Ticker: 4977 2016-12-6

眾達科技

PCL Technologies Inc.

This material has been prepared by PCL Technologies, Inc. (“PCL”).

Statements made in this material include forward-looking statements,

which include, without limitation, statements about the issues, plans and

expectations of PCL. Forward-looking statements reflect, among other

things, management plans and objectives for future operations, current

views with respect to future events and future economic performances

and projections of various financial items. These forward-looking

statements involve known and unknown risks, uncertainties, and other

factors which may cause actual results to differ materially from those

implied by such forward-looking statements.

PCL Technologies, Inc. (眾達科技股份有限公司)

Founded date: 2007.10.16

IPO date: 2013.11.20

Capital: NTD 557 Million

Production base: PCL Technologies (Suzhou), Inc.

Employees: 760 (2016.11.30)

Major Products:

- Optical Transceiver

- Optical Transmitter/Receiver

Sub-assembly

Company Overview

Page 1

100M USD

Optical Transceiver Market

Page 2

Source: Infonetics 2016

Page 3

Source: Lightcounting, 2016

Ethernet Optical

Transceiver Market

100M USD

High-Speed Optical

Transceiver Market

Page 4 Source: Infonetics 2016

Page 5

Source: Ovum, 2016

Data-Center Optical

Transceiver Market

Epitaxial Growth

Chip Process

Packaging Application

Cladding layer

Waveguide

Active region

Lithography

Dry/Wet etch

Deposition

Metalization

Wafer probing test

Lapping & Polishing

Scribing & Breaking

Bar & Chip test

TO-CAN

COB

OSA

Laser welding

Epoxy attach

Transceiver

AOC

Elaser (3450.TT)

Luxnet (4979.TT)

Truelight (3234.TT)

LandMark (3081.TT)

PCL (4977.TT) Page 6

Optical Transceiver

Supplier Chain

Summary: Revenue: 2016 Q1-Q3 YoY 9% 2016 Jan-Oct YoY 10% Profit: 2016 Q1-Q3 YoY 18% GM: 2016 Q1-Q3 28.4%; 2015 Q1-Q3 24.3%)

Finance Performance

營業收入 (百萬元新台幣) 稅後淨利 (百萬元新台幣)

Gross Margin ROE

Quarter Revenue (Mil NTD) Net Profit (Mil NTD)

Page 7

Produce TOSA & ROSA

Produce PCB & SMT

Solder TOSA and OSA

on PCBA

Assemble OSA 及 PCBA

into mechanical housings

Complete optical

transceiver assembly

Proprietary Process

TO-CAN COB (Chip on Board)

Die bond laser diode

/photo-diode and wire

bond to PCBA

Align and attach

optical lens to laser

diode and photodiode

Complete optical

transceiver

assembly

TO-CAN process is used in single-mode

products by using DFB/FP lasers and APD

detectors.

The process requires TO and flex-PCB.

Use standard laser welding process.

COB process is used in multi-mode products

by using VCSEL lasers and PIN detectors.

The process no need TO and flex-PCB.

PCL develops the process and equipment.

Page 8

Manufacture Triplex &

SMT

Solder Triplex on PCBA

Assemble Triplex & PCBA

into mechanical housings

Complete optical

transceiver assembly

10G EPON OLT Process

Process Application

Use10G EML / 1G DFB lasers and APD detectors.

The process requires TO material and flex PCB.

PCL develops the Triplex design including EML and APD packaging.

Page 9

DS (bit/s) US (bit/s) Asymmetric

(DS/US） Symmetric

(DS/US) Transmitter（TX） Receiver（RX）

EPON 1.25G 1.25G DML FP/DFB laser PIN

GPON 2.5G 1.25G DML FP/DFB laser PIN/APD

10G EPON 10G/1G 10G/10G 10G EML laser /1G DML laser 10G/1G APD

XG-PON1 (10G GPON)

10G/2.5G 10G/10G 10G EML laser

2.5G APD

Note： From PON to 10G PON the requirement of transmitter has to upgrade from DML laser to EML laser. Especially for EML laser, the package needs to change from Box type to TO type, the process is much more complicated. PCL has the capabilities of both EML and APD packaging, assembly and testing.

PON/10G PON Standard

Page 10

SWOT Analysis

Process advt.: intelligent operation, offer one-stop-

shop service from chip package to OC assembly

and test; sustain complex production with high

yield, high efficiency and high quality.

Proprietary integration technology of III-V optical

devices, micro optics alignment, and COB process.

Tighten partnership with 1st-tier customers: co-

development and co-CAPEX on new products; the

extension of customer RD team.

High customer concentration risk.

Flat revenue growth.

Factory operation: not yet fully utilization; not meet economic scale.

Competitions from other low-cost optical transceiver suppliers.

Competitions from other contracted manufacturers.

Co-developing high speed OCs with network

/telecom and web-scale customers.

Technology barriers of 100G and above OCs:

requires advanced micro-level optics packaging.

Datacom: infrastructure upgrade of enterprise

network.

Datacenter: CAGR 25% (2014 - 2019).

Telecom: MAN coverage.

Wireless: 5G & IOT.

Strength Weakness

Opportunity Threat

Page 11

8G/10G SFP+ SR

1.25G/2.5G

4G LTE SFP

1.25G/2.5G

SFP GbE/OC48

10G

XFP IR2/ZR

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

16G SFP+ LR

10G GPON

25G/32G SFP+ SR

40G QSFP+ SR4

100G QSFP28

PSM4

100G QSFP28

CWDM4

8G/10G SFP+ LR

16G SFP+ SR

10G SFP+ ER

6.1G/10G

4G LTE / LTE-A SFP+

DATACOM & DATACENTER

TELECOM

Wireless

Product Roadmap

25G SFP+ LR

5G

e-LTE

Page 12

Industry Comparison

Industry Comparison PCL Finisar (FNSR) Fabrinet (FN)

Hist. EPS Growth (3-5 yrs)1 15.54% 14.22% 15.00%

Sales Growth1 6.55% 8.69% 33.87%

Net Margin Growth1 19.41% 4.32% 6.34%

Return on Equity1 21.90% 7.61% 13.07%

Debt/Capital1 22.85% 16.27% 6.16%

Price/EPS1 10.21 53.96 22.50

Price/Sales1 1.73 2.36 1.40

Price/Book1 2.59 2.54 2.46

YTD% Price Change2 20.68% 194.36% 39.50%

Market Cap Change2 30.42% 194.36% 39.50%

Note 1: period ending 2016/09/30 Note 2: period ending 2016/11/30

Page 13

Dividend Policy

Dividend Total EPS Dividend Cash Dividend Stock

Year

Dividend

Cash

Dividend

Stock

Dividend

Total

EPS

Payout

Ratio

2016 4.0 0.7 4.7 5.1 92.0%

2015 4.5 0.5 5.0 5.0 100.0%

2014 3.8 0.3 4.1 4.5 91.1%

2013 1.7 0.3 2.0 3.3

Page 14

Company Goal

Short-term Goal Continue working with current customers to

increase business.

Expand business with 1st-tier network/telecom

and web-scale customers.

Developing ODM capabilities of 100G Ocs.

Long-term Goal Become a professional Optical / Electrical / Mechanical integration

manufacturer.

Co-develop Proprietary Optical Subsystem with global networking and

telecom system equipment suppliers.

Page 15

THANK YOU