Rechi Precision Co. Ltd. · TWSE:4532

Rechi Precision — Investor Presentation (September 2016)

32 slides from Rechi Precision's investor presentation, Sep 1, 2016

  1. Slide 1: Investor Conference

    () RECHI PRECISION CO., LTD. Investor Conference

  2. Slide 2: Agenda

    Agenda 1. Company Introduction 2. Financial Highlights 3. Market Opportunity and Competitive Advantage 4. Future Prospects 2

  3. Slide 3: Company Introduction

    § Company Introduction § RECHI

  4. Slide 4: Main shareholders

    Main shareholders SAMPO Corporation 27.03% China Steel Corporation 4.91% Sharp Corporation 4.86% Porite Taiwan Co., Ltd 2.09% National Electric Appliance Co., Ltd 1.71% Data as of June 2, 2016 4

  5. Slide 5: Organization structure

    Organization structure R E C H I P R E C I S I O N C O . , LT D 100% 100% 45% Rechi Investments RechiHoldings Co., Ltd. Dyna Rechi Co., Ltd. Co., Ltd. 100% 100% 100% RechiInternational Rechi InvestmentsHoldings 100% 77.78% 100% Dyna RechiHoldingsCo.,Ltd. HoldingsCo.,Ltd. Co.,Ltd. 100% 100% 100% GRHo

  6. Slide 6: Location of facilities

    Location of facilities Cover area: 151,016m2 Cover area : 29,652m2 Qingdao factory: compressor Kwanyin factory: HQ and R&D center QR KR Cover area: 298,149m2 JR/DRJ America Office India Office DC compressor and BLDC motor HR DNR TR Cover area: 20,000m2 Cover area : 34,194m2 Cover area : 160,000m2 Hu

  7. Slide 7: RECHI milestone

    RECHI milestone 2020 Target：Accumulative Sales Quantity reached 2016 200 million sets. Accumulative Quantity of July 31, 2016 Sales：129,538,887 sets Production ：130,675,435 sets 2014 Accumulative Sales Quantity reached 100 million sets. 2011 2020 2016 Annual Sales Quantity exceed 2015 2014 10million

  8. Slide 8: Financial Highlights

    # Financial Highlights § RECHI

  9. Slide 9: RECHI Sales: Geographic distribution

    RECHI Sales : Geographic distribution Europe 28% China N American Japan 13% 24% Middle East 5% 2% Taiwan India 2% 3% SE Asia S American 8% 15% data statistics : 2015 9

  10. Slide 10: Market Share: more than 80% in Europe

    The sales quantity of Heat-Pump Dryer compressor ★ Market Share: more than 80% in Europe (Unit: 10k) 300 250 233 196 200 150 131 106 100 75 46 50 0 '10 '11 '12 '13 '14 '15 '16(F) '17(F) '18(F) '19(F) 10

  11. Slide 11: Revenue growth and margins

    (Unit: NT$mn) Revenue growth Margins 11

  12. Slide 12: ROE and ROA; Operating CF & CAPEX

    ROE and ROA (Unit: NT$mn) Operating CF & CAPEX 12

  13. Slide 13: Dividend policy

    Dividend policy 2011 2012 2013 2014 2015 EPS (NT$) 2.03 2.21 2.02 2.30 1.86 Stock DPS (NT$) 0.3 0.3 0.3 - - Cash DPS (NT$) 1.2 1.5 1.5 2 1.6 Payout ratio (%) 59.1 67.9 74.3 87 86 Cash yield (%)* 5.1 5.6 5.1 8.6 6.2 * Based on share price on following year closing before ex-dividend day 13

  14. Slide 14: Income statement

    @) Income statement Unit in Thousand NT$ 2016H1 % 2015H1 % YoY % Sales volume 7,712,256 6,805,958 906,298 13.3 Sales revenues 9455705 100 8891415 100 564290 63 Cost of finished goods (Material and labor) 65,658 r Gross margin 2,177,924 23.0 1,547,976 174 629948 407 Operating expenses 15.6 Income(Los

  15. Slide 15: Balance sheet

    Balance sheet Unit in Thousand NT$ 2016H1 ％ 2015H1 ％ YoY % Cash and equivalents 3,098,466 15 4,222,599 19 -1,124,133 -27 Accounts receivable,net 3,449,333 16 4,062,194 18 -612,861 -15 Inventories 1,765,102 8 1,793,366 8 -28,264 -2 Property,plant and equipment,net 5,994,509 28 5,776,715 26 217,794 4

  16. Slide 16: Cash flow statement

    Cash flow statement Unit in Thousand NT$ 2016H1 2015H1 Cash, beginning of year 4,242,008 4,598,024 Net cash provided by operating640,519 activities 526,567 Cash flow from investment activities -362,347 -1,271,210 (Decrease) increase in short-term-644,096 loans, net 425,486 (Decrease) increase in lon

  17. Slide 17: Market Opportunity and Competitive Advantage

    Market Opportunity and Competitive Advantage 17

  18. Slide 18: Global A/C market trend

    Global A/C market trend (Unit: 10k) RY : August-July Reference : IOL, HENGTA, GI 18

  19. Slide 19: China top A/C makers

    China top 10 A/C makers (Unit: 10k) 2016年 Growth Maker 2015 Growth 2014 Growth 2013 Growth 2012 (H1) (H1) GREE 1572 -23.6% 3620 -7.8% 3927 2.0% 3851 3.1% 3734 MIDEA 1383 -27.3% 2712 -6.7% 2906 8.3% 2684 11.0% 2419 HAIER 416 -13.4% 754 -13.3% 869 2.3% 850 14.1% 745 CHIGO 349 5.2% 495 -8.2% 539 -1.1%

  20. Slide 20: China top rotary compressor makers

    China top 10 rotary compressor makers (Unit: 10k) 2016年 Growth Maker 2015 Growth 2014 Growth 2013 Growth 2012 (H1) (H1) GMCC 2740 -5.4% 4241 -3.8% 4408 25.9% 3502 35.1% 2593 LANDA 1305 -16.6% 3055 -15.4% 3613 32.8% 2721 14.3% 2381 HIGHLY 1005 9.0% 1511 -16.5% 1811 9.7% 1650 7.1% 1540 RECHI 771 13.3%

  21. Slide 21: Competitive advantage - marketing

    Competitive advantage-marketing ★ Owns complete global marketing channels service 28 countries，148 Clients 21

  22. Slide 22: Competitive advantage - production

    Competitive advantage - production ★Excellent Manufacturing technology and efficiency ★More cost effective ★High product performance -RECHI products was deeply trusted by DAIKIN, MIELE and so on. Jiujiang factory( DynaRechi) Preliminary capacity 2 million Qingdao factory compressor Final capacity 6

  23. Slide 23: Competitive advantage - products

    Competitive advantage - products High energy-efficiency Less noise Energy Efficiency Standards ★ A/C and Dehumidifier Energy Star in USA ※Flow induced noise analysis and design ★TAIWAN CSPF and CHINA class 1 ※Structure modal analysis and design ★ A /C Five Star Standards in INDIA ※Acoustic analysis

  24. Slide 24: Competitive advantage – R&D capability

    Competitive advantage – R&D capability ★Professional R&D Team： average more than 7years of experience(Master and PHD 33%) ★High precision test device and laboratory：Calorimeter26 sets、Vibration & noise test chamber 11 sets、Reliability test lab 18 sets、Locked-rotor test lab 14 sets. ★Industry-univers

  25. Slide 25: Future Prospects

    Future Prospects 25

  26. Slide 26: Development strategy

    Development strategy Pursue Create New Energy Saving market opportunity Technology Market Value Innovation Demand Innovation Strategy New Energy Saving products 26

  27. Slide 27: Mid-term and long-term plan - sales

    Mid-term and long-term plan - sales Compressor BLDC Motor (Unit: 10k) Target：Accumulative (Unit: 10k) Sales Quantity reached 2,500 200 million sets. 2,000 1,500 1,000 500 - '12 '13 '14 '15 '16(F) '17(F) '18(F) '19(F) '20(F) 27

  28. Slide 28: Mid-term and long-term plan - sales, other business

    Mid-term and long-term plan - sales Other business 2020 target revenue 7.5% ★Builds leader brand ★Develops new markets in Taiwan market for compressor motor ★Horizontal alliances Compressor Heat Pump ★Develops oversea market motor Water Heater business business Module Precision machining ★Develops ★

  29. Slide 29: Mid-term and long-term plan - production capacity

    Mid-term and long-term plan - production capacity ★Raise production capacity quickly in Jiujiang factory ★Become Intelligence factory ★Builds module products lines in KR ★The key area in the future - INDEA Compressor BLDC Motor (Unit: 10k) (Unit: 10k) 29

  30. Slide 30: Mid-Term and Long-Term plan - product development

    Mid-Term and Long-Term plan - product development Develops VRF compressor Develops compressor for 3rd generation of refrigerant Develops mini compressor Develops BLDC motor (for A/C) series Develops BLDC motor (for non A/C) Develops Subversive innovation end products and module products 30

  31. Slide 31: Upgrades RECHI management systems

    Upgrades RECHI management systems Raise company's competitiveness process and Organization Intelligence system improvement factory improvement 31

  32. Slide 32: Thank you

    Thank you Create unlimited possibilities for the Energy Saving Industry. Become the top provider of proactive Energy Saving Product.

Rechi Precision — Investor Presentation (September 2016) on 6ix