3689 UDE
Gary Chen
July 2013
3689 UDE Gary Chen July 2013 Disclaimer The information contained - - PowerPoint PPT Presentation
3689 UDE Gary Chen July 2013 Disclaimer The information contained in this confidential document ("Presentation") has been prepared by UDE (the "Company"). It has not been fully verified and is subject to material updating,
July 2013
subject to material updating, revision and further amendment.
employees or advisers gives, has given or has authority to give, any representations or warranties (express or implied) as to, or in relation to, the accuracy, reliability or completeness of the information in this Presentation, or any revision or supplement thereof, or of any other written or oral information made or to be made available to any interested party or its advisers (all such information being referred to as "Information") and liability therefore is expressly
accept any liability whether direct or indirect, express or implied, contractual, tortious, statutory or otherwise, in respect of, the accuracy or completeness or injury of the Information or for any of the opinions contained herein or for any errors, omissions or misstatements or for any loss, howsoever arising, from the use of this Presentation or the information.
transaction and the right is reserved by the Company to terminate any discussions or negotiations with any prospective investors. In no circumstances will the Company be responsible for any costs, losses or expenses incurred in connection with any appraisal or investigation of the Company. In furnishing this Presentation, the Company does not undertake or agree to any obligation to provide the recipient with access to any additional information or to update this Presentation or to correct any inaccuracies in, or omissions from, this Presentation which may become apparent.
employees or advisers. Each party to whom this Presentation is made available must make its own independent assessment of the Company after making such investigations and taking such advice as may be deemed necessary. In particular, any estimates or projections or opinions contained herein necessarily involve significant elements of subjective judgment, analysis and assumptions and each recipient should satisfy itself in relation to such matters.
historical facts, that address future activities and events or developments that the Company expects, are forward‐looking statements. Although the Company believes the expectations expressed in such forward‐looking statements are based on reasonable assumptions, such statements are not guarantees of future performance and actual results or developments may differ materially from those in the forward‐looking statements. Factors that could cause actual results to differ materially from those in forward‐looking statements include market prices, continued availability of capital and financing, general economic, market or business conditions and other unforeseen events. Prospective Investors are cautioned that any such statements are not guarantees of future performance and that actual results or developments may differ materially from those projected in forward‐looking statements.
Founded in 2005 Ticker: 3689 TT 4,100 Full Time Employees Dedicated Mfg of Integrated RJ‐45 Ports 2012 Revenue of NT$3.9Bn
High Volume Mass Production
Product and Automation R&D, High Value‐ Added Production
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RJ45 Revenues (US$m)
‐ 50 100 150 200 250
Note: Bel Fuse recently acquired the RJ45 port business of TE Connectivity. This chart includes the TE Connectivity revenues in Bel Fuse’s total revenues.
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The UDE Way
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Soft Power UDPS Lean Production System Production Line Automation Strict Cost Management
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Line Operator.
training for each new employee.
group.
upon current production techniques.
methods are considered obsolete.
Creative Destruction Creative Destruction
Work Smart Work Smart
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Employee Development Employee Development
39% 62% ‐7% 5% ‐6% 16%
‐10% 0% 10% 20% 30% 40% 50% 60% 70%
組裝線人力成長率 產出量成長率 2010 v 2009 2011 v 2010 2012 v 2011
9 Growth in number of operators Growth in unit production
34 408 483 662 19% 28% 27% 26% 27% 19% 26% 13% 12% 10%
0% 5% 10% 15% 20% 25% 30% 35% 200 400 600 800 1,000
2008 2009 2010 2011 2012
More efficient production and higher profitability
NT$ million
~2008 2008~2009 2010~2012 2013
Linear line 70~130 OPs U Line implementation 25~30 OPs Small U line 8~12 OPs Advanced U line 3~5 OPs
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OP Production line PPH Capacity/hr Linear line 80 1 10 pcs 800 pcs U line 80 10 (8 P/line) 80 pcs 6,400 pcs
Chris Chen, President
20‐yrs experience Vice President, SpeedTech Manager of Mfg Technology, Delta
Justin Chang
Vice President of Guangdong Factory 20‐yrs experience SpeedTech KunShan Plant Manager
Tony Huang
Executive Assistant to the Chairman 18‐yrs experience CFO, Technology Quartek
Eric Shih, Head of Sales
16‐yrs experience Sales Manager, SpeedTech Supervisor – Sales, Delta Electronics
Elton Wu
CFO 18‐yrs experience Accounting Manager, Delta Electronics
Abel Lu
Vice President of Sichuan Factory 25‐yrs experience SpeedTech Dongguan R&D Manager
Alan Wang
Head of Audit and Head of IR 18‐yrs experience
TongLung Industry, Executive Assistant to the Chairman
Abulla Yu
Head of R&D 16‐yrs experience Vice Manager of R&D, Delta Electronics
Gary Chen
Founder and Chairman Over 25‐yrs experience Vice Chairman and President, SpeedTech
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The UDE Way
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Product Offering Customer Base
than 10%.
Industry Attributes
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RJ45 port production requires mastery of conventional connector production techniques and additional techniques specific to high speed data transfer
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Conventional Connector RJ45 Port RJ45 Port Mechanical Precision Structural Design Precision Injection High Speed Stamping Precise Mold Design High Speed Transmission Electronic Fine Tuning Noise and EMI Reduction Network and MB Protection Circuit Design
Signal Input Signal Filtering System Protection Signal Output Filter Surge/ESD Protection Integrated Ethernet IC RJ45 LAN Cable
Noise Filtering Signal Purification EMI Control Protection of networking IC and motherboard
Customized high frequency electromagnetic impedance design to match customer systems
Goal:Maintain high S/N ratio to guarantee complete and rapid signal transmission to the network IC on client motherboard
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Motherboard / AIO PC Networking Set‐Top BOX Server Blu‐ray Player / Internet TV Printer
√ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √
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The UDE Way
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Penetrate the high end networking market Claim share in the mass market consumer segment Raise global market share to 15% Grow annual revenues to NT$10bn
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UDE’s current global market share is 9%
* Additional addressable market refers to devices that do not currently have RJ 45 connections, but are expected to incorporate them in the future. Source: brokers and UDE estimates 1,250 0.0% 10.0% 20.0% 30.0% 40.0% 50.0% 60.0% ‐ 100 200 300 400 500 600 700 Mn ports Additional addressable market* Market size Market Share (%, RHS)
The UDE Way
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500 1000 1500 2000 2500 3000 3500 4000 2009 2010 2011 2012
PC Networking Consumer
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% 2009 2010 2011 2012
PC Networking Consumer
NTD m
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Personal Mobile Broadband + Enterprise Networking Broadband + Home Networking Broadband Popularization of virtualization technology → Software management, platforms and service Improved network infrastructure and higher transmission speeds
These are all drivers for growth in demand for RJ45 2x1, 2x4 and 2x6 multiple port devices
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The UDE Way
1,567 1,993 3,094 3,486 3,876 1,110 2008 2009 2010 2011 2012 1Q'13 125 268 472 454 528 166 2008 2009 2010 2011 2012 1Q'13 8.0% 13.4% 15.2% 13.0% 13.6% 15.0% 19.2% 27.8% 26.5% 25.5% 27.4% 27.3%
Revenues NTD$ million Gross Margin % Operating Profit
NTD$ million
Operating Margin %
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118 84 341 353 443 125 2008 2009 2010 2011 2012 1Q'13 2.55 1.65 6.45 6.08 7.08 1.86
EPS NTD Net Income NTD$ million
20.7 11.6 37.0 27.3 24.8 12.7 6.0 18.1 14.2 14.0 2008 2009 2010 2011 2012 ROE % ROA %
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Note: 2009 Net Profit was biased downwards by an NT$122m one time non‐cash write down of goodwill.
2008 2009 2010 2011 2012 1Q’13 Sales Revenue 1,567 1,993 3,094 3,486 3,876 1,110 Gross Profit 301 553 820 890 1,063 303 OP Profit 125 268 472 454 528 166 Income before tax 142 130 409 481 539 168 Net Income 118 84 341 353 443 125 EPS(NTD$) 2.55 1.65 6.45 6.08 7.08 1.86
NTD$ million
YOY (%) 2008 2009 2010 2011 2012 1Q’13 47.3 27.2 55.2 12.7 11.2 34.7 225.3 84.0 48.3 8.5 19.5 27.4 129.8 114.0 76.1 ‐3.8 16.3 43.3 187.3 ‐9.0 215.4 17.7 12.0 48.5 182.5 ‐28.7 305.1 3.7 25.5 65.7 17.9 ‐35.2 291.0 ‐5.8 16.4 52.7 29
2008 2009 2010 2011 2012 1Q’13 TOTAL ASSETS 1,243 1,565 2,194 2,784 3,566 4,058 Cash 143 314 275 751 1,099 1,289 NR & AR 362 580 706 757 918 1,247 Inventory 261 255 413 435 715 725 Fixed Asset 219 308 573 631 562 594 TOTAL LIABILITIES 587 774 1,142 1,248 1,525 1,824 Bank Loans 173 178 237 426 419 694 NP & AP 131 233 352 303 433 394 Accrued Exp 180 268 365 382 544 606 TOTAL EQUITY 656 791 1,052 1,536 2,041 2,234 Capital 483 527 532 614 676 676 Additional Paid‐in Capital 44 112 112 323 568 568 Retained Earnings 123 149 426 592 820 954
NTD$ million
YOY (%) 2008 2009 2010 2011 2012 1Q’13 99.5 25.9 40.2 26.9 28.1 13.8 37.5 119.6 ‐12.4 173.1 46.3 17.3 ‐22.2 60.2 21.7 7.2 21.3 35.8 715.6 ‐2.3 62.0 5.3 64.4 1.4 4,280 40.6 86.0 10.1 ‐10.9 5.7 322.3 31.9 47.5 9.3 22.2 19.6 84.0 2.9 33.1 79.7 ‐1.6 65.6 351.7 77.9 51.1 ‐13.9 42.9 ‐9.0 2,471 48.9 36.2 4.7 42.4 11.4 35.5 20.6 33.0 46.0 32.9 9.5 58.9 9.1 0.9 15.4 10.1 ‐20.0 154.5 188.4 75.9 186.0 21.1 185.9 39.0 38.5 16.3 30
A/R turnover days
96 86 76 77 79
Inventory turnover days
42 65 54 60 75
A/P turnover days
23 46 47 46 48
( NTD Million ) 2011 2012 Net income 353 443 Cash dividend 215 257 Dividend p/s (NT$) 3.5 3.8 Cash yield (%) 6.7*1 5.3*2 Payout ratio (%) 61% 58%
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Notes:
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Twisting Winding Assembly Process Complete
Hourly output Defect Rate Manual winding 50 pcs 2‐4% Auto winding 650 pcs Below 0.2%
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Low cost Low cost Widespread adaptation Widespread adaptation Ease of troubleshooting in manufacturing processes Ease of troubleshooting in manufacturing processes High compatibility with existing internet infrastructure High compatibility with existing internet infrastructure The advantages of copper‐based transmission
We expect that the key transmission technologies – copper, fiber optics and Wifi – will continue to co‐ exist in separate niches
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