SUNON — Interim / Quarterly Report 2021

Mar 11, 2022

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SUNONwealth Electric Machine Industry Co., Ltd.

2021 Q4 Operating Results 2421.TW / 2421 TT

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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 finance 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.

AI+5G  AI X 5G

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

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
System
O.P.
Low Noise
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Low Vibration

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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)

圖片來源：網路圖片

Server Cooling Solution

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圖片來源：網路圖片

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

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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)

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 HVLS Fan up to 7,300 mm The Smallest Fan 8 mm

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

Growth Pattern

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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)

SUNON Research

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PANTENTS

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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
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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 MagLev Motor System structure

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Sound Ultra Energy Quality Thin Efficient 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

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Precision measurements & material analysis

To solve the noise, vibration, temperature rise of fan products, make the motor system more stable, and effectively improve product performance

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Sound quality experiment

To improve sound quality with the help of German HMS and spectral / psychoacoustic parameters of Artemis

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EMC / EMI verification

To ensure all electronic devices in the same space can operate normally without interfering with each other

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Product reliability verification

From design, trial production to mass production, accurately assess product reliability through a series of rigorous testing by computer-controlled verification systems

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Safety testing and certification

To perform safety testing and accelerate certification awarding process to ensure product safety

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SUNONwealth Electric Machine Industry Co., Ltd. (2421.TW / 2421 TT) Page 17

Total Thermal Solution

Fan and Motor

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.

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SUNON Product

Cooling Module

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

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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
0.5M/month 8 M/month(FAN) 11.5 M/month
1.5 M/month(CM)
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Bataan, Philippines Construction period (plan) 2022*

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

Products Application & YOY Growth

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50% 2018
2019
40%
34.7%
2020
28.3%
30%
2021
20%
14.3% 35.5%36.7%36.0%
28.2%
9.0% 25.7%
7.4% 22.8%
10%
5.2% 15.9%13.5%14.6%
1.8% 1.4% 1.1% 1.1% 4.3% 6.4% 5.2% 9.8% 7.9% 7.7% 10.0% 8.4% 7.2%
0%
LED Lighting Automobile Distribution Home Industrial Telecom & IT & OE
Appliances Medical E. Server
3.4% 4.8% 3.0%
7.5% 8.5% 7.1%
25.3%
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SUNONwealth Electric Machine Industry Co., Ltd. (2421.TW / 2421 TT)

Revenue Performance

UNIT: NTD (K)

2,000,000 4,000,000 6,000,000 8,000,000 10,000,000 12,000,000 14,000,000	9,533,345 10,109,156 10,690,822 10,946,728 11,965,298 11,659,915 12,781,281 13,561,804 15.5% 6.0% 5.8% 2.4% 9.3% -2.6% 9.6% 6.11% -10% -5% 0% 5% 10% 15% 20% Y2014 Y2015 Y2016 Y2017 Y2018 Y2019 Y2020 Y2021 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%
20% 17.5% 21.6%25.7% 18.9% 23.3%25.0% 18.7% 23.4% 19.5% 23.5% 18.7%
21.4% 21.0% 22.1%
19.4% 20.4% 21.6% 19.6% 20.1%
18.3%
10% 22.0% 23.0% 23.3% 21.4% 22.4%
0%
Q1 Q2 Q3 Q4 Y
Y2017 Y2018 Y2019 Y2020 Y2021
Operating Margin
12%
11.9%
9% 10.6%
8.9% 5.9% 8.7%
6% 7.9% 8.2% 7.6% 8.5% 6.9% 6.8%
6.0% 5.8% 3.4% 6.0% 3.4%
5.4%
3% 3.8% 2.0% 4.9% 1.9% 4.4% 5.0%
2.6% 2.7%
0%
Q1 Q2 Q3 Q4 Y
Net Margin
12%
9% 10.3%
6% 3.1% 7.4% 6.1% 6.4% 7.9% 6.6% 6.7% 4.6% 6.0% 5.8% 6.7% 3.2%
5.1% 5.9% 2.2% 6.5% 2.5% 5.1%
3% 3.9% 4.3% 5.1% 4.6% 4.5%
2.6%
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 Intelligent Fan Development

Immersion Solution Anti-gravity & Low for Thermal Resistance High computing system Thermal Modules Automotive Systems 5G Base Stations Thermal Modules Thermal Module

Immersion Solution for High computing system

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

Medium Term Drivers

5G Electric Server Metaverse Base Stations car

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Industry 4.0 Industrial Air Purifier Renewable Energy Inverter / Drive Ventilation UVC Solution

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

Environmental Social Governance ESG Performance Highlights

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Saved 248 million kWh of electricity with product R&D Reduced emissions by 126 million kilograms of CO2e

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Average employee training hours exceeded 15 hours Training expenses totaled NT$2.72 million

The number of employees with disabilities hired exceeds 1.6 times more than the total number set in the Act. Provided care to 7,699 households in the "Support and Care Campaign" (2018-2020)

The consolidated revenue was US$ 489.95 Million

which was a 9.1% increase from 2020

The consolidated EPS after tax was NT$ 1.71

The Company ranks among the top3 leading brands in terms of market share

Obtained 3,213 invention patents

Female make up 1/3 of the BOD

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

Appendix I

		CONSOLIDATED	CONSOLIDATED	BALANCE SHEETS	BALANCE SHEETS	BALANCE SHEETS
NT$ M	2017	2018	2019	2020	2021	2018	2019 Growth	2020 YOY(%)	2021
TOTAL ASSETS	8,813	8,972	9,439	10,419	11,517	1.80%	5.21%	10.38%	10.54%
Cash	1,387	1,145	1,271	1,575	1,912	-17.45%	11.00%	23.92%	21.40%
A/R, N/R	2,724	3,091	3,323	3,226	3,459	13.47%	7.51%	-2.92%	7.22%
Inventories	1,744	1,794	1,519	1,752	2,508	2.87%	-15.33%	15.34%	43.15%
PP&E	2,294	2,378	2,277	2,106	2,059	3.66%	-4.25%	-7.51%	-2.23%
TOTAL LIABILITIES	4,639	4,832	5,211	5,825	7,150	4.16%	7.84%	11.78%	22.75%
Short-term loans	636	843	927	671	1,950	32.55%	9.96%	-27.62%	190.61%
A/P	2,550	2,671	2,705	2,823	2,926	4.75%	1.27%	4.36%	3.65%
Long-term loans	320	220	220	520	524			136.36%	0.77%
TOTAL EQUITY	4,174	4,139	4,229	4,594	4,367	-0.84%	2.17%	8.63%	-4.94%
Days sales outstanding	93	89	100	94	90
Days sales of inventory	67	68	67	61	70
Current Ratio	1.4898	1.4247	1.4272	1.4984	1.3448

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

Appendix II

CONSOLIDATED STATEMENT	CONSOLIDATED STATEMENT	CONSOLIDATED STATEMENT	CONSOLIDATED STATEMENT	OF COMPREHENSIVE	OF COMPREHENSIVE	OF COMPREHENSIVE	INCOME
NT$ M	2017	2018	2019	2020	2021	2018	2019 2020 Growth YOY(%)		2021
OPERATING REVENUES	10,947	11,965	11,660	12,781	13,562	9.30%	-2.55%	9.61%	6.11%
GROSS PROFIT	2,454	2,402	2,579	2,998	2,536	-2.12%	7.37%	16.25%	-15.41%
INCOME FROM OPERATIONS	756	602	787	1,114	464	-20.37%	30.73%	41.55%	-58.35%
INCOME BEFORE INCOME TAX	842	784	910	1,088	585	-6.89%	16.07%	19.56%	-46.23%
NET INCOME attribute to owners	657	605	681	852	429	-7.91%	12.56%	25.11%	-49.65%
EPS (NT$)	2.62	2.41	2.71	3.39	1.71
Gross Margin	22.42%	20.08%	22.12%	23.46%	18.70%
Operating Margin	6.91%	5.03%	6.75%	8.72%	3.42%
Net Margin(*)	6.00%	5.06%	5.84%	6.67%	3.16%

(*)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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Thanks for Your Attention !

WWW.SUNON.COM

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