SUNON — Interim / Quarterly Report 2023

Nov 2, 2023

FIRST CHOICE GLOBALLY Cooling Solutions

2023 Q3 Operating Results Sunonwealth Electric Machine Industry Co., Ltd. 2421.TW / 2421 TT

Disclaimer

The information or opinions contained in this document are based on expectations of current conditions and prediction on future events made by SUNONWEALTH ELECTRIC MACHINE INDUSTRY CO., LTD. (hereinafter referred to as “the Company”), which no representation or warranty, express or implied, is made as to its fairness, accuracy, completeness or timeliness. The information in this document only reflects the Company's view of the future as of the date hereof and is subject to change or adjustment in the future. And the Company assumes no obligation to notify or update it at any time unless otherwise required by the applicable laws. Neither the Company nor any of its subsidiaries, affiliates or representatives shall be liable for any direct or indirect damages arising out of the contents of this document, or any action taken as a result of reference to such contents.

The information contained in this document may express the Company's confidence in and expectations for its future vision, but these forward-looking statements are based on a number of factors relating to the Company's operations and are subject to unknown risks, uncertainties and other factors, and as a result, the actual results may differ materially from those in the forward-looking statements set forth above.

No part of this document may be copied, redistributed or transmitted, directly or indirectly, to any other person (whether inside or outside the Company) or published (in part or in whole) for any purpose.

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

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SUNON Thermal Everywhere

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5G Base Stations
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Networking
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Industry Inverter / Drive
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Renewable Energy
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surveillance
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medical
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SUNONwealth Electric Machine Industry Co., Ltd. (2421.TW / 2421 TT) Page 3 FIRST CHOICE GLOBALLY Cooling Solutions

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Growth Pattern
(NTD) 千元
COVID 19
Work From Home
Server, Data center
Electric Vehicles
Received orders from STB
AI Server, Data center
and automotive U.S.-China
manufactures trade war
LED Lighting PM2.5 Air Purifier and
Automotive electronics
SUNON enters Cloud Data Center
Received orders from Facebook , Google
Financial
Cisco, ZTE, Huawei major telecom
Received order from Crisis
and Cloud Data manufactures
major telecom
manufacture
(Year)
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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
Reliability
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Bionic Blade Design
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SUNONwealth Electric Machine Industry Co., Ltd. (2421.TW / 2421 TT)

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More cooling options

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Heat Cold Vapor
Pump
Pipe Plate Chamber
Liquid Immersion
Liquid to Air CDU
Liquid
Cooling
Solution 80KW~
Advanced
1KW~
Cooling
Solutions
Enhanced 400W~
Phase-changed
Solutions
Traditional
100W~
Heat Sinks
～ 100W
Technology Extrusion
Die-cast Heat Pipe
Vapor Chamber (3D) Cold Plate Immersion Cooling
Forged Vapor Chamber
High Power Heat Pipe Immersion Cooling Rear Door Heat Exchanger
Skived EVAC
Stacked
SUNONwealth Electric Machine Industry Co., Ltd. (2421.TW / 2421 TT) Page 6 FIRST CHOICE GLOBALLY Cooling Solutions
Cooling Capability
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SUNONwealth Electric Machine Industry Co., Ltd. (2421.TW / 2421 TT)

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TDP (W) Cooling Solution Trend
30KW Immersion Cooling
Liquid Cooling
Open loop
1500W
1KW
Liquid
cooling Close loop
500W
350W Air
cooling Cooling fan + HS / HP / VC
~Y2022 Y2023 Y2024 Y2025 Y2026
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AI+5G � AI X 5G � Generative AI into daily life
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.
DATA Vehicle
5G SERVER
CENTER Computing
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5G Cooling Solution
SUNON is one of the top cooling suppliers for 5G servers/AI servers, and can provide cooling fans,
cooling modules and liquid cooling systems
Small Cell
LEOS
Low Earth Orbit Satellite,
Wi-Fi 6
Router
Base Stations
Networking
Switch / Router
Data Center
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Server / Data Center cooling product development

Global server shipment forecast

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

Thermal solution Cooling Fan Cooling Module 40x40x28mm Heat Pipe Cooling Module 1U 40x40x56 mm Vapor Chamber Cooling Module Remote Heatsink Active Cooling Module 60x60x38 mm 60x60x56 mm Heat Exchanger 2U 60x60x76 mm Radiator 80x80x56 mm 80x80x86mm 4U 80x80x80mm UP 120x120x38mm 120x120x76mm Page 10

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Product Roadmap for Server CPU Cooler

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Whitely (TDP ~270W)
Intel
Eagle Stream (TDP~350W)
(1U/2U)
Birch Stream ( TDP ~500W)
AMD Genoa (TDP ~ 400W)
(1U/2U)
Bergamo (TDP~500W)
Y2021 Y2022 Y2023 Y2024 Y2025
3D VC for 2U (TDP 500W)
3D VC
(2U/4U) 3D VC for 4U (TDP 700W)
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SUNONwealth Electric Machine Industry Co., Ltd. (2421.TW / 2421 TT)

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Product Roadmap for Server liquid cooling

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

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80KW
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Electric Vehicles / Auto Cooling Solution

SUNON has more than 20 years of experience in cooling solutions for the automotive industry, and can provide various cooling fans, cooling modules and liquid cooling products that meet the quality standards of the automotive industry

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IATF16949 AEC Q100/Q200 EMC CISPR25 SUNONwealth Electric Machine Industry Co., Ltd. (2421.TW / 2421 TT) Page 13

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

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Net zero emissions by 2050

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Energy Energy
Harvesting Storing
PV inverters Energy storage systems
Enclosure cabinet equipment Battery containers,
EV charging systems packs and racks
Source: https://reurl.cc/NR85xk
SUNONwealth Electric Machine Industry Co., Ltd. (2421.TW / 2421 TT) Page 14 FIRST CHOICE GLOBALLY Cooling Solutions
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Renewable Energy Cooling Solution

SUNON is an important partner of global high-quality energy system cooling solutions, providing a full range of cooling solutions.

PV Inverter Cooling ESS Cooling

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EV Charger Cooling EV Charger

FIRST CHOICE GLOBALLY Cooling Solutions

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

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Established Employees Turnover (USD) Factories
1980 9000 457.94 M 5
14
Subsidiary & Office
123
Distributor & Agent
1000+
Sales & Service sites
SUNONwealth Electric Machine Industry Co., Ltd. (2421.TW / 2421 TT) Page 16 FIRST CHOICE GLOBALLY Cooling Solutions
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Products and Applications

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

Air / Liquid Cooling Module

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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.
SUNON
Products HVLS Fan
Optimal air Circulation
It features an ultra slim motor and a stylish
shape. The patented silent winglet design,
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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.

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.

2022 Market share

Air Exchanger

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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Sufficient Capability

production bases in 2023 Cooling Fans 19.4 M pcs/ month Cooling Module 1.5M pcs/month

Kaohsiung, Taiwan 1.2M pcs /month

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Beihai, Guangxi II 3M pcs/month

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Bataan, Philippines
3M pcs/month
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Kunshan, Jiangsu 5M pcs/month(FAN) 1.5 M pcs/month(CM)

Beihai, Guangxi I 7.2M pcs/month

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

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EGS Performance Highlights

Governance

• Consolidated revenue reached 14.063 billion NTD, a 3.7% increase from 2021.

• The Company ranks among the top 3 leading brands in terms of market share.

• Female directors account for 1/3 of the seats on the board of

• directors.

• A sustainability development committee has been established.

• • Zero cases of corruption.

Society

• Average employee training hours exceeded 66.8 hours per year.

• • Production bases in Taiwan and China have both passed ISO 45001 certification.

• Provided care to 8,060 households in the "Support and Care Campaign" from 2018 to 2022.

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Products

• Saved 318 million kWh of electricity with product

• R&D. Reduced GHG emissions by 160,000 MTCO2e.

• 100.0% pass rate of hazardous substance

• inspection for three consecutive years from 2020 to 2022.

• Obtained 3,332 invention patents.

Environment

• Implemented greenhouse gas

• inventory across the entire group, and passed third-party external verification.

• The solar power generation of the Guangxing plant has exceeded 455,000 kWh.

• Continuously passed IECQ QC 080000 certification each year.

Supply Chain

• Implemented audits for new suppliers.

• • Conducted annual supplier audits. • Local procurement rates exceed 90%.

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

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		Quarterly Revenue	Quarterly Revenue	Quarterly Revenue	Quarterly Revenue	Quarterly Revenue	Quarterly Revenue
In B. NT
4.00
2.00 2.20 2.40 2.60 2.80 3.00 3.20 3.40 3.60 3.80	2.44 2.25 3.03	2.70 3.60 3.12 3.08	3.33 3.48 3.28		3.26 3.54	3.48	3.26 3.40 3.72 3.66 3.79 3.29
	Q1	Q2				Q3	Q4
		Y2019	Y2020	Y2021	Y2022	Y2023

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

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UNIT: NTD (K)

Revenue Performance

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16,000,000 20%
14,063,308
14,000,000 13,561,804
15%
12,781,281
11,965,298
12,000,000 10,946,728 11,659,915
10%
10,690,822
10,109,156 9.3% 9.6%
10,000,000 9,648,751
6.0% 5.8% 6.1% 5%
8,000,000
3.7%
2.4%
0%
6,000,000
-2.6%
-5%
4,000,000
-6.1%
2,000,000 -10%
Y2015 Y2016 Y2017 Y2018 Y2019 Y2020 Y2021 Y2022 YYTD3YTD
Revenue Growth rate
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SUNONwealth Electric Machine Industry Co., Ltd. (2421.TW / 2421 TT)

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Products Application & QoQ Growth

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50%
45.2%
2019
40% 2020
2021 36.7% 36.0%
34.7%
30% 2022 31.7%
24.0%
2023Q3 25.7% 28.2% 28.3%
24.5%
20%
10% 8.8% 12.6%6.3% 13.5% 14.6% 14.3% 14.6%9.5%
5.1%
1.1% 6.4% 8.0% 7.9% 7.7% 9.0% 8.4% 7.2% 7.4% 7.7%
1.4% 1.1% 1.1% 0.9% 5.2% 5.2%
0%
LED Lighting Automobile Distribution Home Appliances Industrial Medical E. Telecom & Server IT & OE
15.4% 4.1% -24.3% -21.3% -16.4% 8.8% 7.3%
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Products Application & YoY Growth

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50%
45.2%
2019
40% 2020
2021 36.7% 36.0%
34.7%
30% 2022 31.7%
24.0%
2023Q3 25.7% 28.2% 28.3%
24.5%
20%
10% 8.8% 12.6%6.3% 13.5% 14.6% 14.3% 14.6%9.5%
5.1%
1.1% 6.4% 8.0% 7.9% 7.7% 9.0% 8.4% 7.2% 7.4% 7.7%
1.4% 1.1% 1.1% 0.9% 5.2% 5.2%
0%
LED Lighting Automobile Distribution Home Appliances Industrial Medical E. Telecom & Server IT & OE
172% -22% -58% -39% -32.8% 18% -10.1%
SUNONwealth Electric Machine Industry Co., Ltd. (2421.TW / 2421 TT) Page 23 FIRST CHOICE GLOBALLY Cooling Solutions
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Products Application & YoY Growth

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50%
2019
40.6%
2020
40%
2021
2022 36.7% 36.0% 34.7%
30% 2023YTD 31.7%
28.2% 28.3% 22.8%
25.7%
24.5%
20%
11.6%
10% 8.6% 12.6%9.2% 13.5% 14.6% 14.3% 14.6%
6.1%
8.0% 7.9% 7.7% 9.0% 8.4% 7.2% 7.4% 7.7%
1.1% 6.4% 5.2% 5.2%
1.4% 1.1% 1.1% 0.9%
0%
LED Lighting Automobile Distribution Home Appliances Industrial Medical E. Telecom & Server IT & OE
18% 6.4% -28.6% -32.6% -29.1% 24.2% -21.8%
SUNONwealth Electric Machine Industry Co., Ltd. (2421.TW / 2421 TT) Page 24
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Profit Margin
Gross Margin 30% 26.5% 28.1% 29.0% 27.9%
25.7% 24.0% 24.5%
22.6% 25.0% 22.6%
20% 23.5%
19.4%21.4% 17.5%18.6% 21.6% 18.9% 23.3% 18.7% 23.4%21.0% 19.5% 22.1% 18.7%
10%
Q1 Q2 Q3 Q4 Q42
Y2019 Y2020 Y2021 Y2022 Y2023
Operating Margin 12.4% 12.3% 12.0%
11.3%
12%
11.9%
9%6% 8.5% 8.9% 10.6% 9.0% 8.5% 9.7% 6.8% 8.7% 8.0%
5.8% 6.0% 5.9%
3% 3.8% 4.1%
3.4% 3.4%
2.7% 2.0% 1.9%
0%
Q1 Q2 Q3 Q4 Y
Net Margin 13.2% 11.7% 11.4%
12%
9.0%
9% 10.3% 9.7%
8.6%
6% 7.9% 7.4% 6.7% 7.7%
5.9% 6.7% 5.8%
3% 3.9% 4.3% 4.9% 6.6% 4.5% 4.6% 3.2%
3.1%
2.5%
0% 2.2%
Q1 Q2 Q3 Q4 Y
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Operating Margin

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

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Quarterly Earning

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In NTD
2.00
1.80 1.72
1.60 1.49
1.40 1.47
1.42
1.20 1.11
1.20
1.00 1.11
1.03
0.93
0.80 0.86
0.60 0.69
0.61 0.62 0.60
0.40
0.39 0.37 0.35
0.20 0.30
0.20
0.00
Q1 Q2 Q3 Q4
Y2019 Y2020 Y2021 Y2022 Y2023
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Earning & Cash Dividend

UNIT: NTD

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2013 2014 2015 2016 2017 2018 2019 2020 2021 2022
Payout R. 81.97% 79.47% 84.75% 87.72% 87.79% 82.99% 73.80% 70.80% 70.18% 60.00%
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SUNONwealth Electric Machine Industry Co., Ltd. (2421.TW / 2421 TT)

Appendix I

CONSOLIDATED BALANCE SHEETS	CONSOLIDATED BALANCE SHEETS
2022 2023 Q3 Q3 TOTAL ASSETS 10,419 11,517 12,192 12,119 13,019 Cash 1,575 1,912 2,457 1,900 3,829 A/R, N/R 3,226 3,459 3,414 3,772 3,510 Inventories 1,752 2,508 2,651 2,694 2,107 PP&E 2,106 2,059 2,273 2,290 2,221 TOTAL LIABILITIES 5,825 7,150 6,989 7,182 5,974 Short-term loans 671 1,950 1,288 1,949 938 A/P 2,823 2,926 3,179 3,038 2,771 Long-term loans 520 524 287 315 280 TOTAL EQUITY 4,594 4,367 5,203 4,937 7,045 Days sales outstanding 94 90 89 96 98 Days sales of inventory 61 70 86 89 94 Current Ratio 1.4984 1.3448 1.4275 1.3695 1.9206 NT$ M 2020 2021 2022	2021 2022 2023Q3 成長率 YOY(%)
	10.54% 5.86% 7.43%
	21.40% 28.50% 101.53%
	7.22% -1.30% -6.95%
	43.15% 5.70% -21.79%
	-2.23% 10.39% -3.01%
	22.75% -2.25% -16.82%
	190.61% -33.95% -51.87%
	3.65% 8.65% -8.79%
	0.77% -45.23% -11.11%
	-4.94% 19.14% 42.70%

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Appendix II

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME	CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
2022 2023 Q3 Q3 OPERATING REVENUES 12,781 13,562 14,063 10,270 9,649 GROSS PROFIT 2,998 2,536 3,171 2,247 2,691 INCOME FROM OPERATIONS 1,114 464 1,122 755 1,159 INCOME BEFORE INCOME TAX 1,088 585 1,426 1,035 1,425 NET INCOME attribute to owners 852 429 1,089 809 1,096 EPS (NT$) 3.39 1.71 4.34 3.23 4.32 Gross Margin 23.46% 18.70% 22.55% 21.88% 27.89% Operating Margin 8.72% 3.42% 7.98% 7.35% 12.01% Net Margin(*) 6.67% 3.16% 7.74% 7.88% 11.36% NT$ M 2020 2021 2022	2021 2022 2023Q3 Growth YOY(%)
	6.11% 3.69% -6.05%
	-15.41% 25.04% 19.76%
	-58.35% 141.81% 53.51%
	-46.23% 143.76% 37.68%
	-49.65% 153.85% 35.48%

(*)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 !

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WWW.SUNON.COM
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