Sporton International Inc. · TPEX:6146
Sporton International — Q3 2022 Earnings Presentation
38 slides from Sporton International's earnings presentation, Nov 9, 2022
Slide 1: Sporton International Inc.
SPORTON LAB. SPORTON INTERNATIONAL INC. Finance Director Grace Pan Special Assistant of G.M. Office David Chou Date: 11/09/22
Slide 2: Outline
Outline (1) Industry Trends & Growth Momentum 3Q Financial Analysis Report Business Opportunities from Developing Technology (3) Business Operation & Core Strengths
Slide 3: Industry Trends & Potential Growth Momentum
@) Industry Trends & Potential Growth Momentum
Slide 4: Current Market Trends
Current Market Trends The competition between Snapdragon 8 Gen 2 and Dimensity 9200 features the two major 5G chipmakers facing off against each other to increase market share in the mmWave and Wi-Fi 7 market. Smartphones that are Wi-Fi 7 compatible will be available by the end of this year. Applica
Slide 5: Current Market Trends—Development of 5G+AIoT
Current Market Trends—Development of 5G+AIoT 2021 2022 2023 2024 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Protocol Stage 3 Rel-17 Freeze Coding Freeze Package Stage 2 Protocol Stage 3 Rel-18 (Content) Functional Coding Approval Freeze Freeze Freeze mmWave + Wi-Fi 7 https://www.3gpp.org 、Anritsu
Slide 6: Principle of Carrier Aggregation (CA) and Comparison between NSA and SA
Principle of Comparison between Carrier Aggregation (CA) NSA and SA Carrier Aggregation (CA): The foundation for deploying high-performing 4G and 5G networks. 4G 5G NSA 5G SA 20 MHz 4G Core 4G Core 5G Core 10 MHz 4G Base Station 4G & 5G Base Station 5G Base Station 5 MHz (1) Improve cell coverage (2
Slide 7: Market statistics on 5G equipment and terminal products
Market statistics on 5G equipment and terminal products As reported by GSA (Global mobile Suppliers Association), the number of announced 5G devices has reached a total of 1,521, which is a 4.6% increase between July 2022 and August 2022. Among all announced 5G devices, 77.3% of them (1,175 devices)
Slide 8: Current Market Trends—Wireless
Current Market Trends—Wireless 2007 2013 2019/2021 2024 Wi-Fi 4 Wi-Fi 5 Wi-Fi 6 / 6E Wi-Fi 7 X 11.5 X 1.3 X3 802.11n 802.11ac 802.11ax 802.11be ~600 Mbps ~7 Gbps ~9.6 Gbps ~36 Gbps As Wi-Fi 7 devices enter the market, the competition in the terminal market starts in advance. Wi-Fi 7-capable smartpho
Slide 9: 5G + Wi-Fi + BT: Stable Connections, Seamless Service
5G + Wi-Fi 6 + BT: Stable Connections, Seamless Service Smart Home Wi-Fi 6E + BT Smart TV Wi-Fi 6E Mobile Devices CPE/WFA Wi-Fi 6E BT 5G NR mmWave + Wi-Fi 7 Smartphone 5G NR mmWave + Wi-Fi 7 Wi-Fi Router Wi-Fi 6E Others (drone, head-mounted display, Material source ：5G Americas、GSA 、Ericsson 、 DIDIT
Slide 10: VR, AR, MR, XR—Wireless Network Applications
VR, AR, MR, XR—Wireless Network Applications for Various Types of Virtual Reality Terminals Virtual Reality (VR) Augmented Reality (AR) Mixed Reality (MR) X-Reality/Cross Reality (XR) For outdoor use—mmWave For indoor use—Wi-Fi 6E/7 Reference: JIRAROJ PRADITCHAROENKUL/Getty Images 、Rolling Stone
Slide 11: Customized R&D and Sales of Passive Components
Customized R&D and Sales of Passive Components 1 Specialized Inductive Product Niche Market Provider Provide R&D / Custom Solutions Add Value to Our Products – High-performance NFC antenna (RF) Testing Specialization X86 chipset with customized Our safety testing specialization inductors (System & S
Slide 12: Quality First Policy – Parts Department
Quality First Policy – Parts Department Strictly follows the ISO 9001 Standard to successfully fulfill our quality objectives and risk management standards. Manufacturing Product Completion Before Shipment 1 2 3 4 IQC (Incoming Quality Control) IPQC (In Process Quality Control) FQC (Final Quality Co
Slide 13: Business Operation & Core Strengths
@) Business Operation & Core Strengths
Slide 14: Business Operation
Business Operation 91.5% 1 Testing and Certification Mandatory Regulatory Compliance Following the guidelines and rules set by government organizations to legally launch a product. 8.5% EMC (Electro-Magnetic Compatibility) Safety Inspection of battery, smartphone, communications, and audio and video
Slide 15: Business Operation
Business Operation 2 Conformance and Performance Testing Technical specifications of communication protocols required by phone carriers. Comprehensive testing and certification for 2G, 3G, 4G, and 5G devices Testing and certification services for Radio Frequency (RF) products Testing for automotive
Slide 16: Business Capacity
Business Capacity With 108 major testing facilities, Sporton has the highest testing capacity in the world. 966 semi-anechoic chamber (US standard) Fully anechoic chamber (European standard) SAR testing (Specific Absorption Rate) OTA Antenna performance testing
Slide 17: Having the world's largest testing laboratory
1. International Certification Co.(ICC): Service location ICC is a wholly owned subsidiary. California in Germany Founded in 2013, it has been profitable testing site since 2014. 2. Sporton ShenZhen was founded in Offering simultaneous testing services 2017. The lab specializes in IoT testing. at mu
Slide 18: 5G NR Case Counts Published by FCC/NCC
2022/01/01 – 2022/09/30 Case Market 5G NR Case Counts FCC 5G NR (Original Equipment) Count Share Sporton 84 34.01% Published by FCC/NCC UL 31 12.55% CAICT 21 8.50 HCT 19 7.69% PCTEST (Element) 14 5.67% Balun 10 4.05% Morlab 10 4.05% 2022/01/01 – 2022/09/30 Case Market SGS 9 3.64% JianYan Testing 9 3
Slide 19: High-end Wi-Fi 6E Devices Case Count Published by FCC
High-end Wi-Fi 6E Devices Case Count Published by FCC FCC Filing Projects (2022/01/01 – 2022/09/30) Client Device Case Market Laboratory Count share FCC Filing Projects (2022/01/01 – Sporton + ICC 33 42.9% 2022/09/30) Master Device AUDIX 9 11.7% Case Market UL (Korea) 7 9.1% Laboratory Count share H
Slide 20: SPORTON: A Third-Party Testing Laboratory with Integrity
SPORTON: A Third-Party Testing Laboratory with Integrity We endeavor to deliver timely and accurate testing results for all of our clients. 20
Slide 21: For Those WITHOUT Integrity and Quality…
For Those WITHOUT Integrity and Quality… Recently, the Federal ╳ Fraudulent or non- Communications Commission (FCC, compliant testing reports US), National Communications will increase the risk of Commission (NCC, ROC), and Ministry being issued invalid of Science and ICT (MSIT, South certifications
Slide 22: Testing Certification Structure – Core Strengths
Testing Certification Structure – Core Strengths In-house testing for OTA performance testing. US Carrier *4 Partial in-house testing for FT & LC CAT Vodafone/DCM/Telstra Outsourcing test items that are not (Cert. by Internal Lab) Carrier Approval covered in our laboratories. GCF v3.85 Conformance N
Slide 23: Regulatory OTA / Field Trial
Regulatory OTA Regulatory Antenna Performance Authorities Testing o CE/FCC/NCC o CTIA (Cellular Telecommunications and Internet Association) o Telecommunication Network Operators in Europe/North America Field Trial FTA Worldwide Conformance Testing Telecommunication o Global Certification Network Op
Slide 24: Standard-setting Civil Society Organizations
Standard-setting Civil Society Organizations Cellular Telecommunications Third Generation Partnership Institute of Electrical and Near Field Communication and Internet Project (3GPP) Electronics Engineers (IEEE) (NFC) Forum Association (ctia) 5G Automotive PCS Type Certification Global Certification
Slide 25: Certification Body / National Certification Body
Certification Body National Certification Body International American National Laboratory Association Communications Accreditation for Laboratory Commission (NCC) Cooperation Accreditation Mutual (A2LA) Recognition Arrangement (ILAC MRA) China National Accreditation Taiwan Service for Accreditation
Slide 26: 5G and telecommunication product testing with the highest testing capacity
Providing 5G and telecommunication product testing and 1 certification services with the highest testing capacity in the world Designated testing laboratories by 2 5G and telecommunication chip manufacturers Designated testing laboratories by 3 top smartphone and telecommunications companies worldwi
Slide 27: Major Clients
Major Clients 5 Ban $ — o—} RY BandRich Inc. LOnGCHEER D li k oo ow > '< Brightstar [ra Building an VERTU rufirsu I Microsoft ‘O,9) Meta nest mh Wa doro S NZ mawe! on, > Google Quaicomm @... BLU y COMPAL . SONY Ce ae amazon sss Q) cams OPPO Are F ZTE WOVATEL WIRELESS. eywell wistron *** = * (7 FOXCO
Slide 28: COVID-19 Epidemic Prevention Management
COVID-19 Epidemic Prevention Management ¢9 Strictly follow the CDC regulations announced by the Ministry of Health and Welfare to ensure the implementation of epidemic preventive policies. ¢9 Offer every employee to access full-day paid leave to get each dose of the COVID-19 vaccine. ¢? Hold cross-d
Slide 29: 3Q Financial Analysis Report
@) 3Q Financial Analysis Report
Slide 30: Revenue Breakdown
Revenue Breakdown Testing and Certification Customized R&D 91.5% and Sales of Passive Components 8.5% 30
Slide 31: Consolidated Income Statement (3Q)
Consolidated Income Statement (3Q) Unit: NTD thousands 2022/3Q 2021/3Q 2022/1-3Q 2021/1-3Q Amount ％ Amount ％ YoY Amount ％ Amount ％ YoY Total 1,315,540 100 1,163,554 100 13.06% 3,829,391 100 3,213,286 100 19.17% Revenue Gross 760,223 57.79 608,393 52.29 24.96% 2,147,700 56.08 1,606,660 50 33.67% Prof
Slide 32: Quarterly Revenue and Profit
Quarterly Revenue and Profit 14 70.00% 12 60.00% 10 50.00% 8 40.00% 6 30.00% 4 20.00% 2 10.00% 0 0.00% 2020/1Q 2020/2Q 2020/3Q 2020/4Q 2021/1Q 2021/2Q 2021/3Q 2021/4Q 2022/1Q 2022/2Q 2022/3Q Total Revenue (Billion) 7.37 9.14 9.27 9.38 10.09 10.4 11.64 11.08 12.35 12.79 13.16 Net Profit (Billion) 1.5
Slide 33: Revenue Breakdown by region/department
Revenue Breakdown Revenue breakdown by region/department 4.39% 2.44% 2.59% 8.20% 9.94% 8.65% 8.52% 5.10% 9.31% 10.93% 4.59% 4.68% 4.35% 3.21% 2.96% 23.50% 18.46% 22.66% 17.72% 26.76% 20.72% 63.20% 67.01% 62.41% 62.71% 68.20% 55.19% 2017 2018 2019 2020 2021 2022_1-3Q Taiwan China ICC Components US 33
Slide 34: Return on Investment Analysis
Return on Investment Analysis 3G 4G/LTE 5G 56.08% 48.59% 48.92% 50.03% 47.01% 47.03% 45.37% 45.95% 44.80% 44.13% 43.01% Gross profit margin exceeds 50% for the first time in 2021. 2022 1- 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 3Q Total Revenue 1,914,703 2,304,446 2,921,759 3,156,938 2,830
Slide 35: EPS and Dividends during the last 10 years
EPS and Dividends during the last 10 years The after-tax EPS was $11.0 NTD in 2021, and the board of directors has resolved to distribute a cash dividend of $9.0 NTD. 11.01 8.50 0.0 7.53 7.65 7.71 7.58 8.03 7.27 5.25 0.1 0.1 0.0 0.5 4.83 0.2 0.1 0.0 0.1 0.2 9.0 5.8 6.0 6.1 6.1 6.2 6.0 6.3 4.0 4.3 20
Slide 36: Business Opportunities from Developing Technology
(4) Business Opportunities from Developing Technology
Slide 37: Welcome to the next-generation network for the year 2023!
Welcome to the next-generation network for the year 2023! The release of the latest 5G NR/Wi-Fi 6E chipset enhances the development of next-generation connectivity, indicating that the global testing, inspection, and certification market size is expected to grow even further. The rise of remote lear
Slide 38: Thank You.
Thank You. Should you have any questions, please contact David Chou via email (davidchou@sporton.com.tw).
Sporton International — Q3 2022 Earnings Presentation on 6ix