41
Lida Holdings Corporate Presentation June 2016 Ticker: 4552
Lida Holdings
Corporate Presentation
June 2016
Ticker: 4552
Corporate Overview
Products & Industry
Operation & Business Model
Operating Results
Contents
l. Corporate Overview
可靠，源於專業
專業，始於創新 1
Date of Establishment May 11, 2012
Chairman Wu Chien-Neng (Representative of Yi Yuan Enterprises Ltd)
General Manager Chen Yi-Ping
Paid-in Capital NT$900 million
Business Scope Engage in the research, development, manufacturing and marketing of self-branded air compressors through trade names including "Luowei", "Lida" and "Chao Bao".
Consolidated Revenue NT$7.6 billion (FY2015)
Production Sites
1. Quanzhou City, Fujian Province - Lida (China) Machine Equipment Co., Ltd.
2. 九江, Jiangxi Province - Lida (Jiangxi) Machine Equipment Co., Ltd.
No. of Employees 1,375 (as of March 31, 2016)
Basic Information
2
100%
100%
Lida (Jiangxi) Machine
Equipment Co., Ltd.
Est. in February 2012
Lida Holdings (Cayman)
Wellsoon International Limited (BVI)
Lida (HK) Holdings
Lida (China) Machine Equipment Co., Ltd. Est. in March 2001
100%
100%
Holding Structure
3
China Operating Entities
Key Milestones
1993 Entered the Chinese air compressor industry
1998/10 Established PRC entity "Fujian Quanzhou Lida Machinery Co., Ltd."
1997/11 Registration of the "Luowei" trademark
1999/10 Registration of the "Lida" trademark
2001/03 Restructured as Sino-foreign joint venture company
2004/06 "Luowei" brand gained recognition as a "Fujian Province Famous Product"
2006/11 "Luowei" brand received the prestigious national "China Famous Trademark" recognition
2009/06 Established Hong-Kong holding company, Lida (HK) Holdings
2008/12 "Lida" brand gained recognition as a "Fujian Province Famous Product"
2010/12 Corporate identity changed to Lida (China) Machine Equipment Co., Ltd.
2012/02 Investment in subsidiary Lida (Jiangxi) Machine Equipment Co., Ltd.
2012/05 Established Lida Holdings, a Cayman Island-incorporated entity for the purpose of Taiwan public listing
2014/07 New Jiangxi plant in full operation
4
Title Entity / Name
Place of
Incorporation
/ Nationality
Shareholding
Education & Past Experiences # of Shares %
Chairman
Yi Yuan Enterprises
Limited : Representative:
Wu Chien-Neng
BVI
/
Taiwan
31,500 35.00%
- Oriental Academy of Industrial Technology , Taiwan
- CEO of Quanzhou Yida Electrical Appliance
- AVP, Home Appliances Division, Taiwan Tsannkuen Co.,
- Technical Department Manager, Sanyo Electric Taiwan
Director
Gain Fortune
Development Ltd
Representative: Huang
DaPing
BVI
/
China
16,940 18.82% - Various business in property development, media, etc.
Director
Leo Holdings Investments
Ltd. Representative: John
Yang
BVI
/
Hong Kong
13,455 14.95%
- BS, University of Toronto
- Partner, Excelsior Capital Asia; Investment Director, Prime
Partners Asset Management Group; Cazenove (Asia)
Director Kong Wai Fung Hong Kong － － - BS, Hong Kong Polytechnic University
- Certified in Transport and Logistics Professional
Independent
Director Ma Chia-Ying Taiwan － －
- Ph.D. in Accounting, Lehigh University
- Professor of Accounting, Soochow University
- Independent director of Richtek Technology and and TSC
Auto-ID Technology
Independent
Director Huang Ling Fang Taiwan － －
- LLM, National Chengchi University
- Independent director of New Palace International Co. and
Pharmally International Holding
Independent
Director Kelvin Shen Taiwan － －
- Masters of Management, Fu Jen Catholic University
- Deputy General Manager, Industrial Technology Investment
Corporation
Board of Directors
5
Key Management
Title Name Nationality Education & Past Experiences
General Manager Chen Yi Ping China - Fujian Normal University - Deputy General Manager, Lida (China)
Machine Equipment Co., Ltd
Deputy General Manager
Barry Lau China - Jimei University, Xiamen
CFO Daniel Kwan Hong Kong - Hong Kong Polytechnic University - Qualified CPA in HK - BDO Limited, Hong Kong
Manager, Sales Division
Kam Chuang China - Liming Vocational University, Quanzhou
Technical Director Wu Chong
Hong Taiwan
- Factory Head, Taiwan Ming Tyan Iron Works Co., Ltd
Internal Auditor Tony Chang Taiwan
- Master of Accounting, Soochow University - Taiwan CPA - In-charge Senior, Audit Service, Deloitte &
Touche Taiwan
6
可靠，源於專業
專業，始於創新 7
ll. Products & Industry
Piston Rolling Rotor Sliding Vane Scroll
Reciprocating
Screw
Rotary
Air Compressor
Positive Displacement Dynamic
Jet Turbine
Centrifugal Axial Flow
Air Compressor Classifications
8
Air Compressor Process Flow
Pressurized air, clean air
Petrochemical industry
Sandblasting
Pneumatic tools
Paint spray, electroplating, injection molding
Food & beverage processing
Air Compressor
Air Tank
Dehumidifier and filter
9
Industry Function Sample Applications
Industrial Manufacturing
Pneumatic Power
Numerous air-driven tools, such as: pneumatic pick, riveter, tamping machine, lift, and pneumatic drill
Automated equipment, such as dynamic movie theater seat, robot arm, laser, printing press, CNC machine center, machine tool and air valve
Spraying, e.g. painting and rust removal
Food & Pharmaceutical
PET bottle blowing
Soda carbonation, automated packaging lines
Textile & Apparel Air-powered sewing machines
Sandblasting of denims
Transport Automotive brakes, opening/close of bus doors, railway engineering equipment
Chemical & Petrochemical
Well fracturing, earth fracking for oil drilling
Synthesis & Polymerization
Synthesis and polymerization of chemical raw materials, such as synthetic nitrogen, methanol and urea
Transmission Long distance transmission of natural gas
Refrigeration & Gas Separation
Refrigeration & Gas Separation
Refrigerated air, Freon compressor
Transmission Transmission of refrigerated air and/or separated air
Mining & Metallurgy
Pneumatic Power Drilling equipment, such as rock drill, pneumatic drill & hammer
Blasting
Transmission Transmission of combustion gases, cement, and provision of air in mines
Applications of Air Compressor
10
Real World Use of Air Compressors
11
Textile Equipment
PET Blowing
Paint Spraying
Pneumatic Tools
Real World Use of Air Compressors
12
CNC Machine Center
Medical Equipment
Production Line Movement
Printing Press
Real World Use of Air Compressors
13
Laser Cutting
Dynamic Movie Theater
Robot Arms
Measuring Equipment Accessories
Source: China General Machinery Industry Association, Compressor Sub-association
Industry Composition of End Users
14
Machinery &
Manufacturing
40%
Pharmaceutical,
F&B, and
Others
25%
Chemical &
Petrochemical
20%
Mining &
Metallurgy,
15%
Source: China General Machinery Industry Association, Compressor Sub-association; Qianinfo Consulting
Unit: RMB 100 million
0
100
200
300
400
500
2009 2010 2011 2012 2013 2014 2015E 2016E 2017E 2018E 2019E
149
193
228252
280312
340369
398427
456
In tandem with China's economic growth and increased adoption of industrial automation, the market size of the Chinese air compressor industry is expected to reach RMB 45.6 billion by 2019. Various macroeconomic policies launched in recent years, such as "Supply Side Reform" and "New Type Urbanization Plan", will become growth drivers of the air compressor industry.
Size of Chinese Air Compressor Industry
15
Category Revenue % (2015)
Attributes & Application
Piston-type 50% Ease of use, high mobility, affordability. Wide range of users, from individuals to small- and
medium- enterprises.
Screw-type 37%
Medium- to large-sized manufacturers, including but not limited to: industrial production, automobile, textile, packaging and petrochemicals.
Higher operating efficiency, especially under continuous operation.
Energy efficiency and ease of operation.
Scroll-type 10%
High quality compressed air. Particularly suitable in safety-conscious applications,
such as medical, pharmaceutical, food and beverage, as well as precision industries
Growing industry attention on scroll-type designs. Offers high operating efficiency and dependability, low noise levels, with reduced size and weight.
Product Overview
16
Unit: NT$ 000's
Growth Rates, by Product
-
500,000
1,000,000
1,500,000
2,000,000
2,500,000
3,000,000
3,500,000
4,000,000
Type 2012 2013 2014 2015 CAGR
Piston Compressor 2,825,968 3,262,922 3,655,178 3,844,830 10.81%
Screw Compressor 1,571,557 2,012,290 2,423,332 2,855,091 22.02%
Scroll Compressor - 213,914 542,384 779,684 90.91%
Others 94,990 118,662 127,525 136,044 12.72%
TOTAL 4,492,515 5,607,788 6,748,419 7,615,649 19.24%
17
Gross Margins, by Product
2012 2013 2014 2015 2016Q1
Piston Compressor 20.56% 22.08% 23.02% 23.57% 23.83%
Screw Compressor 24.37% 26.01% 24.49% 25.81% 25.34%
Scroll Compressor 19.01% 22.60% 25.64% 27.05%
Others 34.34% 38.11% 36.93% 39.13% 42.92%
Total 22.19% 23.71% 23.77% 24.90% 25.15%
0.00%
10.00%
20.00%
30.00%
40.00%
50.00%
18
Lida's End Users, by Industry (2015)
Machinery & Manufacturing
30.6%
Other 16.3%
Food Processing 12.5%
Bio-Pharmaceuticals 8.8%
Electronics 8.6%
Textile & Apparel
6.7% Printing & Packaging
4.8%
Construction 5.2%
Auto Manufacturing & Servicing
6.5%
資料來源：力達公司整理
19 Source: Lida Holdings
Our End Users
20
可靠，源於專業
專業，始於創新 21
lll. Operation & Business Model
Through professional competency in R&D, production and marketing, our self-branded general-purpose air compressors are sold through a comprehensive network of distributors.
Air compressors are widely applied in different sectors such as manufacturing, construction and decoration, textile and garment, food processing, pharmaceuticals, medicals, transportation, petrochemicals and mining and metallurgy.
Currently there is no fully substitutable product for air compressors, therefore our products are subject to lesser impact coming from single-industry cycles.
Production Sites Location Area Positioning
Lida (China) Quanzhou city, Fujian 37,101 m2 R&D, production and sales for overseas markets and coastal provinces)
Lida (Jiangxi) Jiujiang city, Jiangxi 58,529 m2 Production and sales (inland provinces)
Business Model
Operating Model
22
• China: a network of 70 key distributors
• Overseas: importers & trading houses
• China: 25 provinces and centrally-governed cities,
including Beijing, Sichuan, Hubei and Jiangsu
• Overseas: Southeast Asia, Turkey, South Africa
0.00%
50.00%
100.00%
2012年 2013年 2014年 2015年
10.54% 8.30% 9.90% 8.98%
89.46% 91.70% 90.10% 91.02% China
Overseas
Sales Networks
Sales Channels
Major markets
23
Name Introduction Major Products
Atlas Copco (Wuxi) Compressor
Found in 1873, headquarter located in Sweden. Atlas Copco (Wuxi) was set up in 1994.
Piston, oil-free, screw compressors, oil-lubricated air compressors, oil-free centrifugal compressors, control and monitoring systems and portable screw compressors
Shanghai Ingersoll Rand Compressor Joint venture between Ingersoll Rand
Compressor (USA) and Shanghai Compressors. Ingersoll Rand is one of the top 500 enterprises globally.
Screw compressors, portable compressors, centrifugal compressors
Major foreign players
Competitive Landscape
24
Market positioning of major foreign players：
1. Primarily focus on the large-size compressors; product life cycle from 30 to 40 years.
2. Product ASP normally double of local players.
3. Mainly serve large manufacturing clients.
Name Introduction Major Products
Zhejiang Kaishan Compressor Found in 2012. Kaishan is the largest
screw compressor manufacturer in China. It is a publicly traded company in China.
Screw air compressor, refrigeration compressor, screw expander generator, and process gas compressor.
Shanghai Hanbell Precise Machinery
Taiwanese-invested enterprises set up in 1996. It is a publicly traded company in China.
Refrigerating compressor, screw refrigerant compressor, vacuum pump
ZheJiang Hongwuhuan Machinery
Founded in 1997. Products mainly used in construction, tunneling, power and mining machinery.
Piston compressor, screw air compressor, pneumatic rock drill, pneumatic and hydraulic down hole drill, breakers, drilling wagon.
Wuxi Compressor
Found in 1955, invested by Kobe Steel Group in 2011.
Industrial energy compressor, labyrinth compressor for petrochemical industry, piston compressor, screw compressor, centrifugal compressor.
Major local players
Competitive Landscape
25
Competitive Landscape
Items Lida
(4552 TW) Kaishan
(300257 CH) Hanbell
(002158 CH)
Revenue, by region
(2015)
China 91% Overseas 9%
China 95% Overseas 5%
China 93% Overseas 7%
Sales model Distributors 100% Mainly distributors with some direct sales
Mainly direct sales with some sales through distributors
Target customers
Machine manufacturing, food processing pharmaceutical, auto industry, textile and garment, automation industry
Metallurgical industry, chemical industry, large scale construction industry
Refrigerant compressors, primarily supplied to air-conditioner manufacturers
Revenue, by product
(2015)
Piston 50% Screw 37% Scroll 10% Others 2%
Piston 7% Screw 69% Others 24%
Screw refrigerant 65% Air compressors 21% Others 14%
26
1. According to statistics from China General Machinery Industry Association, the global market size
of the air compressor industry was approximately US$35 billion in 2014.
2. According to statistics from Compressor Magazine, China’s air compressor industry market size
reached RMB31.2 billion (including piston, screw and other type of air compressors). The industry
expected to continue growing steadily, and expected to achieve RMB34 billion of sales in 2015.
3. Based on industry data, Lida’s market share in China reached 4.4% in 2014. Overall, foreign
players account for approximately 50% of market share in China.
Basis of calculation: Lida 2014 revenue Information source: Qianinfo Consulting, Lida
Lida is a leading player in the
general-purpose air compressor
segment!
Market Share
Lida
4.40%
KaiShan
6.33%
WuXi
3.83%
HanBell
3.06%
HongWuHuan
2.52%
Others
29.86%
Foreign
50%
27
Mature and stable distribution network 1. Cooperated on
average over 10 years with our top 10 distributors
2. Network of 70 distributors in 25 provinces
Competitive Advantages
Reliability & Quality 1. Our products are
use in the "Bird Nest Stadium" during the 2008 Beijing Olympics
2. China Famous Trademark
Production Experience 1. Focus on
general-purpose air compressors
2. Over 20 years of continuous production
R&D Strength 1. Independently
developed scroll air compressor
2. F-Variable Frequency compressor has industry leading efficiency
Focus
R&D
Brand
Channels
28
Ability to set air pressure at any desired level and output at constant pressure, providing greater energy savings
Typical Cost Structure of Air Compressor Over Lifetime of Use
Lida Advantage
1. 23%-40% more energy efficient compared to traditional air compressors.
2. 13%-20% more energy efficient compared to F-Variable Frequency compressors offered by competitors.
Source: Lida, peer websites
F-Variable Frequency Compressor
New Product – Screw Compressor
29
Energy Cost, 77%
Maintenance Cost, 9%
Purhcase Cost, 14%
Reduced size, longer operating life and higher dependability
• High volumetric efficiency.
• Low torque variation and less vibration.
• Ease and lower cost of maintenance.
Radial flexible compensating mechanism offers 10% efficiency gain
• Lower and more stable operating temperature improves compression efficiency by 1~5%
• Improved electrical system performance by 2~5% when operating at 80-90% loading
Scroll Compressor
Dual cooling systems
• Automated system adjustment according to operating conditions.
• Intelligent suite of protection system, including temperature, phase, over-voltage etc.
30
New Product – Scroll Compressor
Growth Drivers
• F-Variable Frequency screw compressor was launched in 2015H2 and recorded NT$50 million of
sales during the second half. Sales increased to NT$60 million in 2016Q1 alone, and we expect
full-year revenue of this new product to reach NT$350 million this year. The F-Variable Frequency
screw compressor will be one of Lida's key products.
• Scroll compressors: 3 products currently on sale since initial launch in 2013. Lida will introduce an
additional 1~2 models this year.
• Domestic sales: Assist our tier-1 distributors to expand their tier-2 distribution network and end
user space.
• Enhance sales effort at regions/provinces where we traditionally have lesser presence.
• Overseas sales: Proactive expansion in Southeast Asian markets. In 2015, we generated NT$360
million of revenue from Southeast Asia, of which NT$93 million was from Indonesia (+39% YoY).
• Initiation of several high-profile national level development policies by the Chinese government,
including 13th Five-Year Plan, China Manufacturing 2025, One Belt One Road, Supply Side Reform,
and New-type Urbanization, all serve to promote industrial automation, reduce emission, and
enhance energy efficiency. As industries upgrade, we expect a new wave of demand for air
compressors.
New Products
New Markets
Policy Opportunity
31
可靠，源於專業
專業，始於創新 32
lV. Operating Results
Unit: NTD’000
4,492,515
5,607,788
6,748,419
7,615,649
453,239 587,118 758,945 934,530
0
1,000,000
2,000,000
3,000,000
4,000,000
5,000,000
6,000,000
7,000,000
8,000,000
2012 2013 2014 2015
Revenue Net Profit
Revenue and Profit
33
22.19% 23.71% 23.77%
24.90%
15.37% 17.38% 17.10%
18.29%
10.09% 10.47% 11.25%
12.27%
0.00%
5.00%
10.00%
15.00%
20.00%
25.00%
30.00%
2012 2013 2014 2015
Gross profits margin Operating margin Net profits margin
Profitability Indicators
34
Unit: NTD’000
Balance Sheet
Item 2012 2013 2014 2015 2016Q1
Current assets 1,575,699 1,858,472 2,875,603 3,819,422 4,148,220
Property, plant and equipment
232,142 487,541 510,467 483,323 473,113
Other assets 40,701 62,871 44,590 42,461 42,405
Total assets 1,848,542 2,408,884 3,430,660 4,345,206 4,663,738
Current liabilities 1,297,569 1,418,606 965,829 1,115,752 1,194,941
Non-current liabilities 114,385 － － － -
Net liabilities 1,411,954 1,418,606 965,829 1,115,752 1,194,941
Share capital 465,541 465,541 900,000 900,000 900,000
Capital reserves 0 352,753 536,966 536,966 536,966
Retained earnings -52,675 164,335 923,280 1,740,810 1,999,008
Other reserves 23,722 7,649 104,585 51,678 32,823
Total equity 436,588 990,278 2,464,831 3,229,454 3,468,797
35
Unit: NTD’000
Income Statement
Item 2012 2013 2014 2015 2016Q1
Revenue 4,492,515 100% 5,607,788 100% 6,748,419 100% 7,615,649 100% 1,883,873 100%
Gross profit 996,710 22% 1,329,677 24% 1,604,375 24% 1,896,336 25% 473,754 25%
Operating profit
690,602 15% 974,685 17% 1,154,017 17% 1,392,685 18% 348,521 19%
Profit before income tax
671,795 15% 898,959 16% 1,144,557 17% 1,403,075 18% 368,180 20%
Income tax 218,556 5% 311,841 6% 385,612 6% 468,545 6% 109,982 6%
Net profit 453,239 10% 587,118 10% 758,945 11% 934,530 12% 258,198 14%
EPS (Note)
5.92 7.67 9.15 10.38 2.87
36
Note：EPS calculation based on retrospective weighed average no. of shares. The retrospective weighed average no. of shares for the years 2012 to
2016Q1 were 76,545,000, 76,545,000, 82,908,000, 90,000,000 and 90,000,000 shares, respectively.
Unit: NTD’000
2016Q1 Financials
Item 2016Q1 2015Q1
Revenue 1,883,873 100% 1,679,813 100%
Gross profit 473,754 25% 415,867 25%
Operating profit
348,521 19% 303,465 18%
Profit before
income tax 368,180 20% 306,941 18%
Income tax 109,982 6% 99,353 6%
Net profit 258,198 14% 207,588 12%
EPS 2.87 2.31
Item 2016Q1 2015Q1
Current assets 4,148,220 3,151,556
Property, plant and equipment
473,113 497,920
Other assets 42,405 43,873
Total assets 4,663,738 3,693,349
Current liabilities 1,194,941 1,161,390
Net liabilities 1,194,941 1,161,390
Share capital 900,000 900,000
Capital reserves 536,966 536,966
Retained earnings 1,999,008 1,013,868
Other reserves 32,823 81,125
Total equity 3,468,797 2,531,959
37
Type 2016Q1 2015Q1
Piston 877,491 47% 889,654 53%
Screw 744,229 40% 631,295 37%
Scroll 229,401 12% 127,599 8%
Others 32,752 1% 31,265 2%
Ratio Analysis
Items
Company
names 2012 2013 2014 2015
Trade receivable turnover days
Lida 37 37 37 36
F-AirTac 94 94 109 120
Hiwin 127 142 129 140
Basso 63 65 65 76
Inventory turnover days
Lida 26 22 19 16
F-AirTac 139 147 164 163
Hiwin 167 189 166 194
Basso 123 120 113 106
Net profit margin (%)
Lida 10.09 10.47 11.25 12.27
F-AirTac 19.04 23.50 21.32 15.63
Hiwin 15.62 15.37 15.03 9.37
Basso 2.29 19.41 30.79 28.48
Return on equity
Lida 118.90 82.29 43.93 32.82
F-AirTac 19.97 23.50 18.70 13.44 Hiwin 19.85 17.31 17.81 9.90 Basso 2.30 20.95 32.87 29.58
EPS (NTD)
Lida 5.92 7.67 9.15 10.38
F-AirTac 6.67 10.55 10.39 7.64
Hiwin 7.91 7.73 9.20 6.10
Basso 0.38 3.43 6.31 6.75 38
Thank You
39
