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Tongtai Machine & Tool Co.
2015 Result Analyst Meeting
Tongtai Machine & Tool Co.(4526.TW)
Spokesperson -Lu Yen 2016.04
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Disclaimer
The forward-looking statements contained in this presentation aresubject to risks and uncertainties and actual results may differmaterially from those expressed or implied in these forward-lookingstatements. Tongtai Machine & Tool Co., Ltd makes no representationor warranty as to the accuracy or completeness of these forward-looking statements and nor dose Tongtai Machine & Tool Co., Ltdundertake any obligation to update any forward-looking statements,whether as a result of new information or future events.
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Agenda
Introduction of Tongtai Group
2015 Financial Report
Future Prospects
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Tongtai Group Strategy
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Company profile
Mr. Ryozo Yoshii
Founder
Mr. Jui-Hsiung Yen
Chairman
• Established January 9th, 1969
• Japanese founder Mr. Ryozo Yoshii• Capital US$ 85.3M (Dec., 2015)• Date of listing (IPO) September 15th, 2003• Stock code 4526.TW• Chairman Mr. Jui-Hsiung Yen• Employee (Tongtai/Group) 870/2,000 people (Jan., 2016) • Factory locations Taiwan(2), China(1)
• Main products Machining centers, CNC lathes, PCB drilling• 2015 turnover Group: US$ 306M ( rate=1:30)
• HQ location Taiwan Southern Science Park (66,116m²)
• Main products Machining centers, CNC lathes, PCB drilling•Subsidiary Honor/Apec/Quicktech/PCI SCEMM/Anger
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The structure of TTG
Tongtai Machine &
Tool Co. Ltd
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Global Strategy
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CNC machining centers
& CNC lathes
• World’s leading provider of Turnkey solutions with various type machines
• Horizontal/ Vertical
machining centers and CNC lathes, horizontal milling and boring machine
PCB
manufacturing machines
• Taiwan / China
• Top 3 in the world (30%)
• Main competitors- VIA (Japan) - Schmoll (Germany)
Competitive position with worldwide manufacturers
75%25%
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Main Product of TTG
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End user analysis Machine tools- Focus on automotive and aerospace industry (Double A) PCB- Focus on PCB industry and China market
Automotive,
41%
Others, 16%
Electronics,1
4%
Agency &
Dealer, 9%
Aerospace&
Medical, 5%
Mold, 4%
Metal
working, 4%
Machine,
3%
Motorcycle,
2%Motor, 2%
Rim, 0.20%
2015-Group revenue
Electronics,
96%
Automotive,
4%
2015-PCB rev. NT1,067 million
Automotive,
46%
Others,
18%Agency, 10%
Aerospace &
Medical, 6%
Metal
working, 5%
Machine, 4%
Mold,4% Motor, 3%
Electronics,
3% Motorcycle,
2%Rim, 0.30%
2015-Machine tools rev. NT8,122 million
Source: Tongtai Group A/D office
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Global ranking in 2014
1stamong Taiwanese machine tool makers
Ranked 41stin the world
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Recent Award Records
2011 2012 2013 2014 2015 2016
Top 100 Taiwan Brands Awards(Bureau of Foreign Trade, MOEA)
Potential Taiwan MittelstandAward
Industrial Excellence Award
National Brand Yushan Award
22th Taiwan Excellence Award
24th Taiwan Excellence Award
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2015 Financial Results
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Sales Revenue Analysis
Unit: million NT$
Others
Anger
Tongyu
PCI
Quicktech
Apec
Honor
Tongtai-PCB
Tongtai-Machine tools
Source: Tongtai Group A/D office
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Consolidated Revenue-By product/region
Prod
uct
Lathe, 27%
VMC, 43%
HMC, 11%
PCB, 20%
2014 REVENUE
NT9,074 MILLION
Lathe, 25%
VMC, 37%
HMC, 20%
PCB, 11%Transfer center, 8%
2015 REVENUE
NT9,189 MILLION
Taiwan, , 16%
China, 54%
Asia, 17%
Europe, 9%
America,
3%Others, 1% 2014
Taiwan, 13%
China, 46%
Asia, 13%
Europe, 22%
America,
5%
Others,
1%
2015
Reg
ion
Source: Tongtai Group A/D office
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Sales Revenue by Industry
Machine to
ols
PCB
Electronics
96%
Automotive
4%
2014-PCB Revenue NT2,407 million
Automotive,
46%
Others,
18%Agency, 10%
Aerospace&
Medical, 6%
Metal
working, 5%
Machine, 4%
Mold, 4%
Motor, 3%
Electronics, 3%
Motorcycle,
2%
Rim, 0.30%
2015-Machine tools revenue
NT8,122million
Automotive,
55%Agency,
18%
Others, 9%
Rim, 8%
Motorcycle
, 5%
Aerospace&
Medical, 4% Motor, 2%
2014-Machine tools revenue
NT6,668 million
Electronics
96%
Automotive
4%
2015-PCB Revenue NT1,067 million
Source: Tongtai Group A/D office
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The reason for higher gross profit: The main products of two new subsidiaries (PCI/Anger) are high gross profit machine types→HMC& Large-sized machines
Unit: Million NT$
Raw
Material,
86%
Labor+ overhead,
14%
Asia
Raw
Material,
67%
Labor+Overhead
, 33%
Europe
Source: Tongtai Group A/D office
Results highlight -Gross profit from operations(Rate )
Gross Profit Margin
Gross Profit
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Result highlight-EPS
Unit: NT$
Source: Tongtai Group A/D office
Cash Dividends
Stock Dividends
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Consolidate Profit and Loss Statement of 2015
Source: Tongtai Group A/D office
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Consolidate Balance Sheet of 2015 (Mil, NT$) 2014.12.31 2015.12.31
$ % $ %
Cash 1,282 9% 1,288 9%
A/R 3,958 29% 3,797 26%
Inventories 4,709 34% 4,874 34%
Other current assets 553 4% 380 3%
Property , plant and equipment
2,475 18% 3,144 22%
Other non-current assets 820 6% 879 6%
Total assets 13,797 100% 14,357 100%
Bank loan 3,270 24% 4,167 29%
A/P 2,667 19% 2,294 16%
Other liabilities 1,501 11% 1,483 10%
Total equity 6,359 46% 6,412 45%
Total liabilities and equity 13,797 100% 14,537 100%
Source: Tongtai Group A/D office
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Future Prospects
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•2nd Tongtai factory is expected to launch in H2,2016
• Continue seeking relevant partners and integrate the resource of the group to grow
•T-TAC activities and expansion
• Set up new bases in developing countries .ex: Iran、India….
• New technology adaption. New market development
• Focus on automotive and aerospace industry
New product
R&D
Business
model
Productivity adjustment
Group
Expansion
Growth strategy of Machine tools department
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Laser
Additive Manufacturing
Ultrasonic
Additive Manufacturing (AM) includes laser cladding and laser hardening.
Laser cladding is used to fix the surface of the mold. Laser hardening is able to change the material characteristics for satisfying customers’ needs.
Brittle materials machining, including Sapphire, Zirconia, Ceramic, Glass, Hardened steel.
New Technologies for Satisfying Customers’ Needs
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T-TAC expansion plan
TTAC - Shenzhen(2014)TTAC-Thailand (Est. 2016 Q3)
TTAC - Tongtai HQ (2013)TTAC- China HQ (Est. 2017)
TTAC - Switzerland(2015)
TTAC-North China (Est. 2017)TTAC Wuhan- (Est. 2016 Q4)
Product manufacturing
testing
Machining technology
Machine technology
Training
Technology exhibits
Tongtai’s skilled engineers will manufacture the first piece to confirm the client’s specifications.Introducing innovative technologies and added extra functions. T-TAC suggests the most suitable solutions.
Our staff will test current problems, and provide possible solutions.
T-TAC is open for training current clients, potential customers, agents, and affiliated employees to strengthen their abilities.
T-TAC is an excellent platform to launch new products by cooperation with software/hardware suppliers.
Tongtai-Technical Application Center is the realization ofManufacturing Servitization . Customers could get more technicalsupport by using TTAC. TTAC is expanded to all over the world stepby step
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First Tongtai open house on Mar.2016
46 machines which were newly developed
in the past two years were demonstrated
More than 1,000 guests visited Tongtai in 2 days
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Integrate group resource to focus on automotive industry
OEM Tier1 Tier2 Tier3 Tier4車廠 汽配廠 (鑄造廠 / 壓鑄廠 / 鍛造廠)含加工 高精度加工廠 一般外包廠 JOB SHOP
Tongtai ● ● ● ●
PCI ● ●
ANGER ● ● ●
OEM → 特性 特性 ← Tier4管銷費用高 管銷費用低產線彈性化低 產線彈性化高單機(線)產量高 單機(線)產量低加工物少樣 加工物多樣材料特定 材料不特定加工設備專用性高 加工設備專用性低全球性佈局 產業聚落供應鏈成員條文 一般性驗收條款營運風險高 營運風險低計畫性投資 接單性投資
操作人員素質高 操作人員素質低
售服成本高 售服成本低
TTG GROUP VS. 汽車產業供應鏈
汽車供應鏈產業特性
供應鏈
公司
TTG vs Automotive supply chain
The feature of automotive supply chain
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It is estimated that the growth of PCB industry in 2016 is conservative. IEK expects the growth rate of global PCB material in 2016 is 1.6%; 2.3% in 2017
Competitive analysis
Focus on low-end customers. Lack of capital. Second-hand machines or some basic machines are acceptable
Focus on middle to low-end customers. Speed is the first priority.The request for precision is not high. Price competition!
High-end customer:semiconductor、FPC、LCD、servo board、ceramic boardMiddle-end customer:automotive、4/6 layer PCB、consumer electronicsLow-end customer:SSB、DSB 、appliance board…(lower precision)
Customers who request for High Quality and Highprecision
Tongtai
VIA、SCHMOLL
Other small Chinese companies
Han’s Laser、Ta Liang、Dar harnq、Anderson
PCB market strategy-By Product
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PCB market strategy-By Region
•Take Shenzhen as the center and
expand to other cities
•Rely on the channels of the agency which arranged by the headquarters
•Take Suzhou as the center. The area includes Jiangsu.Zhejiang.Anhui.
Shandong and Northern China
• Provide advanced machine testing opportunities to large-scale Taiwanese company
Taiwan East China
South China
OthersFocus on China and Hongkong-invested company
Technical service
20%10%
65%5%
Focus on Taiwan-invested company
Agency
China(6)
Japan(2)
South east
Asia(1)
Korea(2)
UK(1)
USA(1)
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