TPK — Interim / Quarterly Report 2017

May 24, 2017

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TPK Proprietary & Copyright © All Rights Reserved

Disclaimer Statement

This presentation and release may contain ‘forward-looking statements’ which may include projections on future results of operations, financial condition and business prospects based on our own information and other sources.

The actual results of operations, financial condition and business prospects may differ from those explicitly or implicitly indicated in those forward-looking statements for a variety of reasons, including but not limited to market demand, price fluctuations, competition, supply chain issues, global economic conditions, exchange rate fluctuation and other risks and factors beyond TPK’s controls.

The forward-looking statements in this presentation, if any, only reflect the current view of TPK Holding Co., Ltd. as of the date of its release. TPK undertakes no obligation to update those forward-looking statements for events or circumstances that occur subsequently.

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Disclosure Notice

公告原則

• All financial numbers are prepared in accordance with IFRS which is approved by regulators in Taiwan

• All financial numbers are unaudited

• 本公司財務報表係依照臺灣主管機關認可之國際財務報 導準則編製

• 所有財務數字均為本公司自結數

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1Q17 Result Summary

2017年第一季營運簡報

1Q17	Revenues	Net Profits	EPS
NT$	21.4 bn	616 mn	1.78

• Sequential decline in revenues attributable to slow seasonality and fewer working days in 1Q

• Targeted profitability achieved despite lower capacity utilization and unfavorable product mix

• Divestment gains from non-core investment, TES, and land in Pingtan

• Expects 2017 to be back-end loaded driven by new products ramping up

• Strategic alliance with O-Film in progress

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1Q17 Profit & Loss

2017年第一季損益表

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季損益表
Profit & Loss	QoQ 1Q16 YoY 1Q17 4Q16
(NT$ million) Revenues COGS Gross Profits Operating Expenses SG&A R&D Operating Profits Non-Op Inc/(Exp) Int Inc/(Exp) FX Gain/(Loss) Invest Inc/(Loss) Others Earnings Before Tax Income Tax Net Income (Parent) EPS (Parent) EBITDA	(13.4%) 21,239 0.8% (20,248) 991 (1,348) (1,128) (219) (357) 280 (182) (114) 52 524 (76) 92 52 0.15 2,443 3,290 3,035 (122) (215) 616 296 1.78 0.89 - 49 955 528 741 519 621 564 (235) (245) (100) 232 (877) (1,141) (203) (253) 120 (45) (20,215) (23,375) 1,200 1,349 (1,080) (1,394) 21,415 24,724
Margin: GM OM NM OpExp	4.7% (1.7%) 0.2% (6.3%) 2.9% 1.2% (5.0%) (5.6%) 5.6% 5.5% 0.6% (0.2%)

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Quarterly Sales

季營收

0 10,000 20,000 30,000 40,000 50,000 NT$ mm	28,949 23,741 34,235 34,438 21,239 17,085 26,16824,724 21,415 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 4Q16 1Q17

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Quarterly Sales by Form Factors

季營收結構

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＜ 7" 7" ≦ X 11" 11" ≦ X 16" X ≧ 16" Others
100%
24%
80% 25%
27%
30% 33%
60%
19%
26%
21%
29% 24%
40%
50%
44% 44%
20%
34%
30%
0%
1Q16 2Q16 3Q16 4Q16 1Q17
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1Q17 Balance Sheet

2017年第一季資產負債表

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alance Sheet 資產負債表
Balance Sheet	2017/3/31 2016/12/31
(NT$ million) Cash Equivalents Debt Inv with no active market Receivables Inventories Current Assets Long-term Investments Property, Plant and Equipment Total Assets ST Loans Payables Current Liabilities Convertible Bonds LT Loans Total Liabilities Common Shares Non-Controlling Interest Total Shareholder's Equities	19,498 20,490 619 1,387 5,255 7,646 6,583 7,816 37,491 40,881 258 346 39,249 42,052 80,668 87,683 25,003 30,534 10,396 12,125 42,579 48,472 6,227 6,575 1,237 1,122 52,031 58,271 3,466 3,466 235 239 28,637 29,412
Ratio Analysis: Quick Ratio Current Ratio ROE (YTD Annualized) Net Debt to Equity	0.73 0.68 0.88 0.84 8.6% (4.9%) 0.45 0.60

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Note: PP&E includes prepayments.

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FOR IMMEDIATE RELEASE

TPK REPORTS UNAUDITED CONSOLIDATED FINANCIAL RESULTS FOR THE FIRST QUARTER OF 2017

Taipei, Taiwan, April 28[th] , 2017 – TPK Holding Co., Ltd (TWSE: 3673) (“TPK” or the “Company”) today announced 2017 first quarter operating results. Company reported net profit of NT$616 million, or earnings per share of NT$1.78 for the quarter.

Operating Results

Consolidated revenues in 1Q17 were NT$21,415 million, up 0.8% year-on-year and down 13.4% versus the previous quarter. The sequential decline in revenues was primarily attributable to slower seasonality and fewer working days in the first quarter. Gross profit amounted to NT$1,200 million. Gross margin remained unchanged albeit lower revenue versus previous quarter, due to improvement in production efficiency and manufacturing yield rate.

Within the cost-of-goods-sold items, raw material cost was NT$15.8 billion, down from NT$18.1 billion in 4Q16. Labor cost was NT$1.8 billion, down from NT$2.1 billion in the previous quarter, as a special incentive program was accrued in 4Q16. Depreciation expenses stayed flat at NT$2.1 billion for the quarter.

First quarter operating expenses totaled NT$1.1 billion, down from NT$1.4 billion in 4Q16, reflecting lower production level in the first quarter. Net interest expenses for the quarter totaled NT$235 million. We also recorded foreign exchange loss of NT$100 million in Q1 due to weaker RMB against US dollar. We are less affected by USD/NTD fluctuation as our functional currency is USD. In 1Q17, the Company also realized disposal gains from the closing of the second trench of TES share sale for NT$370 million and a parcel of land in Pingtan (Jinshunxin Development) for NT$443 million. As of March 31 2017, total number of employees was 28,489, similar to 28,158 at the end of 2016.

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Balance Sheet & Cash Flow

As of March 31, 2017, Company had cash and cash equivalent of NT$19.5 billion, comparing to NT$20.5 billion at 2016 year end. Total bank borrowings, including RMB bonds, totaled NT$26.2 billion, down from NT$31.7 billion at the end of 2016, reflecting Company’s continuous efforts in reducing financial leverage. Net-debt-to-equity ratio improved to 0.45 from 0.60 on December 31, 2016. EBITDA in 1Q17 amounted NT$3.3 billion. Capital expenditures during the first quarter amounted to NT$2.3 billion on accrual basis. The increase on equipment orders was largely for new product launches in the second half of this year. Total capital expenditure is budgeted for NT$4.5 billion for 2017. Operating cashflow will be sufficient to cover the capital expenditure and further reduce bank debt.

Note: All financial numbers are prepared in accordance with IFRS which is approved by regulators in Taiwan.

IR Contact: Freddie Liu, Chief Financial Officer Kevin Wang, Director Tel: +886.2.7727.1196 ir@tpk.com

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ABOUT TPK

TPK was founded solely for touch solutions in 2003. We are the inventor of transparent glass-based projected capacitive (P-Cap) touch solutions and the first company for mass production. Since 2Q 2010, TPK has expanded its touch product offering into PET-film based solutions. Our production sites are located in Xiamen City of Fujian Province, China. TPK is completely and vertically integrated for one-stop shopping for touch solutions.

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1Q17 PROFIT & LOSS

Profit & Loss	QoQ 1Q16 YoY 1Q17 4Q16
(NT$ million) Revenues COGS Gross Profits Operating Expenses SG&A R&D Operating Profits Non-Op Inc/(Exp) Int Inc/(Exp) FX Gain/(Loss) Invest Inc/(Loss) Others Earnings Before Tax Income Tax Net Income (Parent) EPS (Parent) EBITDA	(13.4%) 21,239 0.8% (20,248) 991 (1,348) (1,128) (219) (357) 280 (182) (114) 52 524 (76) 92 52 0.15 2,443 3,290 3,035 (122) (215) 616 296 1.78 0.89 - 49 955 528 741 519 621 564 (235) (245) (100) 232 (877) (1,141) (203) (253) 120 (45) (20,215) (23,375) 1,200 1,349 (1,080) (1,394) 21,415 24,724
Margin: GM OM NM Op Exp	4.7% (1.7%) 0.2% (6.3%) 2.9% 1.2% (5.0%) (5.6%) 5.6% 5.5% 0.6% (0.2%)

1Q17 BALANCE SHEET

1Q17 BALANCE SHEET
Balance Sheet	2017/3/31 2016/12/31
(NT$ million) Cash Equivalents Debt Inv with no active market Receivables Inventories Current Assets Long-term Investments Property, Plant and Equipment Total Assets ST Loans Payables Current Liabilities Convertible Bonds LT Loans Total Liabilities Common Shares Non-Controlling Interest Total Shareholder's Equities	19,498 20,490 619 1,387 5,255 7,646 6,583 7,816 37,491 40,881 258 346 39,249 42,052 80,668 87,683 25,003 30,534 10,396 12,125 42,579 48,472 6,227 6,575 1,237 1,122 52,031 58,271 3,466 3,466 235 239 28,637 29,412
Ratio Analysis: Quick Ratio Current Ratio ROE (YTD Annualized) Net Debt to Equity	0.73 0.68 0.88 0.84 8.6% (4.9%) 0.45 0.60

Note: PP&E includes prepayments.

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