Slide 1: Investor presentation
I n v e s to r p re s e n t a t i o n 1. Company Introduction 2. Market Opportunity 3. Vision and Roadmap 4. Financial Highlights
Slide 2: 1. Company Introduction
1. Company Introduction Dedicated to Compressors Heat Pump Laundry Dryer Application 1999 2013 Developed 44F / 50F with R32 Application Developed 39F/48F with R407C Application , and 44F with R22 Application 2005 2012 Developed DC Developed 44F DC 1991 2015 Compressor 44F Twin Cylinder Rotorex Licen
Slide 3: Rechi Sales: Geographic Breakdown
Rechi Sales: Geographic Breakdown 2014 YoY 歐洲 Europe 3.4% Others Taiwan M East 0% 3% 印度 India 1.3% 1% ASEAN China Japan 16% 11% 日本 0.3% 6% Japan India 臺灣 Taiwan 0.1% 2% N Am Europe 其他 Others -0.5% 38% 23% 中國 China -0.7% 東南亞 SE Asia -0.8% M 中東 East -1.2% 美國 N Am -2.0% 3
Slide 4: Rechi: Competitive Advantages
Rechi: Competitive Advantages Cost Diversification R&D • Global position & • Markets • Precision metal scale • Customers working & design • Manufacturing • New products: efficiency Motors, heat pump, • Privately-owned dehumidifiers, dryers, dishwashers • Energy-saving 4
Slide 5: 2. Market Opportunity: Global A/C Market Trend
2. Market Opportunity Global A/C Market Trend (Unit: 10k) 16000 13951 Growth 13355 13000 12831 13755 12231 Growth 12136 10123 Adjustment 10000 Growth Growth 8831 8642 7644 7235Adjustment 8121 7000 7695 Adjustment RY : August-July 4686 5887 5013 4000 01' 02' 03' 04' 05' 06' 07' 08' 09' 10' 11' 12' 13
Slide 6: China Top 10 A/C Makers
China Top 10 A/C Markers (Unit: 10k) Maker 2014 Growth 2013 Growth 2012 Gree 3,893 3.4% 3,766 6.2% 3,546 Midea 2,861 12.7% 2,538 0.3% 2,530 Haier 935 21.8% 768 8.6% 707 Chigo 560 8.7% 515 7.2% 481 TCL 455 6.4% 428 26.6% 338 AUX 426 -3.3% 440 2.7% 428 Hisense 355 8.4% 327 33.2% 246 Panasonic 303 5.4%
Slide 7: China Top 10 Rotary Compressor Makers
China Top 10 Rotary Compressor Makers (Unit: 10k) Maker 2014 Growth 2013 Growth 2012 GMCC 4302 36.01% 3163 20.04% 2635 LUNDA 3266 30.95% 2494 19.73% 2083 HILY 1792 14.07% 1571 2.49% 1533 RECHI 1386 23.75% 1120 -3.78% 1164 PANASONIC 1125 11.61% 1008 -12.20% 1148 MITSUBISHI 613 19.03% 515 -6.87% 553 L
Slide 8: China Rotary Compressor Exports
China Rotary Compressor Exports Rank Maker 2014 Share 2013 Share 2012 Share 2011 Share 1 RECHI 5,533,537 23.3% 6,002,052 27.3% 5,592,859 30.3% 4,207,209 24.7% 2 GMCC 3,687,724 15.5% 2,221,389 10.1% 1,176,132 6.4% 1,014,572 6.0% 3 Samsung 2,770,584 11.6% 3,055,102 13.9% 2,536,605 13.7% 2,226,970 13.1
Slide 9: Market Share: Target 10% Globally
Market Share: Target 10% Globally Taiwan USA Europe 39% 30% 12% S/E Asia Japan CHINA 3% 14% 9% J A PA N 9% China EUROPE 12% 3% S.AMERICA 13% S.America S/E ASIA 14% 13% USA 30% TA I WA N 39% 0% 10% 20% 30% 40% Source: 2014 10
Slide 10: 3. Vision and Roadmap
3. Vision and Roadmap Mid-Term and Long-Term Strategy Exchange resources with customers to: Increase R&D capability Increase competitiveness Break through technology Obtain market share bottleneck Allocate global market Strengthen strategic cooperation model Strategy Seeking for Opportun
Slide 11: Product Roadmap
Product Roadmap Subversive Innovation Terminal Application BLDC Motor Water Storage (BLDCM) Water pump Products Facility All kinds of driving Motor Heat Pump motors of Water Heater automobile DC drive control Refrigeration& AC/DC Heating Compressor Energy-saving Other parts Appliance Precision machi
Slide 12: Inverter Compressor
Inverter Compressor No 28F、20F Competitor 1.Computer server cool 5.Wearable A/C 2.Bathroom A/C 6.Portable A/C 3.Cable Car A/C 7.Portable Food Box New 4.Automobile A/C Market Heat Pump DC Compressor Competitor Laundry Dryer for Heat Pump Entered Laundry Dryer Dehumidifier RV Application Home A/C Exis
Slide 13: Production Capacity
Production Capacity Qingdao factory Jiujiang factory( DynaRechi) Compressor 9m Preliminary capacity 2m Compressor Pump 6m Final capacity 6m Motor 6m Preliminary capacity 1.5m BLDC motor Final capacity 21m Qingdao Huizhou factory Jiujiang ( TCL Rechi) Compressor 6m Taoyuan Pump 6m Huizhou Kuanyin fac
Slide 14: Location of Facilities
Location of Facilities Cover area: 151,016m2 Cover area: 29,652m2 Qingdao factory: compressor Kwanyin factory: HQ and R&D center Cover area: 298,149m2 Qingdao America Office Jiujiang Taoyuan Jiujiang factory Huizhou India Office Pingtung DC compressor and BLDC motor Humen Cover area: 160,000m2 Cover
Slide 15: R&D
R&D (Unit: Headcount) (Unit: NT$k) Man 研發費用 研發費用佔營收比 Sales R&D Group R&D Expense R&D/Revenue power 450,000 421,607 2.50% 2.33% 2008 39 78 2372 400,000 350,000 292,680 2.00% 2009 36 81 4004 1.78% 300,000 200,854 2010 36 95 4412 1.40% 1.50% 250,000 1.31% 155,366 2011 37 113 4957 200,000 1.09% 0.93% 0.
Slide 16: Energy Saving Contribution Index (ESCI)
Energy Saving Contribution Index (ESCI) 300 250 219 200 148 158 173 150 142 100 63 50 27 36 24 0 2006 2007 2008 2009 2010 2011 2012 2013 2014 ESCI=219 means Energy Saving Contribution 21.9% per Rechi compressor. Annual Energy Saving 2,920,504KW (Average Power Consumption 850W, Annual Sales 13.5m set
Slide 17: Eco & Carbon Reduction
Eco & Carbon Reduction Industrial Regulatory Application Efficiency! Energy Saving Consuming BLDC! Application Pioneer Oil Crisis Application EV ! Motor explained 55% Taiwan power consumption Chairman of Nidec Corporation, Shigenobu Nagamori: 50 years ago, the Steel Industry driving the development
Slide 18: 4. Financial Highlights
4. Financial Highlights Revenue growth Margins (Unit: NT$m) 18
Slide 19: ROE and ROA, Operating CF & Capex
ROE and ROA Operating CF & Capex (Unit: NT$m) 19
Slide 20: Dividend Policy
Dividend Policy 2011 2012 2013 2014 EPS (NT$) 2.03 2.14 2.02 2.3 Cash DPS (NT$) 1.2 1.5 1.5 2 Payout ratio (%) 59.1 70.1 74.3 87.0 Cash yield (%)* 4.7 5.4 4.6 - * Based on share price on following year closing before ex-dividend day 20
Slide 21: Income Statement
Income Statement Unit in Thousand NT$ 2,014 YoY 2,013 YoY 2,012 YoY Amount ％ ％ Amount ％ ％ Amount ％ ％ Sales revenues 18,126,566 100 10 16,473,387 100 8 15,285,474 100 -9 Cost of finished goods (Material and labor) -14,972,321 -82.6 9 -13,757,595 -83.5 8.4 -12,693,681 -83.0 -11.9 Gross margin 3,154,24
Slide 22: Balance Sheet
Balance Sheet Unit in Thousand NT$ 2014 2013 2012 Amount ％ Amount ％ Amount ％ Cash and equivalents 4,598,024 21 3,328,483 17 1,929,908 11 Accounts receivable,net 3,062,321 14 2,302,949 12 2,203,424 13 Inventories 2,116,503 10 1,963,464 10 1,462,224 9 Property,plant and equipment,net 6,112,524 29 5,66
Slide 23: Cash Flow Statement
Cash Flow Statement Unit in Thousand NT$ 2014 2,013 2,012 Amount Amount Amount CASH, BEGINNING OF YEAR 3,328,483 1,929,908 3,181,014 Net cash provided by operating activities -56,997 2,063,200 1,224,268 CASHFLOW FROM INVESTMENT ACTIVITIES 1,068,405 -2,388,182 -1,551,923 (Decrease) increase in short-
Slide 24: Appendix: BLDC Motors
Appendix: BLDC Motors Application of BLDC motors domestic use/ commercial use water pump Water Jet Pump/ Draining pump of Dish Washer Oxygen generator RO motor A/C( split, window, cabinet) Air Cleaner Household Pump Smoke Exhauster Washing Machine Appliances Facility Ceiling Fan Water hea
Slide 25: BLDC Motors: Final Product Application Innovation
BLDC Motors Final Product Application Innovation Downstream DYNA RECHI 1.Product Development ◆Fan Motor ◆ Customerization Integration ◆Power ◆R&D for BLDCM 2.Subversive Product licensing Transmission and Application and sales ◆Pump Equipment ◆Production of BLDCM 3. ODM Sales ◆Machining Tool ◆Global
Slide 26: BLDC Motors
BLDC Motors No Transmission Competitor Direct Drive Exercise Control Screw /Belt Linear Motor New Market Air Cleaner Fluid Competitor Ventilator Entered Industrial Fluid Pump Fan Motor Water Heater Water Heater Ceiling Fan Application Home Water Fan Motor Pump Existing Rechi Inverter Market Entered
Slide 27: Business Model
Business Model Fixed Speed Compressor Inverter Compressor BLDCM Outdoor Unit + High Controller Efficiency Modulization Condenser + Fan More Cost Effective 27