TECOM — Investor Presentation 2018

Dec 21, 2018

Tecom – Investor Conference
December, 2018

Notes:

Disclaimer
The information presented and referred herein are based upon the information obtained internally and externally from our company. In light of the forward-looking operational results, financial condition and business results, they might be different from those information expressly or impliedly presented herein due to various factors, including but not limited to market risks, supply chains, market demand and our upcoming high-quality products.
We undertake no obligation to publicly update or revise any statements regarding those information presented and referred herein in the event of any further changes or updates to the information presented herein.

Agenda
Company Overview
Core Competences
Major Business and Product
New Key Product
Market Profits
Financial Report
Q & A

Company Overview

Overview

Established	:	1980
Headquarter	:	Taiwan (SBIP, Hsinchu)
IPO	:	1991/11
Chairman	:	C. K. Liu
GM	:	Vincent Chih
Capital	:	3.15B

Overview
TECOM Co., Ltd, a TECO Group High-tech company was established in 1981, ?at the famous Hsinchu Science Park.
Teco Established in 1956; the No. 1 Motor Manufacturer in Taiwan; acquired whole ?Motor Division of Westinghouse, USA in 1995.
Ranked No. 4 Mid-High Voltage Industrial Motors maker in the world.
Motors, Inverters, Switch-Gears, Circuit-Breakers, marketing in 62 countries worldwide.
One of the Role-Model, Hightech Start-up in the Science Park
ODM suppliers to most world leading vendor
Taiwan No.1 Business Communications Maker
e-Home System，Taiwan No.1。
TECOM innovative communications products have been ODMed to many a world leading telecom equipment vendors and major telecom carriers.
The innovative applications of the IoT Gateway lead Taiwan.
Join with TECO, integrates Information and Communications Technology ?(ICT) with industry rotating machinery, ?we introduce the Brand-New, Next-Generation ? “ Smart Machine Health managing MHm Platform.”

Major Business and Product

Major Business and Product

IIoT
Enterprise
Business Communication System
Mobile Business Communication System
Secured BB IoT System
Machine Health managing system (MHm)
Smart Sensors
Portable Vibration Diagnosis Instrument

Consumer
Carrier
Smart Home System
Cloud Video Doorbell
Broadband Access
Cloud Service Home Gateway

Product Solution for Small-Medium Enterprise

Business Communication System

IPKTS (50~200 users )
IP50 / IP100 / IP320
KTS (10 ~300 users)
616A / 412H / 2488 / 360F
X16 (6x16, 16 users)

Smartphone Business ?Communication System ?IG7600

Converged Business Phone System
SDX-500
Video Conference Speakerphone

Broadband Access

Secured BB IoT System
Fusion Access System for SMB

Notes:

Product Solution for Consumer

Smart Home System

IP Video ?Outdoor Phone
IP Video ? Outdoor Phone
7” / 10”
Indoor Phone
APP for ?Android, iOS
e-Gateway ?Central Management
Security Phone
Smart Video Doorbell

APP for ?Android, iOS

IP Video Doorbell
Cloud Video Doorbell

Notes:

New Key Product

Introduction
IIoT Industrial Internet of Things megatrend is coming
The factory automation must use the IIoT solution
TECO Group launches a comprehensive Smart Machine Health Managing System(MHm)
(1) MMK Upgrade Kit (MMK/MHm)? - Long-Term Machine Health Managements
- Provide real-time monitoring, alarm, interactive diagnosis, etc….
- Especially for the life-cycle equipment that can not be shut down (2) Pro-3200 (Portable Vibration Diagnosis Instrument)
- To establish a complete vibration database of all equipment ? in a factory
- With the upgrade package, it will allow the factory’s health ? management equipment to be combined with inspection

Application Structure Diagram

Motor

異常:

Switchgear
IoT
Gateway
Broadband Router
Internet

WiFi / 3G / 4G
RS485? (Industry Standard)
Water Pump

Machine Health management System
(MHm)
Air Compressor

Smart Phone with App
Sensors
Existing SCADA
All remote operations are managed by Private Cloud, to protect operation privacy.

Notes:

MMK Package Contents

AG-300 Plus IoT Gateway
VB-200ST Vibration Gauge
PM-300 Smart Electrical Meter
TT-300 Temperature Gauge

Pro-3200 Portable Vibration Diagnosis Instrument

IIoT Gateway
Built-in WiFi
Vibration Gauges
Mobile Power Pack

Notes:

Just plug the gauges and the mobile power pack to the Gateway and play.

RS485 (Industry standard)
(Built-in WiFi)

USB
Mobile Power Pack

Measurement Reports

17

Notes:

Vibration Data-Base Screen Shots

Notes:

Vibration Data-Base Screen Shots

Notes:

Vibration Data-Base Screen Shots

Notes:

Vibration Data-Base Screen Shots

Notes:

Smart Mechanical Products
Market Profits

Notes:

Trend

Defective repairs are no longer compatible with the needs of the IIoT era, and failure prediction (prevention of maintenance) has become a necessity :
End users purchase equipment from Set-Maker, require fault function prediction.
Set-Maker uses Smart Intelligent maintenance as a standard, and when device is shipped to the end user, informs that the machine has fault prediction capability, therefore winning purchase orders and winning the competition.
TECO/TECOM will sell our MMK upgrade package to Set-Maker. So far, our MMK upgrade package, in the prevention aspect, the overall price performance is far ahead of competition.

Notes:

Investment Deduction

Local Law Legislation : The Ministry of Economic Affairs and the Ministry of Finance announced that they will propose a “Smart Machinery Investment Reduction”, which after ruling by the Executive Yuan revert back to January 01, 2019. ?(The minimum investment is NT $1 million, the maximum investment, tax credit should not exceed NTD $1 billion).
Since then, all end users who purchased the equipment, must ask Set-Maker (equipment maker) if the machine can meet tax exemption reduction. ?The most important function of the Smart Machine capability is fault prediction, which is the core strength of MMK.
Installation of TECOM IoT mechanical upgrade package, now is the right time!!
Following the trend, you can receive the first offer qualification!!!

TECO Group’s new technology, 「Assistance Upgrade Level Industrial Internet of Things IIoT」
The portable vibration diagnostic instrument Pro3200 and the mobile maintenance upgrade Kit(MMK) are popular within Cross Strait (Mainland and Taiwan), which has been strongly reported by media.

Reverting from the traditional vibration measurement instrument, this portable vibration diagnostic device Pro3200 is praised as ?「Black Technology」from Taiwan, as seen in this magazine advertisement cover.

Financial Report

Financial Report-

Consolidated Statements of Comprehensive Income-YOY:9 Months
| | | | Unit: NT$M | |
| --- | --- | --- | --- | --- |
| | 2018 Jan.~Sep. | % | 2017 Jan.~Sep. | % |
| Net Operating Revenue | 1,848.1 | 100 | 2,464.7 | 100.0 |
| Gross Profit | 172.7 | 9.3 | 255.6 | 10.4 |
| Operating Expenses | (261.2) | (14.1) | (303.7) | (12.3) |
| Operating Income(Loss) | (88.5) | (4.8) | (48.1) | (2.0) |
| Net Income(Loss) | (42.9) | (2.3) | (40.4) | (1.6) |
| Basic EPS(NT$) | (0.22) | | (0.26) | |

Notes:

Financial Report-Consolidated Balance Sheets

		Unit: NT$M
Assets	2018/9/30	%	2017/9/30	%
Cash and Cash Equivalents	270.2	11.9	383.9	17.0
Current Assets	1,482.1	65.2	1,518.4	67.2
Total Assets	2,271.8	100.0	2,258.8	100.0
Liabilities and Stockholders' Equity	2018/9/30	%	2017/9/30	%
Short-term Credit	707.4	31.1	682.1	30.2
Current Liabilities	1,298.9	57.2	1,418.7	62.8
Total Liabilities	1,671.2	73.6	1,667.1	73.8
Stockholders' Equity	600.6	26.4	591.7	26.2
Liabilities and Stockholders’ Equity	2,271.8	100.0	2,258.8	100.0

Q & A

Thank You
www.tecom.com.tw