2024 Annual report

Stock Code：2421

SUNON.

Sunonwealth Electric Machine Industry Co., Ltd.

2d24 Annuai Report

Company Website :

https://http://www.sunon.com

Taiwan Stock Exchange Market Observation Post System : https://http://mops.twse.com.tw

Printed on March 30, 2025

1. Spokesperson: Name:William Li Title: Vice President Tel: (07)8135888

   Email: weijenli@sunon.com

   Deputy Spokesperson Name: Tina Huang

   Title: Investor Relations Manager Tel: (07)8135888

   Email: tina_huang1015@sunon.com

2. Contact Information of the Head Office, Branch Offices and Factories

   Head Office: No. 30, Ln. 296, Xinya Rd., Qianzhen Dist., Kaohsiung City , Taiwan Tel: (07)8135888

   Taipei Office: 4F., No. 356, Sec. 1, Neihu Rd., Neihu Dist., Taipei City, Taiwan Tel: (02)27992383

   Kunshan Plant: NO.168 Nanbang Road Kunshan , Jiangsu ,China Tel: +86-512-57700108

   Beihai Plant:B2, B6, Beihai Comprehensive Bonded Zone, Beihai Avenue West, Beihai City, Guangxi Province, China

   Tel: +86-779-6666888

   Philippines Plant: Lot 5, Block 8, Hermosa Ecozone Industrial Park, Brgy. Palihan, Hermosa, Bataan, Philippines.

   Tel: +63-472409120

3. Stock Transfer Agency

   Name: Grand Fortune Securities Co., Ltd. Stock Transfer Agent Address: 6F, No. 6, Section 1, Chung Hsiao West Road, Taipei City Tel: (02) 2371-1658

   Website: https://www.gfortune.com.tw

4. Contact Information of the Certified Public Accountants for the Latest Financial Report Name: Accountant Kuo-Ming Li CPA and Ling-Wen Huang CPA

   Firm: Crowe (TW) CPAs

   Address: 27F, No. 6, Siwei 3rd Rd., Lingya Dist., Kaohsiung City, Taiwan Tel: (07)3312133

   Website: https://www.crowe.tw

5. Overseas securities listing exchange and information:None

6. Company website https://http://www.sunon.com

   Table of Contents
   1. Letter to Shareholders 1
   2. Corporate Governance Report 5

      1. Profile of Directors, Supervisors, President, Vice Presidents, Assistant Vice Presidents, and Department Directors 5

      2. Remunerations to Directors, Supervisors, President, and Vice Presidents in recent years 18

      3. Implementation of corporate governance 26

      4. Information on CPA fees 80

      5. Information on Replacement of CPAs 80

      6. The Chairman, President and Financial or Accounting Managerial Officer of the Company

         who had worked for the Independent CPA or the affiliate in the past year 80

      7. Share transfer by Directors, Supervisors, Managerial Officers, and shareholders holding

         more than 10% interests and changes to share pledging by them 81

      8. Information on the relationship between any of the top ten shareholders (related party,

         spouse, or kinship within the second degree) 83

      9. The shareholding of the Company, Director, Supervisor, Managerial Officers and an enterprise that is directly or indirectly controlled by the Company in the invested company

         and the calculation of the consolidated shareholding percentage 85

   3. Funding Status 87

      1. Source of Capital Shares 87

      2. List of major shareholders 90

      3. Dividend policy and implementation status 90

      4. The effects of the stock dividends proposed by the shareholders' meeting on the Company's business performances and earnings per share 90

      5. Remuneration of employees, directors and supervisors 91

      6. Buyback of treasury stock 92

      7. Corporate bond issuance status 92

      8. Issuance of preferred stocks 92

      9. Issuance of global depositary receipts (GDR) 92

      10. Exercise of employee stock option plan (ESOP) 92

      11. Restricted stock awards 92

      12. Mergers, acquisitions or issuance of new shares for acquisition of shares of other

          companies 92

      13. Implementation of capital allocation plan 92

   4. Business Overview 93

      1. Business activities 93

      2. Market, production and sales 100

      3. Employee information 108

      4. Environmental protection expenditure information 108

      5. Employees-employer relations 109

      6. Information Security Management 110

      7. Important contracts 116

   5. Review, Analysis, and Risks of Financial Conditions and Performance 117

      1. Financial conditions 117

      2. Financial performance 118

      3. Cash flow 119

      4. The effects that significant capital expenditures have on financial operations in the recent

         year 120

      5. Investment policy in the past year, profit/loss analysis, improvement plan, and investment

         plan for the coming year 120

      6. Risk management and evaluation 122

      7. Other important matters 126

   6. Special Disclosures 127

      1. Profiles of affiliates and subsidiaries 127

      2. Progress of private placement of securities 133

      3. Other supplemental information 133

         Corporate events with material impact on shareholders' equity or stock prices set forth in Article 36, Paragraph 3, Subparagraph 2 of Securities and Exchange Act 134
         1. Letter to Shareholders

Dear Shareholders,

2024 was a year of challenges and opportunities. In an economic environment of high interest rates, slowing economic recovery, and intensified disputes between China and the United States, Sunonwealth maintained its corporate resilience, responded to the rapidly changing industrial environment with caution and flexibility, upheld its core values, and continued to pursue sustainable development and steady growth.

Over the past year, the global market still suffered from weak demand suppressed by high interest rates and inventory adjustments by end customers, which continued to impact the revenue from industrial applications, laptops, home appliances, and distribution channels. However, the rapid development of AI applications has significantly increased the demand for AI servers. On the other hand, the demand in automotive applications has continued to grow steadily due to the widespread adoption and extension of related applications. Therefore, despite the difficult environment, Sunonwealth continued to thrive and achieved outstanding results with the joint efforts of all employees.

Looking forward, geopolitical tensions, trade tariffs, and inflation continue to make the global economic outlook highly uncertain. However, key industries that have attracted high attention such as generative artificial intelligence, robotics, electric vehicles, and new energy, are expected to continue flourishing in the following years. We will continue to invest in the development and innovation in related industries, accelerate, improve, and diversify our global manufacturing footprints, and uphold the concept of sustainable development to enhance the company's long-term corporate value.

The Company's business plan achievement status in 2024 is as follows: Comparison of the 2024Business Plan and actual achievements

Note: The 2024 Business Plan figure was not audited by the CPA.

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