TPK — Interim / Quarterly Report 2020

Apr 29, 2020

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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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TPK Proprietary & Copyright © All Rights Reserved

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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1Q20 Result Summary 2020年第一季營運簡報

NT$	Revenues	Net Profits	EPS
1Q20	28.2 bn	40 mn	0.10

• Minimum impact from COVID-19

• Better-than-expected revenues due to strong demand from tablets and NB

• Operating expenses was controlled at a recent historical low level of NT$902 million, or 3.2% of sales

• Remained profitability and healthy cashflow despite seasonal demand weakness, owing to favorable product mix

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Financials

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1Q20 Profit & Loss

2020年第一季損益表

Profit & Loss	QoQ 1Q19 YoY 1Q20 4Q19
(NT$ million) Revenues COGS Gross Profits Operating Expenses SG&A R&D Operating Profits Non-Op Inc/(Exp) Int Inc/(Exp) FX Gain/(Loss) Others Earnings Before Tax Income Tax Net Income (Parent) EPS (Parent) EBITDA	(23.7%) 31,156 (9.5%) (29,944) 56.0% 1,212 (16.6%) (1,094) (821) (273) N.A. 119 (8.3%) 109 (86) (1) 196 228 (160) 24 0.06 2,463 (27,180) (36,296) 28,192 36,945 1,011 648 (902) (1,100) (705) (812) (197) (288) 109 (452) 179 305 (34) (41) 93 (55) 120 401 288 (147) (248) 49 40 (98) 0.10 (0.24) 2,140 1,927
Margin: GM OM NM OpExp	3.9% 0.4% 0.1% (3.5%) 3.6% 1.8% 0.4% (1.2%) 0.1% (0.3%) (3.2%) (3.0%)

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Note: 1Q20 Fully Diluted Weighted Average: 406,712 thousand shares

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Quarterly Sales by Form Factors 季營收結構

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1Q20 Balance Sheet

2020年第一季資產負債表

Balance Sheet	2020/3/31 2019/12/31 2019/3/31
(NT$ million) Cash Equivalents Debt Inv with no active market Receivables Other Receivables Inventories Current Assets PP&E Total Assets ST Loans Payables Current Liabilities LT Loans Total Liabilities Common Shares Retained Earnings Total Shareholder's Equities	21,462 17,202 16,059 14,362 8,554 6,856 9,582 12,894 12,176 8,177 4,328 3,848 7,393 8,202 8,260 61,662 51,661 47,949 26,765 27,887 32,876 94,196 85,493 86,328 22,426 9,099 11,027 15,110 18,328 15,184 43,506 33,535 32,093 9,419 10,571 12,426 57,738 49,324 48,879 4,067 4,067 4,067 2,599 2,559 2,437 36,458 36,169 37,449
Ratio Analysis: Quick Ratio Current Ratio ROE (YTD Annualized) Net Debt to Equity	1.25 1.30 1.24 1.42 1.54 1.49 0.4% 0.6% 0.7% 0.28 0.07 0.20

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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 2020

Taipei, Taiwan, April 29[th] , 2020 – TPK Holding Co., Ltd (TWSE: 3673) (“TPK” or the “Company”) today announced 2020 first quarter operating results. Company reported sales of NT$28,192 million and net profits of NT$40 million, equivalent to earnings per share of NT$0.10 for the quarter.

1Q20 Operating Results

First quarter revenues were NT$28,192 million, down 9.5% year-on-year and down 23.7% quarter-on-quarter. The sequential decline in revenues was attributable to seasonal demand weakness and fewer working days in 1Q due to Chinese New Year. The company’s operation in the first quarter was mildly affected by the COVID-19 pandemic given the tight control of workforce and relatively minor infection situation in Xiamen area. The revenues decline was better than original forecast, primarily due to surging demand for tablet and notebook computer driven by increasing population of work from home and remote learning. The Company remained profitable despite reduced business scale due to favorable product mix change and effective control of variable cost. 1Q20 gross profit amounted to NT$1,011 million and gross margin was 3.6%.

In terms of COGS, raw material cost, as a percentage of sales, remained at 83.9% in the first quarter, similar to 83.8% in 4Q19. In addition, depreciation cost decreased by NT$200 million versus previous quarter to NT$1.5 billion, as 5.3% of revenues, up from 4.6% in 4Q19 due to smaller business scale. On the backdrop of effective cost management, labor cost, as a percentage of sales was 5.6%, slightly up from 5.5% in 4Q19.

Operating expenses decreased from NT$1,100 million in 4Q19 to a recent historical low of NT$902 million in the first quarter given a reduced business scale and effective cost control. Net interest expense for the quarter were NT$34 million, lower than NT$41 million in the last quarter. The Company recorded foreign exchange gain of NT$93 million in 1Q20, as a result of Renminbi depreciation versus US dollar. Net profit per share amounted to NT$0.10.

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Balance Sheet & Cash Flow

The Company seized the arbitrage opportunity from volatile financial market to increase the risk-free cash management products with high interest rate. Hence, Company had cash and cash equivalent of NT$21.5 billion and financial assets measured at amortized cost of NT$14.4 billion as of March 31[st] 2020, up from NT$17.2 billion and NT$8.6 billion respectively at the end of 2019. In the meantime, total bank borrowings amounted NT$31.8 billion as of March 31[st] , up from NT$19.7 billion at the end of previous quarter. Capital expenditure for the quarter was NT$194 million on accrual basis. 1Q20 EBITDA amounted to NT$2.1 billion.

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

IR Contact

Freddie Liu, Chief Strategy Officer Tracy Tsai, Chief Financial Officer Kevin Wang, Senior 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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1Q20 PROFIT & LOSS

1Q20 PROFIT & LOSS
Profit & Loss	QoQ 1Q19 YoY 1Q20 4Q19
(NT$ million) Revenues COGS Gross Profits Operating Expenses SG&A R&D Operating Profits Non-Op Inc/(Exp) Int Inc/(Exp) FX Gain/(Loss) Others Earnings Before Tax Income Tax Net Income (Parent) EPS (Parent) EBITDA	(23.7%) 31,156 (9.5%) (29,944) 56.0% 1,212 (16.6%) (1,094) (821) (273) N.A. 119 (8.3%) 109 (86) (1) 196 228 (160) 24 0.06 2,463 (27,180) (36,296) 28,192 36,945 1,011 648 (902) (1,100) (705) (812) (197) (288) 109 (452) 179 305 (34) (41) 93 (55) 120 401 288 (147) (248) 49 40 (98) 0.10 (0.24) 2,140 1,927
Margin: GM OM NM OpExp	3.9% 0.4% 0.1% (3.5%) 3.6% 1.8% 0.4% (1.2%) 0.1% (0.3%) (3.2%) (3.0%)

Note: 1Q20 Fully Diluted Weighted Average: 406,712 thousand shares

1Q20 BALANCE SHEET

1Q20 BALANCE SHEET
Balance Sheet	2020/3/31 2019/12/31 2019/3/31
(NT$ million) Cash Equivalents Debt Inv with no active market Receivables Other Receivables Inventories Current Assets PP&E Total Assets ST Loans Payables Current Liabilities LT Loans Total Liabilities Common Shares Retained Earnings Total Shareholder's Equities	21,462 17,202 16,059 14,362 8,554 6,856 9,582 12,894 12,176 8,177 4,328 3,848 7,393 8,202 8,260 61,662 51,661 47,949 26,765 27,887 32,876 94,196 85,493 86,328 22,426 9,099 11,027 15,110 18,328 15,184 43,506 33,535 32,093 9,419 10,571 12,426 57,738 49,324 48,879 4,067 4,067 4,067 2,599 2,559 2,437 36,458 36,169 37,449
Ratio Analysis: Quick Ratio Current Ratio ROE (YTD Annualized) Net Debt to Equity	1.25 1.30 1.24 1.42 1.54 1.49 0.4% 0.6% 0.7% 0.28 0.07 0.20

Note: PP&E includes prepayments.

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