to the Remuneration Committee and the Board of Directors for review to ensure alignment with the Company's long-term business objectives and sustainable development.

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SUNON®

Sunonwealth Electric Machine Industry Co., Ltd.

TEL: 886-7-8135888

FAX: 886-7-8122929

Http://www.sunon.com

E-mail: [email protected]

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SUNON — AGM Information 2026

52070_rns_2026-04-23_1875ca15-fe1a-4d13-bc37-befcbf879186.pdf

Sunonwealth Electric Machine Industry Co., Ltd.

2026 Annual General Shareholders’ Meeting Meeting Handbook

[Discussion matters]

REPRESENTATION LETTER

INDEPENDENT AUDITORS' REPORT

Opinion

Basis for Opinion

Key Audit Matters

Valuation of inventory

Revenue recognition

Other Matters

Responsibilities of Management and Those Charged with Governance for the Consolidated Financial Statements

Auditors' Responsibilities for the Audit of the Consolidated Financial Statements

Notice to Readers

SUNONWEALTH ELECTRIC MACHINE INDUSTRY CO., LTD. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

INDEPENDENT AUDITORS' REPORT

Opinion

Basis for Opinion

Key Audit Matters

Valuation of inventory

Description of key audit matter:

How the matter was addressed in our audit:

Revenue recognition

Other Matters

Responsibilities of Management and Those Charged with Governance for the Parent Company Only Financial Statements

Auditors' Responsibilities for the Audit of the Parent Company Only Financial Statements

Notice to Readers

SECTION I: General Principals

SECTION II: Shares

SECTION III: General Shareholders' Meeting

SECTION IV: Director

Sunonwealth Electric Machine Industry Co., Ltd.

2025 Business Report

Results of Business Operations in the Previous Year

2026 Business Plan Overview

Future Development Strategy

Impact of the Competitive Environment, Regulatory Environment, and Overall Business Environment

Audit Committee's Audit Report

The Execution of Share Repurchases

Sunonwealth Electric Machine Industry Co., Ltd.

2025 Director's Remuneration

More from SUNON

SUNON AGM Information 2026