Investor Conference

1. Company Introduction

2. Financial Highlights

3. Market Opportunity and Competitive Advantage

4. Future Prospects

Agenda

2

Company Introduction

3

Data as of June 2, 2016

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%

4

RECHI PRECISION CO., LTD

25%67.86%

77.78%

50%

100%

100%

100%

100%

100% 45%

RechiHoldings Co., Ltd.

100%

50%

Qingdao Rechi

Electric Machinery

Sales Company

Dyna RechiHoldings Co., Ltd.100%100%

Dongguan Rechi

Compressor Co., Ltd.

Rechi Investments

Co., Ltd.

100%

100%

GR Holdings

(Hong Kong) Limited

100%

Rechi Investments Holdings

Co., Ltd.

Dyna Rechi Co., Ltd.

Dyna Rechi Jiujiang Co.,

Ltd.

Rechi Precision(Jiujiang)

Electric Machinery

Limited

Rechi Refrigeration

Dongguan Co. Ltd.

Rechi Precision

(Huizhou)Mechanism

Company

TCL Rechi (Huizhou)

Refrigeration Equipment

Company Limited

Rechi

Precision(Qingdao)Elect

ric Machinery Limited

RechiInternational

Holdings Co., Ltd.

Organization structure

5

Cover area: 151,016m2

Qingdao factory: compressor

Humen factory: compressor and motor

占地面積: 160,000m2

Cover area : 29,652m2

Kwanyin factory: HQ and R&D center

QR

TR

KR

India Office

America Office

Cover area : 34,194m2

Huizhou factory: compressor

Cover area: 20,000m2

Pingtung factory: BLDC motor

HR DNR

DC compressor and BLDC motor

JR/DRJCover area: 298,149m2

Location of facilities

6

RECHI milestone

2006

2013

2014

2015

1989

Target：Accumulative

Sales Quantity reached

200 million sets.

2020

Accumulative Sales Quantity

reached 100 million sets.

2014

Annual Sales Quantity exceed

10million sets.

2011 2020

2011

2016

2016

Developed 39F with R134a and R410a Application

R Project with ITRI

Developed 44F DC Compressor with R410A Application

Developed 44F / 50F with R32 Application

Developed 39Fwith R290 Application

Developed 20F/28F DC Compressor with R134a Application

7

Accumulative Quantity of July 31, 2016

Sales：129,538,887 sets

Production ：130,675,435 sets

Financial Highlights

8

SE Asia

Europe

15%

5%

3%

13%

28%

24%

8%

Taiwan

Japan

China

N American

2%India

2%Middle East

RECHI Sales : Geographic distribution

S American

data statistics : 2015

9

The sales quantity of Heat-Pump Dryer compressor

0

50

100

150

200

250

300

'10 '11 '12 '13 '14 '15 '16(F) '17(F) '18(F) '19(F)

46

75

106

131

196

233

★ Market Share: more than 80% in Europe

(Unit: 10k)

10

Revenue growth

Margins

(Unit: NT$mn)

11

ROE and ROA

Operating CF & CAPEX(Unit: NT$mn)

12

* Based on share price on following year closing before ex-dividend day

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

Dividend policy

13

Income statement

14

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

Total assets 21,088,180 100 22,338,752 100 -1,250,572 -6

Total current liabilities 10,069,208 48 10,944,819 49 -875,611 -8

Long-term liabilities 251,028 1 925,800 4 -674,772 -73

Total liabilities 12,054,624 57 12,852,982 58 -798,358 -6

Total stockholders' equity 9,033,556 43 9,485,770 42 -452,214 -5

15

Cash flow statement

Unit in Thousand NT$ 2016H1 2015H1

Cash, beginning of year 4,242,008 4,598,024

Net cash provided by operating activities640,519 526,567

Cash flow from investment activities-362,347 -1,271,210

(Decrease) increase in short-term loans, net-644,096 425,486

(Decrease) increase in long-term loans, net-72,853 0

others -704,765 -56,268

Cash, end of year 3,098,466 4,222,599

16

Market Opportunity and Competitive Advantage

17

Global A/C market trend

Reference : IOL, HENGTA, GI

RY : August-July

(Unit: 10k)

18

China top 10 A/C makers

(Unit: 10k)

Maker2016年

(H1)

Growth

(H1)2015 Growth 2014 Growth 2013 Growth 2012

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% 546 13.6% 480

AUX 420 45.9% 479 8.5% 441 5.8% 417 -2.0% 425

TCL 394 25.2% 465 -4.6% 487 11.3% 438 23.8% 354

HISENSE 188 -8.6% 309 -16.2% 369 11.9% 330 16.9% 282

LG 146 -28.7% 258 -4.1% 270 -12.6% 309 -7.5% 333

PANASONIC 133 -24.6% 253 -11.2% 285 1.4% 281 -25.8% 379

CHANGHONG 172 14.3% 220 3.7% 212 8.8% 195 15.6% 168

OTHERS 624 -6.8% 1091 -16.2% 1302 7.2% 1214 11.0% 1094

TOTAL 5796 -14.5% 10655 -8.2% 11606 4.5% 11112 6.7% 10412

Reference : IOL

19

Maker2016年

(H1)

Growth

(H1)2015 Growth 2014 Growth 2013 Growth 2012

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% 1238 -8.4% 1351 9.3% 1236 13.0% 1094

PANASONIC 492 -8.6% 887 -19.4% 1101 6.5% 1034 -5.1% 1089

LG 373 4.7% 554 -11.8% 628 9.4% 574 -17.6% 697

MITSUBISHI 335 1.5% 545 -11.8% 618 13.4% 545 2.8% 530

SAMSUNG 217 6.9% 320 -31.3% 466 -4.1% 486 -1.0% 491

QINGAN 175 10.4% 320 -23.2% 416 8.0% 385 -35.8% 600

SANYO 157 14.1% 239 -16.9% 287 -23.1% 374 2.0% 366

OTHERS 232 -4.7% 452 -18.3% 553 14.7% 482 36.2% 354

TOTAL 7802 -2.9% 13362 -12.4% 15252 17.4% 12989 10.7% 11736

China top 10 rotary compressor makers

(Unit: 10k)

Reference : IOL

20

Competitive advantage-marketing

service 28 countries，148 Clients

★ Owns complete global marketing channels

21

Kuanyin factory

pump 3 million

Humen factory

motor 5 million

Qingdao factory

compressor 9 million

pump 6 million

motor 6 million

Huizhou factory

( TCL Rechi)

compressor 6 million

pump 6 million

motor 3.6 million

Jiujiang factory( DynaRechi)

compressorPreliminary capacity 2 million

Final capacity 6 million

BLDC motorPreliminary capacity 1.5 million

Final capacity 21 million

Pingtung factory

BLDC

motor

Preliminary capacity 1.5 million

Final capacity 3 million

Qingdao

Huizhou

Humen

Jiujiang

Pingtung

Taoyuan

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.

22

Competitive advantage - products

★ A/C and Dehumidifier Energy Star in USA

★ A /C Five Star Standards in INDIA

★Pump dryer in EUROPE

A+++ -20%

★TAIWAN CSPF and CHINA class 1

Inverter high

frequence

62%

50/60 Hz

15~120 r.p.s.

A/C 3.5kW application

Roof-Top A/C

Heat Pump Water HeaterUnitary A/C

Portable A/C

Split A/C , VRFHeat Pump dryer

Dish Washer

Tumbling-box

Washing Machine

Dehumidifier

High energy-efficiency Less noise

Application Smaller size

Weight

※Acoustic analysis and design

※Flow induced noise analysis and design

※Optimal Muffler design

※Structure modal analysis and design

Energy Efficiency Standards

23

Competitive advantage – R&D capability

YearR&D

Engineer%

2015 305 5.7%

2014 275 5.3%

2013 242 4.3%

2012 157 3.2%

2011 113 2.3%

2010 95 2.2%

2009 81 2.0%

2008 78 3.3%

292,680

420,020

467,373

1.09%

1.40%

0.93% 0.93%

1.31%

1.78%

2.32%

2.99%

0.00%

0.50%

1.00%

1.50%

2.00%

2.50%

3.00%

3.50%

0

50,000

100,000

150,000

200,000

250,000

300,000

350,000

400,000

450,000

500,000

'08 '09 '10 '11 '12 '13 '14 '15

R&D Expense R&D vs. Revenue(Unit: NT$k)

★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-university cooperative：ITRI、NCSIST、NIRDC、NCTU、NCU、NCKU、NIIC、 NPUST and so on.

24

Future Prospects

25

Development strategy

Value InnovationStrategy

New Energy Saving market

opportunity

New Energy

Saving products

Technology

Innovation

Market

Demand

Pursue Create

26

-

500

1,000

1,500

2,000

2,500

'12 '13 '14 '15 '16(F) '17(F) '18(F) '19(F) '20(F)

BLDC MotorCompressor

(Unit: 10k) (Unit: 10k)

Mid-term and long-term plan - sales

27

Target：Accumulative

Sales Quantity reached

200 million sets.

Other business2020 target revenue 7.5%

Heat Pump

Water Heater

business

Compressor

motor

business

Precision

machining

business

Module

business

★Builds leader brand

in Taiwan market

★Horizontal alliances

★Develops oversea

market

★Develops new markets

for compressor motor

★Builds module

products channels

-Compressor products

-BLDC motor products

★Develops

Automobile parts

precision machining

★Develops innovation

precision machining

products

Mid-term and long-term plan - sales

28

BLDC MotorCompressor

(Unit: 10k) (Unit: 10k)

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

29

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

Mid-Term and Long-Term plan -

product development

30

Organization improvement

process and system

improvement

Intelligence factory

Raise company's competitiveness

Upgrades RECHI management systems

31

Create unlimited possibilities for the Energy Saving Industry.

Become the top provider of proactive Energy Saving Product.

Thank you