Cal- Comp Technology (Philippines), Inc. (CCPH) Company Presentation - - PowerPoint PPT Presentation

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Cal- Comp Technology (Philippines), Inc. (CCPH) Company Presentation - - PowerPoint PPT Presentation

Cal- Comp Technology (Philippines), Inc. (CCPH) Company Presentation September 2019 Page 0 Disclaimer This presentation has been prepared by Cal-Comp Technology (Philippines), Inc. (the CCPH) solely for use at the presentation


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September 2019

Cal-Comp Technology (Philippines), Inc. (“CCPH”)

Company Presentation

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Disclaimer

This presentation has been prepared by Cal-Comp Technology (Philippines), Inc. (the “CCPH”) solely for use at the presentation regarding CCPH and its subsidiary, Kinpo Electronics (Philippines), Inc. (“KPPH”) on a consolidated basis (collectively, the “Company”). The information contained in this presentation has been taken from sources deemed reliable by the Group and the Company. However, no representation or warranty (whether express or implied) is made as to the fairness, accuracy, completeness or correctness of, and no reliance should be placed on, such information or opinions contained herein. None of the Company, any member of the Group, any of their advisors nor any of their respective affiliates or any of their directors, officers, employees, advisers or representatives shall have any liability whatsoever (for negligence or misrepresentation or in tort or under contract or otherwise) for any loss howsoever arising from any use of information presented at this presentation or otherwise arising in connection with this presentation. This presentation may contain statements that reflect the current beliefs and expectations of the Group and the Company about the future as of the respective dates

  • indicated. These forward-looking statements are based on a number of assumptions about the operations of the Group and the Company and factors beyond the control
  • f the Group and the Company and are subject to significant risks and uncertainties, and, accordingly, actual results may differ materially from these forward-looking

statements contained in this presentation regarding past trends or activities should not be taken as a representation that such trends or activities will continue in the

  • future. There is no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. You should not

place undue reliance on forward-looking statements, which speak only as of the date of this presentation. The Company and its advisors have no obligation and do not undertake to revise forward-looking statements contained in this presentation to reflect future events or circumstances. By accepting this presentation, the recipient acknowledges and agrees that (1) it will hold in confidence the information contained herein; (2) it will not distribute or reproduce this presentation, in whole or in part; and (3) the recipient is (a) located outside the United States, (b) is accustomed to receiving the type of information contained in this presentation and (c) is a person into whose possession this presentation may be lawfully delivered in accordance with the laws of the jurisdiction in which it is located. The information contained in this presentation is not to be taken as any recommendation made by the Group or the Company or any of their advisors or any other person to enter into any agreement with regard to any investment. This presentation and any accompanying slides or other materials are strictly confidential and are not for release, distribution or publication, whether directly or indirectly, and whether in whole or in part, into or in the United States, Australia, Canada, or any other jurisdiction in which such release, distribution or publication would be unlawful. This presentation is not an offer for sale of any equity shares or any other security of the Company or any other member of the Group. This document does not constitute a prospectus, offering circular, or offering document or form a part of any offer, invitation or solicitation to purchase or subscribe for securities in any

  • jurisdiction. Any securities referred to herein have not been and will not be registered under the U.S. Securities Act of 1933, as amended (the “Securities Act"), or the

securities laws of any state of the United States. Any securities mentioned herein or at the investor meetings may not be offered or sold within the United States absent registration or an exemption from registration under the Securities Act. No public offering of any securities is being made in the United States, or in any other jurisdiction where such an offering is restricted or prohibited. By participating in this presentation or by accepting any copy of the slides presented, you agree to be bound by the foregoing limitations.

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Table of Contents

Section

  • 1. Introduction to the Kinpo Group
  • 2. Business Overview
  • 3. Industry Overview and Outlook
  • 4. Key Strengths of Our Business
  • 5. Key Strategies Moving Forward
  • 6. Financial Highlights

Appendix

  • A. Corporate Structure
  • B. Supplemental General Information
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Introduction to the Kinpo Group

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Kinpo Group of Companies

Established in 1973, Kinpo Group is a Leading Global Technology ODM Company

38.6 38.6 B B US Dollar Revenue(1) 8 Publicly Listed Companies 24 24 Group Subsidiary Companies 69 69 Factories 120,902 120,902 Employees

Note: 1) As of FY2018

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Kinpo Group of Companies (Cont’d)

Kinpo

Consumer Electronics / PC Peripheral

Compal

Notebook, PC, TV and Mobile Precision Plastic

Cal-Comp Precision AcBEL Cal-Comp Biotech

Power Supply Plant Factory 3D Printing

XYZ Printing CastleNet CCBS Cal-Comp Big Data Cal-Comp (Thailand)

EMS Semiconductor Packaging Big Data Cable Modem

New Era AI Robotic

AI Robot

Kinpo Group

Founder/Chairman: Rock Hsu

Semiconductor Design

QBit Arcadyan

WiFi

Allied

Bare PCB Manufacturing

Compal Broadband Networks

Networking, Home Security

New Kinpo Group (“NKG”)

CEO: Simon Shen

Compal Group

CEO: Martin Wong Cal-Comp Automation and Industrial 4.0 Service

Automation and Industrial 4.0 Service

Cal-Comp Yue Yang

EMS

CCPH

EMS/ODM for Consumer Appliances & Electronics

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Overview of NKG’s Key Major Product Lines

Calculators HDD PCBA External HDD/NAS Set-Top- Boxes Printers SSD 3D Printer Gateway Semiconductor Package Smart Home Appliance

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Overview of NKG’s Emerging Technologies/New Products 3D Printer Robot

Semiconductor

HiMirror Beauty Product

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Philippines Thailand Malaysia

We are proud that NKG is the Largest Contract Manufacturer in Southeast Asia

NKG Group have factories in Thailand, Philippines and Malaysia, especially long history in Thailand for 28 years and Philippines for 20 years.

NKG is the Largest Contract Manufacturer in Southeast Asia

Thailand Philippines Malaysia

Land Area (m2) 444,736 288,947 12,667 Floor Area (m2) 335,115 213,925 13,829 Employees 24,783 15,725 631

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Business Overview

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Why the Philippines?

Thailand Philippines Malaysia China  Sufficient supply of workforce  Highly educated & skilled workers  Government support (PEZA)  Flourishing civil construction & stable infrastructures  Tax benefits  Shielded from impact of international trade conflicts

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Why CCPH?

CCPH offers its customers lower costs, faster delivery times, design capabilities and world-class product quality

Global Manufacturing Presence End to End Service Enhancing Vertical Integration Strong Automation Engineering Global On- Site Support Long Term Partnership with Customers Real Time Quality Management System

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CCPH At a Glance

  • CCPH was incorporated in 2012 and is the Philippine EMS/ODM subsidiary of NKG, a private global

technology conglomerate based in Taiwan with listed subsidiaries in Taiwan and Thailand

  • NKG ranks in the top 10 EMS/ODM companies globally by revenue according to QYResearch with total

revenues of US$6.7Billion in 2018

  • CCPH manufactures over 70% of all scientific calculators globally
  • CCPH manufactures:
  • electronic storage products: HDDs, and
  • consumer electronics products: calculators, smart home appliances and smart beauty products,

pachinko display, and solar junction boxes Product Segment Description FY2018 Sale of Goods Contribution Products Key Customers Calculators CCPH manufactures different types of calculators for the world’s best-known calculator brands ~27.6%

  • Basic calculators
  • Scientific calculators
  • Financial calculators
  • Graphing calculators
  • TI-Innovator Hub

(1)

(1) (1)

Other Consumer Electronics CCPH provides final assembly services and manufacturing services for a range

  • f other consumer electronics products

(including products under its own brand HiMirrorTM) ~65.1%

  • Smart home

appliances

  • Pachinko display
  • Solar junction box
  • Beauty products
  • Robot products

(1)

(2)

Storage Products CCPH produces various types of HDD PCBA and external HDD products ~7.3%

  • Hard drive disks

(HDDs) including PCBA and external HDDs

Leading UK-based technology company

7% 93% FY2018 CCPH Sale of Goods Breakdown US$ 413M Storage Products Consumer Products

Note: 1) Through Kinpo Electronics Inc., a related party 2) Through Cal-Comp Big Data, a related party

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CCPH’s Ownership Structure

Kinpo International (Singapore) Pte. Ltd.

(Wholly owned by Kinpo Electronics, Inc.)

Kinpo Electronics (Philippines), Inc.

(Manufactures Calculators and Smart Home Appliances)

Cal-Comp Technology (Philippines), Inc.

(Manufactures HDDs and PCBAs)

Cal-Comp Electronics (Thailand) Public Company Limited

80.81% 100% 19.19%

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Industry Overview & Outlook

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9.1% share

Industry Size

CCPH Primarily Operates in Fast-Growing Regions

The rapid rise in the demand for consumer and smart electronic devices across the globe is driving the EMS market growth. ASEAN is expected to continue to outgrow the broader industry due to lower labor costs and improving talent in the region. NKG is committed to expanding its ASEAN manufacturing base with increasing operations in the Philippines (CCPH) in particular , due to the country’s deepening talent pool and good labor relations.

9.7% share 10.7% share Country / Region 2014 – 2018 CAGR 2018 – 2025 CAGR USA 3.4% 3.8% Europe 3.3% 3.5% China 5.4% 6.9% Japan 3.0% 4.2% Taiwan 4.8% 3.4% Southeast Asia 6.5% 6.6% ROW 5.0% 3.9% Global Average 4.7% 5.1% Source: QY Research 6.4 7.3 9.4 5.2 5.9 7.5 12.3 15.2 24.4 2.1 2.3 3.1 6.0 7.3 9.2 3.5 4.5 7.1 3.2 3.9 5.1 38.7 46.4 65.7 2014 2018 2025E

Revenue Comparison by Region for 2014, 2018, 2025E (USDbn)

USA Europe China Japan Taiwan Southeast Asia ROW Total

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Industry Size

The Company’s Products are Primarily Focused on the Fastest-Growing Segment

The Consumer segment is projected to have the fastest rate of growth. The Company is mainly involved in the manufacture

  • f

consumer electronics.

14.3 14.4 13.1 12.4 16.0 25.8 5.7 7.8 13.5 3.7 4.8 8.0 2.6 3.3 5.3 38.7 46.4 65.7 2014 2018 2025E

Revenue Comparison by Application for 2014, 2018, 2025E (USDbn)

Computer Communications Consumer Industrial Others 14.7% share 16.8% share 20.6% share End User / Application 2014 – 2018 CAGR 2018 – 2025 CAGR Computer 0.2%

  • 1.3%

Communications 6.6% 7.1% Consumer 8.2% 8.2% Industrial 6.9% 7.4% Others 6.4% 6.9% Global Average 4.7% 5.1% Source: QY Research

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EMS Market Players

NKG is a leading player regionally and globally

Total EMS revenue of USD46.4bn in 2018 is shared largely by fifteen major players. Globally, New Kinpo Group is the second largest EMS company, with 14.5% market share according to revenue in 2018. NKG is also a leading player in Southeast Asia in 2018, holding an equivalent to 21.9%

  • f the total market

share according to revenue.

New Kinpo Group 14.5% 21.6% 10.4% 5.6% 4.8% 4.7% 4.4% 4.1% 3.7% 3.3% 2.8% 2.5% 1.9% 1.8% 1.3% Others 12.5%

Share of Players in Global EMS Revenue in 2018

Source: QY Research New Kinpo Group 21.9% 18.4% 5.4% 3.1% 4.1% 5.4% 3.7% 4.3% 4.0% 2.7% 2.4% 2.2% 1.2% 1.0% 1.1% Others 19.0%

Share of Players in Southeast Asian EMS Revenue in 2018

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Key Strengths of Our Business

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Strong Parent Support

As a member of NKG, CCPH benefits from NKG’s:

Global Design, Research and Development Capabilities Vertically Integrated Supply Chain Long Global Customer and Supplier Relationships Stringent Quality Standards Strong Financial Resources Dynamic Management Team with Long Global Experience

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Fast Scalability

251 4,791 9,167 38,399 42,587 47,027 50,339 2012 2013 2014 2015 2016 2017 2018

Total Units Produced (000's of units)

95 173 1,632 3,959 3,169 6,813 7,390

2012 2013 2014 2015 2016 2017 2018

Total Personnel(1)

Note: 1) Includes both regular employees and seasonal workers sourced through third party manpower agencies

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Smart Automation

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Real-Time Quality Management

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Globally Certified Standards

Safety Electromagnetic Capability Corporate Social Responsibility Quality

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Strong Board and Management Team

Name Position Background

Simon Shen Chairman, President & CEO

  • CEO of the New Kinpo Group since 2008; led the Group’s transformation

from a traditional EMS company to a vertically integrated company with enhanced supply chain and R&D capabilities Tony Chou Director & General Manager

  • CCPH Director since 2012 and General Manager since 2016
  • COO of the New Kinpo Group
  • Director and Managing Director of Cal-Comp Electronic (Thailand) since

2006 with over 30 years of Manufacturing experience Hugh Lo Director & Investor Relations Officer

  • Over 30 years experience in the Manufacturing and Consumer fields
  • Masters in Industrial Engineering from the University of Massachusetts

Kirby Wong Director

  • Over 20 years experience in Manufacturing, with strong technical

background and experience on program management Naipuu You Director

  • Over 20 years experience in EMS industry and Business development

Derek Khoo Director

  • Over 20 years experience in the contract manufacturing industry,

establishing and developing new businesses with key international customers

Over 170 years of combined experience in Global Manufacturing :

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Strong Board and Management Team (Cont’d)

Name Position Background

Gregory L. Domingo Independent Director

  • Former Secretary of DTI and Head of BOI
  • Former Director of SMIC, Belle Corp. & Carmelray-JTCI Corp., and

currently a Senior Advisor to SMIC and a board member of BDO Private Bank Cirilo P. Noel Independent Director

  • Former Chairman & Managing Partner of SGV & Co.
  • Director of Globe Telecom, Security Bank, JG Summit & St. Luke’s

Medical Center Emmanuel

  • M. Lombos

Independent Director

  • Partner at SyCip Salazar Hernandez & Gatmaitan Law Offices

Marlo P. Arcinas Corporate Secretary

  • Has served as external legal counsel for First Gen Corporation, First Gas

Power Corporation & Meralco Industrial Engineering Services among many others Frank Yu Compliance Officer

  • Senior Legal Manager of NKG since 2006
  • Over 20 years of experience in Legal Management and Regulatory

Compliance Martin Lee Treasurer

  • Has served as an independent auditor for Deloitte, and has 19 years of

Accounting and Finance experience

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Key Strategies Moving Forward

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Continuous Improvements & Innovation in our Manufacturing Capabilities

  • Continuously innovate and improve technology, product quality and design
  • Capture business from customers looking to migrate manufacturing out of China by

expanding Philippine operations and capabilities

  • Constantly improve efficiency through automation for lower cost and better quality
  • Improve supply chain capabilities to improve raw material costs and reduce lead

times, through NKG’s Vendor Partnership Program

  • Design-for-manufacturing capabilities, designing their own manufacturing systems

tailored to the clients’ products

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Develop Local Engineering Talent

  • As of June 30, 2019, CCPH has 429

engineers in the Philippines

  • Plans to further increase this number in
  • rder

to increase Research and Development capabilities within the country

  • On average, it takes three to five years to

fully train a new engineer

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Develop Our Own Brands and the Philippine Domestic Market For New Consumer-Focused Products & Emerging Technologies

  • The Company intends to leverage on NKG’s own-product designs and develop and

market these in the Philippines

  • The Company continuously negotiates with local players to determine the market

feasibility of manufacturing and introducing certain products, such as smart beauty products, and robotics, into the Philippine market

Beauty Products Robotics

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Financial Highlights

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Historical Financial Performance

  • Strong growth in revenue due to higher

demand for smart home appliances and shift in manufacturing from China to ASEAN

  • 1H financial performance is not

representative of full year performance due to typically stronger seasonal demand in the 2H of the year

123.6 210.6 415.2 191.8 278.8 0.0 100.0 200.0 300.0 400.0 500.0 2016 2017 2018 6M 2018 6M 2019 In US$ Millions

Total Revenue

YoY Growth = 45.3% CAGR = 83.3%

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Historical Financial Performance (Cont’d)

  • Gross margins continue to improve

due to manufacturing process improvements

  • Operating margins also improved

due to better gross margins and continued cost-control initiatives

  • Due to the improvement in margins,

net income grew strongly in the last 3 years and in the interim period of 2019

  • Margins improved due to

increases in production efficiency and utilization rate

  • Operating expenses did not

increase as fast as revenue growth

7.3% 8.2% 11.1% 12.6% 13.3% 2.2% 4.7% 8.1% 10.1% 11.3% 0.0% 2.0% 4.0% 6.0% 8.0% 10.0% 12.0% 14.0% 2016 2017 2018 6M 2018 6M 2019

Gross and Operating Margins

Gross Margin Operating Margin 0.5 7.2 31.4 18.7 28.5 0.0 5.0 10.0 15.0 20.0 25.0 30.0 35.0 2016 2017 2018 6M 2018 6M 2019 In US$ Millions

Net Income

CAGR = 688.7%

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Robust Balance Sheet

  • The Company maintains a stable

balance sheet by actively managing its liquidity and equity position

  • As of June 30, 2019, the Company had

a total of US$94 million in bank debt, with a healthy Debt to Equity ratio of 1.24x

166.0 257.8 343.2 406.6 41.6 126.3 180.3 224.8 0.0 100.0 200.0 300.0 400.0 500.0 2016 2017 2018 6M 2019 In US$ Million

Assets and Liabilities

Assets Liabilities 1.29 1.06 1.12 1.15 0.33 0.96 1.11 1.24 0.1 0.4 0.7 1.0 1.3 1.6 2016 2017 2018 6M 2019 (x)

Financial Ratios

Current Ratio D/E Ratio

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Thank You

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Appendix A

Corporate Structure

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Corporate Structure

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Appendix B

Supplementary General Information

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CCPH Philippine Footprint

Business

  • Electronic Manufacturing Services (“EMS”)
  • Original Design Manufacturer (“ODM”)

Products

  • Calculators
  • Smart Home Appliances
  • External Hard Disk Drives (“HDDs”)
  • HDD Printed Circuit Board Assemblies (“HDD PCBA”)
  • Pachinko Displays
  • Solar Junction Boxes
  • Beauty Products

Clients

  • Casio(1)
  • Citizen(1)
  • Texas Instruments(1)
  • Toshiba
  • UK-based smart-home appliance provider
  • Tigo(2)
  • Shinsei(1)

Locations

  • Lima Technology Center, Lipa City, Batangas
  • First Philippine Industrial Park, Sto. Tomas, Batangas

Total Leased Land Space

  • 286,434 square meters

Total Manufacturing Space

  • 78,146 square meters

Total Workforce

  • Approximately 7,000 employees(3)

Notes: 1. Through Kinpo Electronics Inc., a related party 2. Through Cal-Comp Big Data, a related party 3. Includes regular and seasonal employees sourced through third party manpower agencies

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Why NKG?

  • Vertically-integrated supply chain
  • Strong automation engineering and advanced

automation capabilities

  • Effective management of overhead costs

Competitive Cost

  • Flexibility to satisfy customers’ On-Time Delivery (OTD)

requirements

Experienced Production Planning

  • Certified to the latest Safety, EMC, CSR and Quality

System Standards

Quality Standard

  • Applies Design for Manufacturing (DFM) and Design for

Cost Effective Assembly (DFC) to ensure product design is optimized for assembly, service, quality and process

Design Capabilities

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Product-Specific Initiatives

  • HDD PCBA and External HDD – Create higher capacity HDDs at lower cost
  • Calculators – Improve existing product capabilities and develop ultra-thin

stylish designs

  • Smart Home Appliances – Improve productivity and efficiency in order to

win orders for new product lines

  • Smart Beauty Products – Launched the “HiMirror” brand in 2017, and will

continue to develop and market new products in the category