SUNON — Interim / Quarterly Report 2022

Sep 2, 2022

SUNONwealth Electric Machine Industry Co., Ltd.

2022 Q2 Operating Results 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 Everywhere

The development of AI technology and the 5G network draw up a blueprint for Artificial Intelligence of Things (IoT). Numerous electronics and applications have been applied to build smart connections and rapidly adopted by various industries and into our daily life, and thus thermal needs are increasingly required.

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AI+5G � AI X 5G
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SUNONwealth Electric Machine Industry Co., Ltd. (2421.TW / 2421 TT)

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Thermal Technology Keeps Pace With the Times

Future will be supported by powerful computing capacity and the ultra-speed Internet with high reliability, which tests the effectiveness of thermal solutions. The change in the world stimulates thermal technology to update and advance to be suitable for real-time computing systems' needs. Technological advancement in heat dissipation provides the most effective operating temperature management to achieve excellence.

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High Fan Efficiency Low Vibration
System
O.P.
Low Noise
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Energy Saving

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

5G Cooling Solution

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

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圖片來源：網路圖片
Server
Cooling Solution
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圖片來源：網路圖片
SUNONwealth Electric Machine Industry Co., Ltd. (2421.TW / 2421 TT) Page 6
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5G Base Stations Cooling Solution

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AAU /BBU /RRU DU / CU BST / RBS SMALL CELL

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

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5G
Net Working
Cooling Solution
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SERVER
SWITCH WI-FI 6 5G
STORAGE
ROUTRT ROUTER SMALL CELL
EDGE
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SUNONwealth Electric Machine Industry Co., Ltd. (2421.TW / 2421 TT)

Auto Cooling Solution

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

Renewable Energy Cooling Solution

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

42 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 600 8500 1 2 489.95[M] (Year 2021)

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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)

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Growth
Pattern
COVID 19
(NTD K)
Work From Home
14,000,000
Server, Data center
12,000,000
U.S.-China
10,000,000 SUNON enters LED
trade war
Received orders from lighting industry
STB and automotive Became the only
PM2.5 Air Purifier and
8,000,000 manufactures supplier for Philips
Automotive electronics
6,000,000
4,000,000 SUNON enters Cloud Data Center
Financial
Received orders from Facebook , Google
Received order from Crisis
Cisco, ZTE, Huawei major telecom
major telecom and Cloud Data manufactures
2,000,000 manufacture
0
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021
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SUNONwealth Electric Machine Industry Co., Ltd. (2421.TW / 2421 TT)

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SUNON
Research
PANTENTS
3500
3,128 [3213]
3000
2454 [25682671][2802]
2500
20062157 [2298]
2000
1451 [15861695][1825]
1500
1000
500
0
2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021
SUNONwealth Electric Machine Industry Co., Ltd. (2421.TW / 2421 TT) Page 13
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SUNONwealth Electric Machine Industry Co., Ltd. (2421.TW / 2421 TT)
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Global Support 14 114 1000+ Subsidiary & Office Distributor & Agent Sales & Service sites

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

World Leading Motor Technology

AntiVib Sound MagLev Ultra Energy Motor Quality System Thin Efficient structure Analysis

3mm Thickness

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

Outstanding Technology Total Thermal Solution

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STRUCTURAL SIMULATION ALTIUM DESIGNER MAGNETIZATION TEMPERATURE SIMULATION MOLD SYSTEM TEMPERATURE
ANALYSIS SIMULATION ANALYSIS ANALYSIS ANALYSIS
AC IN
DC
OUT
MOTOR EFFICIENCY MATERIAL ANALYSIS AND HIGH VOLTAGE DIRECT VIBRATION FREQUENCY SOUND QUALITY ANALYSIS
ANALYSIS RESEARCH CURRENT(DC) ELECTRICITY SPECTRUM ANALYSIS
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SUNONwealth Electric Machine Industry Co., Ltd. (2421.TW / 2421 TT)

Accuracy Verification Experiment

Precision Sound quality EMC / EMI Product reliability Safety testing and measurements experiment verification verification certification & material analysis To solve the noise, To improve sound To ensure all electronic From design, trial To perform safety testing vibration, temperature quality with the help of devices in the same production to mass and accelerate rise of fan products, German HMS and space can operate production, accurately certification awarding make the motor system spectral / normally without assess product reliability process to ensure more stable, and psychoacoustic interfering with each through a series of product safety effectively improve parameters of Artemis other rigorous testing by product performance computer-controlled verification systems

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

Total Thermal Solution

Fan and Motor

Cooling Module

Air Flow Management SUNON concentrated on its core motor technology and accumulated various inventions and innovations in this field. We now provide various sizes of motor and fan which featuring higher flexibility, energy-efficiency, lower noise, and longer service life.

Total Air Fresh Solution

It implies a demand for craftsmanship and minimalist beauty in German design and creates an all-new experience in clean air quality for the new generation of healthy homes.

SUNON Product

Total Thermal Solution

As a world-renowned cooling leader, we can provide customized and integrated service to our clients easily base on sophisticated experience and innovative technology.

Optimal air Circulation

It features an ultra slim motor and a stylish shape. The patented silent winglet design, energy efficient and high airflow fan creates thermal comfort and healthy environment.

Air Exchanger

HVLS Fan

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

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Sufficient Capability

production bases in 2022

Cooling Fans 20 M/month Cooling modules 1.5M/month

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Kaohsiung, Taiwan Kunshan, Jiangsu Beihai, Guangxi Bataan, Philippines
0.5M/month 8 M/month(FAN) 11.5 M/month Construction period (plan)
1.5 M/month(CM) 2022
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SUNONwealth Electric Machine Industry Co., Ltd. (2421.TW / 2421 TT)

Products Application & YOY Growth

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50% 2019
2020
40%
2021
27.9% 28.6%
30%
2022YTD
20% 16.4%
11.1% 36.7%36.0%34.7%
28.2%28.3%
8.8% 25.7%
10% 6.0%
1.4% 1.1% 1.1%1.2% 6.4% 5.2% 5.2% 7.9% 7.7% 9.0% 8.4% 7.2% 7.4% 13.5%14.6%14.3%
0%
LED Lighting Automobile Distribution Home Industrial Telecom & IT & OE
Appliances Medical E. Server
0.2%
9.9%
-14.7%
18.7%
21.8%
41.2% 44.6%
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SUNONwealth Electric Machine Industry Co., Ltd. (2421.TW / 2421 TT)

Revenue Performance

UNIT: NTD (K)

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14,000,000 13,561,804 20%
12,781,281
12,000,000 10,946,728 11,965,298 11,659,915 15%
10,690,822
10,109,156
10,000,000 10%
9.3% 9.6%
8,000,000 5%
6.0% 5.8% 6.1%
6,606,375
3.9%
6,000,000 2.4% 0%
4,000,000 -2.6% -5%
2,000,000 -10%
Y2015 Y2016 Y2017 Y2018 Y2019 Y2020 Y2021 Y2022Q2
Revenue Growth rate
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SUNONwealth Electric Machine Industry Co., Ltd. (2421.TW / 2421 TT)

Profit Margin

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Gross Margin
30%
22.6%
25.7% 20.7%
18.6% 25.0%
20% 23.5%
21.4% 21.6% 18.9% 23.3% 18.7% 23.4% 21.0%19.5% 22.1% 18.7%
17.5%
19.4%
10% 18.3% 20.4% 21.6% 19.6% 20.1%
0%
Q1 Q2 Q3 Q4 Y
Y2018 Y2019 Y2020 Y2021 Y2022
Operating Margin
12%
11.9% 8.5%
9% 10.6%
6.4%
8.5% 8.7%
6% 4.1% 7.6% 8.9% 6.8%
5.8% 6.0% 5.9%
4.9% 5.0%
3% 3.8% 4.4%
2.7% 3.4% 3.4%
2.6% 2.0% 1.9%
0%
Q1 Q2 Q3 Q4 Y
Net Margin
12%
8.6%
9% 10.3% 6.9%
4.9%
6% 6.7%
6.1% 5.9% 6.5% 7.9% 6.6% 6.7% 5.8%
5.1%
3% 3.9% 4.3% 4.6% 4.5% 4.6%
2.6% 3.1% 2.2% 2.5% 3.2%
0%
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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4.0
3.39
3.5
3.0 2.71
2.62
2.4
2.5 2.28 2.41 2.3
2.0 2.0 2.0
2.0 1.77 1.71
1.51 1.5
1.5 1.22 1.2 1.2
1.0 1.0
0.83
1.0
0.5
0.0
EPS Cash Dividend
Y2012 Y2013 Y2014 Y2015 Y2016
Y2017 Y2018 Y2019 y2020 Y2021
2012 2013 2014 2015 2016 2017 2018 2019 2020 2021
Payout R. 120.48% 81.97% 79.47% 84.75% 87.72% 87.79% 82.99% 73.80% 70.80% 70.18%
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SUNONwealth Electric Machine Industry Co., Ltd. (2421.TW / 2421 TT)

Product Development

Fluid Dynamic Bearing Development	Immersion Solution for High computing system	Anti-gravity & Low Thermal Resistance Thermal Modules
Intelligent Fan Development	5G Base Stations Thermal Module	Automotive Systems Thermal Modules

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

Medium Term Drivers

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5G Electric
Server Metaverse
Base Stations car
Industry 4.0 Industrial Air Purifier
Renewable Energy
Inverter / Drive Ventilation UVC Solution
SUNONwealth Electric Machine Industry Co., Ltd. (2421.TW / 2421 TT) Page 25
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Environmental Social Governance ESG

Environmental

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Performance Highlights

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

Appendix I

		CONSOLIDATED BALANCE	CONSOLIDATED BALANCE	CONSOLIDATED BALANCE	CONSOLIDATED BALANCE	SHEETS
NT$ M	2018	2019	2020	2021	2021 Q2	2022 Q2	2019	2020 2021 成長率 YOY(%)		2022Q1
TOTAL ASSETS	8,972	9,439	10,419	11,517	11,338	11,504	5.21%	10.38%	10.54%	1.46%
Cash	1,145	1,271	1,575	1,912	1,925	1,866	11.00%	23.92%	21.40%	-3.06%
A/R, N/R	3,091	3,323	3,226	3,459	3,284	3,220	7.51%	-2.92%	7.22%	-1.95%
Inventories	1,794	1,519	1,752	2,508	2,428	2,792	-15.33%	15.34%	43.15%	14.99%
PP&E	2,378	2,277	2,106	2,059	2,090	2,164	-4.25%	-7.51%	-2.23%	3.54%
TOTAL LIABILITIES	4,832	5,211	5,825	7,150	6,619	6,950	7.84%	11.78%	22.75%	5.00%
Short-term loans	843	927	671	1,950	1,392	1,624	9.96%	-27.62%	190.61%	16.67%
A/P	2,671	2,705	2,823	2,926	3,002	2,791	1.27%	4.36%	3.65%	-7.03%
Long-term loans	220	220	520	524	520	578	0.00%	136.36%	0.77%	11.15%
TOTAL EQUITY	4,139	4,229	4,594	4,367	4,719	4,554	2.17%	8.63%	-4.94%	-3.50%
Days sales outstanding	89	100	94	90	93	92
Days sales of inventory	68	67	61	70	73	92
Current Ratio	1.4247	1.4272	1.4984	1.3448	1.4495	1.3936

SUNONwealth Electric Machine Industry Co., Ltd. (2421.TW / 2421 TT) Page 27

Appendix II

CONSOLIDATED STATEMENT OF	CONSOLIDATED STATEMENT OF	CONSOLIDATED STATEMENT OF	CONSOLIDATED STATEMENT OF	CONSOLIDATED STATEMENT OF	COMPREHENSIVE INCOME	COMPREHENSIVE INCOME	COMPREHENSIVE INCOME	COMPREHENSIVE INCOME
NT$ M	2018	2019	2020	2021	2021 H1	2022 H1	2019	2020 Growth	2021 YOY(%)	2022H1
OPERATING REVENUES	11,965	11,660	12,781	13,562	6,357	6,606	-2.55%	9.61%	6.11%	3.92%
GROSS PROFIT	2,402	2,579	2,998	2,536	1,158	1,368	7.37%	16.25%	-15.41%	18.13%
INCOME FROM OPERATIONS	602	787	1,114	464	125	425	30.73%	41.55%	-58.35%	240.00%
INCOME BEFORE INCOME TAX	784	910	1,088	585	177	567	16.07%	19.56%	-46.23%	220.34%
NET INCOME attribute to owners	605	681	852	429	167	453	12.56%	25.11%	-49.65%	171.26%
EPS (NT$)	2.41	2.71	3.39	1.71	0.67	1.81
Gross Margin	20.08%	22.12%	23.46%	18.70%	18.22%	20.71%
Operating Margin	5.03%	6.75%	8.72%	3.42%	1.97%	6.43%
Net Margin(*)	5.06%	5.84%	6.67%	3.16%	2.63%	6.86%

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

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

Thanks for Your Attention !

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WWW.SUNON.COM
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