SUNON — Interim / Quarterly Report 2019

Dec 2, 2019

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SUNONwealth Electric Machine Industry Co., Ltd. 2019 Q3 Operating Results 2421.TW / 2421 TT

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SUNONwealth Electric Machine Industry Co., Ltd. (2421.TW / 2421 TT)

Safe Harbor Notice

This presentation is based on the information obtained from various sources which the Company believes to be reliable. But at some point in the future, there are a variety of factors which could cause actual results to differ

materially from those statements. Therefore, please refer to the information on MOPS website as the main basis if any adjustment has been made. (http://mops.twse.com.tw/mops/web/index)

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SUNONwealth Electric Machine Industry Co., Ltd. (2421.TW / 2421 TT)

Thermal & Thermal Management

All electronic devices and circuitry generate excess heat and thus require thermal management to improve reliability and prevent premature failure. The amount of heat output is equal to the power input, if there are no other energy interactions. There are several techniques for cooling including various styles of heat sinks, thermoelectric coolers, forced air systems and fans, heat pipes, and others.

Passive Cooling Active Cooling

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Heat sinks Heat pipes Liquid cooling Cooling Fan
Vapor chamber
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From Wikipedia, the free encyclopedia

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SUNONwealth Electric Machine Industry Co., Ltd. (2421.TW / 2421 TT)

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Thermal
Module
Thermal Module
Heat Heat Ambient
Chip TIM Copper Fan temperature
pipes sinks
meet
Heat heat transfer heat dissipation system
Operating
temperature
Photo Source :Internet
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SUNONwealth Electric Machine Industry Co., Ltd. (2421.TW / 2421 TT)

Cooling Fan (Server)

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Photo Source :Internet

SUNONwealth Electric Machine Industry Co., Ltd. (2421.TW / 2421 TT)

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Cooling
Fan
(Auto)
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SUNONwealth Electric Machine Industry Co., Ltd. (2421.TW / 2421 TT)

38 YEARS

Innovative Energy-Saving Motor Design & Technology

E s t a b l i s h e d E m p l o y e e s F a c t o r i e s T u r n o v e r (Taiwan) (China) (Taiwan) (China) USD$ 1980 550 7300 1 3 397[M] (Year 2018)

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Motor 0.1W 1500 Watts Fan 8mm 80mm 120mm 250 mm 3000mm 7300mm

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SUNONwealth Electric Machine Industry Co., Ltd. (2421.TW / 2421 TT)

Growth Pattern

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Million (NTD) Server, Data center
Received orders from STB SUNON enters LED lighting industry
and automotive manufactures Became the only supplier for Philips
PM2.5 Air Purifier and
Automotive electronics
Received orders from
Cisco, ZTE, Huawei major telecom
Financial
and Cloud Data manufactures
Crisis
Received order from major
telecom manufacture
SUNON enters Cloud Data Center
Received orders from Facebook and Google
Focus on Micro Cooling Device
The only supplier for NB OEM
SUNONwealth Electric Machine Industry Co., Ltd. (2421.TW / 2421 TT) Page 8
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SUNON
Research
PANTENTS
3000
[2671]
[2568]
2500 2006 2157 [2298] [2454]
2000 [1825]
[1695]
1451 [1586]
1500
1000
500
0
2 [009] 2 [010] 2 [011] 2 [012] 2 [013] 2 [014] 2 [015] 2 [016] 2 [017] 2 [018]
SUNONwealth Electric Machine Industry Co., Ltd. (2421.TW / 2421 TT) Page 9
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• Global Over 1,000 sales representatives, 12 subsidiaries and offices, and over 130 distributors around the world.

• Support • 7 research centers which provide a worldwide technological service network for quick and efficient services.

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Europe China / Foshan China / Kunshan Taiwan Taiwan Taipei Japan/ Yokohama U.S.A.
Research Center Research Center Research Center Research Center Research Center Research Center Research Center
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SUNONwealth Electric Machine Industry Co., Ltd. (2421.TW / 2421 TT)

World Leading Motor Technology

Sound MagLev Shockproof Ultra Energy Quality System System Thin Efficient Analysis

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3mm Thickness

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92%
efficiency
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SUNONwealth Electric Machine Industry Co., Ltd. (2421.TW / 2421 TT)

Outstanding Technology

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MAGNETIZATION MOTOR EFFICIENCY VIBRATION FREQUENCY MATERIAL ANALYSIS
SIMULATION ANALYSIS ANALYSIS SPECTRUM ANALYSIS AND RESEARCH
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SOUND QUALITY THERMAL ANALYSIS
ANALYSIS
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STRUCTURAL SIMULATION HIGH VOLTAGE DIRECT
ANALYSIS CURRENT(DC)
ELECTRICITY
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SUNONwealth Electric Machine Industry Co., Ltd. (2421.TW / 2421 TT)

SUNON Product Line

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Motor Fan
Ventilation Cooling
System Module
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SUNONwealth Electric Machine Industry Co., Ltd. (2421.TW / 2421 TT)

Fan & Blower

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Fan Size
8mm- 250mm
DC Axial Fan DC Blower AC Axial Fan
Mighty Mini Fan Water proof Fan Explosion-proof Fan
Fan Tray
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EC Axial Fan

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EC Blower EC Centrifugal Fan
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SUNONwealth Electric Machine Industry Co., Ltd. (2421.TW / 2421 TT)

Cooling Module

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Active Passive
Cooling Cooling
Module Module
Liquid
cooling
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SUNONwealth Electric Machine Industry Co., Ltd. (2421.TW / 2421 TT)

Motor Highly Energy efficient motor 0.1W ~ 1500W

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DC motor
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Commercial
HVACR
Refrigerator / Freezer
EC horsepower motor
EC motor
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SUNONwealth Electric Machine Industry Co., Ltd. (2421.TW / 2421 TT)

Ventilation Eco ventilation solution

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Ventilation Fan Flow2 One HVLS Fan
SUNONwealth Electric Machine Industry Co., Ltd. (2421.TW / 2421 TT) Page 17
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Products Application & YOY Growth

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50% 2016
2017
40%
35.3%
2018
30%
25.9%
2019YTD
20% 41.4%
13.8% 36.1%35.5%
8.5% 8.7% 22.8%
10% 1.5% 6.4% 15.6%16.0%15.9% 17.6%20.4%
9.0% 10.7% 9.8% 10.5%10.7%10.0%
2.0% 1.9% 1.8% 3.9% 4.2% 4.3%
0%
LED Lighting Automobile Distribution Home Industrial Telecom & IT & OE
Appliances Medical E. Server
-4.9%
-20.2% -19.8% -18.6% -20.9% 7.7%
35.5%
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SUNONwealth Electric Machine Industry Co., Ltd. (2421.TW / 2421 TT)

Revenue Performance

UNIT: NTD (K)

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11,965,298
12,000,000 20%
10,690,822 [10,946,728 ]
15.5%
9,533,345 [10,109,156 ]
10,000,000 15%
8,398,392
8,256,495
9.3%
7,708,731
8,000,000 10%
7.1%
6.0% 5.8%
6,000,000 5%
2.4%
4,000,000 0%
-5.9%
2,000,000 -5%
0 -10%
Y2012 Y2013 Y2014 Y2015 Y2016 Y2017 Y2018 2019YTD
Revenue Growth rate
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SUNONwealth Electric Machine Industry Co., Ltd. (2421.TW / 2421 TT)

Profit Margin

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30%
Gross Margin 23.3%
21.6%
19.4%
20% 22.0% 23.0% 23.3%21.6% 21.4% 22.4%
22.9% 20.4% 23.5% 22.6% 19.6% 22.4% 20.1%
20.5% 18.3%
10% 19.7% 21.1% 22.4% 20.3%
17.5%
0%
Q1 Q2 Q3 Q4 Y
Y2015 Y2016 Y2017 Y2018 Y2019
Operating Margin
10%
8.9%
8%
7.9% 5.8% 8.2% 8.2%
7.6%
6% 7.8% 6.9%
6.0% 6.4% 6.5% 6.5%
5.9%
4% 2.7% 4.9% 5.4% 5.0%
4.4% 4.3%
3.5%
2% 2.7%
2.6%
0.8%
0%
Q1 Q2 Q3 Q4 Y
Net Margin
10%
7.9%
8%
5.9%
6% 7.4%
3.9% 5.7% 6.1% 6.4% 6.4% 6.5% 6.3% 6.7% 5.5% 6.0%
4% 5.1% 6.3% 5.1% 5.1%
4.6% 4.4%
2% 2.3% 2.6% 3.1%
0% 1.3%
Q1 Q2 Q3 Q4 Y
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SUNONwealth Electric Machine Industry Co., Ltd. (2421.TW / 2421 TT)

Earning & Cash Dividend

UNIT: NTD

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3.0
2.62
2.5 2.28 2.41 2.3
2.0 2.0
2.0 1.77
1.51 1.5
1.5 1.22 1.2
1.0 1.0
0.83
1.0
0.5
0.0
EPS Cash Dividend
Y2012 Y2013 Y2014 Y2015 Y2016 Y2017 Y2018
Payout
120.48% 81.97% 79.47% 84.75% 87.72% 87.79% 82.99%
R.
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SUNONwealth Electric Machine Industry Co., Ltd. (2421.TW / 2421 TT)

Medium Term Drivers

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Energy Storage Industry 4.0 5G
Automobile
System Inverter / Drive Application
5G Wi-Fi
IoT ,AI & Cloud Industrial
Gaming Air Purifier
Computing Ventilation
Photo Source :Internet
SUNONwealth Electric Machine Industry Co., Ltd. (2421.TW / 2421 TT) Page 22
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SUNONwealth Electric Machine Industry Co., Ltd. (2421.TW / 2421 TT)

Appendix II

		CONSOLIDATED BALANCE SHEETS	CONSOLIDATED BALANCE SHEETS	CONSOLIDATED BALANCE SHEETS	CONSOLIDATED BALANCE SHEETS	CONSOLIDATED BALANCE SHEETS	CONSOLIDATED BALANCE SHEETS
								Growth YOY(%)
NT$ M	2015	2016	2017	2018	2019.9.30		2016	2017	2018	2019.9. 30
TOTAL ASSETS	7,523	8,391	8,813	8,972	8,754		11.54%	5.03%	1.80%-3.58%
Cash	1,269	1,338	1,387	1,145	1,135		5.44%	3.66%	-17.45%	-6.58%
A/R, N/R	2,439	2,871	2,724	3,091	3,169		17.71%	-5.12%	13.47%	-3.44%
										-
Inventories	1,480	1,377	1,744	1,794	1,420		-6.96%	26.65%	2.87%	20.71%
PP&E	1,775	2,182	2,294	2,378	2,321		22.93%	5.13%	3.66%	-1.49%
TOTAL LIABILITIES	3,516	4,324	4,639	4,832	4,697		22.98%	7.28%	4.16%-7.81%
										-
Short-term loans	464	454	636	843	739		-2.16%	40.09%	32.55%	22.62%
										-
A/P	2,084	2,469	2,550	2,671	2,420		18.47%	3.28%	4.75%	12.03%
Long-term loans	0	320	320	220	220				-31.25%	0.00%
TOTAL EQUITY	4,007	4,067	4,174	4,139	4,056		1.50%	2.63%	-0.84%	1.81%
Days sales outstanding	88	91	93	89	102
Days sales of inventory	64	63	67	68	67
Current Ratio	1.6317	1.5336	1.4898	1.4247	1.4409

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SUNONwealth Electric Machine Industry Co., Ltd. (2421.TW / 2421 TT)

Appendix I

	CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME	CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME	CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME	CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME	CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME	CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME	CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME	CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
NT$ M	2015	2016	2017	2018	2019 1Q~3Q		2016	Growth YOY(%) 2017 2018		2019 1Q~3Q
OPERATING REVENUES	10,109	10,691	10,947	11,965	8,398		5.76%	2.39%	9.30%	-5.94%
GROSS PROFIT	2,054	2,398	2,454	2,402	1,815		16.75%	2.34%	-2.12%	0.55%
INCOME FROM OPERATIONS	439	695	756	602	510		58.31%	8.78%	-20.37%	8.74%
INCOME BEFORE INCOME TAX	584	833	842	784	597		42.64%	1.08%	-6.89%	0.34%
NET INCOME attribute to owners	442	572	657	605	464		29.41%	14.86%	-7.91%	0.00%
EPS (NT$)	1.77	2.28	2.62	2.41	1.85
Gross Margin	20.32%	22.43%	22.42%	20.08%	21.61%
Operating Margin	4.34%	6.50%	6.91%	5.03%	6.07%
Net Margin(*)	4.37%	5.35%	6.00%	5.06%	5.53%

(*)Net Margin=Net Income attribute to owners / Revenue

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SUNONwealth Electric Machine Industry Co., Ltd. (2421.TW / 2421 TT)

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www.sunon.com

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SUNONwealth Electric Machine Industry Co., Ltd. (2421.TW / 2421 TT)