#1YUNGTAY ENGINEERING 2020.12.10 YUNGTAY ENGINEERING INVESTORS PRESENTATION#2SAFE HARBOR NOTICE YUNGTAY's statements of its current expectations are forward-looking statements subject to significant risks and uncertainties and actual results may differ materially from those contained in the forward-looking statements. Except as required by law, we undertake no obligation to update any forward-looking statement, whether as a result of new information, future events, or otherwise.#3VA COMPANY OVERVIEW#4YUNGTAY ENGINEERING (1507.TT) INVESTOR PRESENTATION 2020 COMPANY OVERVIEW OPERATION REPORTS INDUSTRY & YUNGTAY OUTLOOK 4 Company Background FOUNDED LISTING YEAR TICKER NO. PAID-IN CAPITAL 2019 REVENUE NO. OF EMPLOYEES CORE PRODUCTS : 1966 : 1989 : 1507.TT NT$4.1 Billion : NT$13.7 B billion : 5,146 (as of Q3 2020) : Elevators, Escalators, Moving Walkways EXPANDED TO 1993 MAINLAND CHINA 1966 FOUNDED 2010 EXPANDED TO VIETNAM#5YUNGTAY ENGINEERING (1507.TT) INVESTOR PRESENTATION 2020 COMPANY OVERVIEW OPERATION REPORTS INDUSTRY & YUNGTAY OUTLOOK 5 Organizational Structure G YUNGTAY ENGINEERING CO., LTD SUBSIDIARIES YUNGTAY ELEVATOR EQUIPMENT(CHINA) CO., LTD. YUNGTAY-HITACHI CONSTRUCTION MACHINARY CO., LTD. YUNGCHUN CAPITAL, INC. SHANGHAI GIE EM CO., LTD. RELATED COMPANIES EVEST CORPORATION#6YUNGTAY ENGINEERING (1507.TT) INVESTOR PRESENTATION 2020 Core Products 66 COMPANY OVERVIEW OPERATION REPORTS INDUSTRY & YUNGTAY OUTLOOK 6 Yungtay has a complete, comprehensive line of products in the elevator and lifts industry DO Villa Elevator Escalator Freight Elevator Passenger Elevator Firefighter Elevator TH Dumbwaiter Room-less Hospital Bed Elevator Elevator Hydraulic Elevator Panoramic Elevator Moving Walkway و,#7YUNGTAY ENGINEERING (1507.TT) INVESTOR PRESENTATION 2020 COMPANY OVERVIEW OPERATION REPORTS INDUSTRY & YUNGTAY OUTLOOK 7 Yungtay (Taiwan) Factory TAOYUAN FACTORY Land Area 40,619 m² Factory Area 38,032 m² MAIN PRODUCTION LINE ■ Steel Board ■ Compound Machining Production Line ■ Painting Process Line ■ Motor Process Line ■ Welding Production Line ■IM Motor Process Line ■ Electronics Assembly Production Line ■ Permanent Magnet Assembly Production Line 6 Branch Offices 5 Sales Departments 30 Service Maintenance Stations#8YUNGTAY ENGINEERING (1507.TT) INVESTOR PRESENTATION 2020 COMPANY OVERVIEW OPERATION REPORTS INDUSTRY & YUNGTAY OUTLOOK 8 Yungtay (China) Factories LAND AREA Shanghai 112,189 m² Tianjin 63,937 m² Chengdu 60,000 m² Gie 28,661 m² FACTORY AREA Shanghai 46,270 m² Tianjin 34,993 m² Chengdu 33,278 m² Gie 30,830 m² MAIN PRODUCTION LINE ■ Steel Board Compound Machine PL ■ Cold Work ■ Motor Process Line ■ Painting PL ■ PCB Assembly Line ■ Control Cabinet Assembly Line 5 Sales Districts 50 Branch Offices 110 Department Offices 380 Service Maintenance Stations#9OPERATION REPORTS#10YUNGTAY ENGINEERING (1507.TT) INVESTOR PRESENTATION 2020 COMPANY OVERVIEW OPERATION REPORTS INDUSTRY & YUNGTAY OUTLOOK 10 Year-to-3Q20 Results: Profitability increased significantly Sales of first 9 months in 2020 increased 8.5% yoy Gross Margin improved to 25.6%, +1.6pp ◆ Op Profit was NT$968 mn, up 65.7% yoy ◆ Op Margin raised to 8.9%, +3.0pp Overall, enhancement in profitability is expected to continue in coming years First 3Q FY2020 FY2019 YOY (Unit: NT$ millions) Revenue 10,827 9,981 8.5% Gross Profit 2,774 2,392 16.0% Operating Profit 968 584 65.7% Net Profit 1,005 761 32.1% Gross Margin 25.6% 24.0% +1.6%pt Op Margin 8.9% 5.9% +3.0%pt Net Margin 9.3% 7.6% +1.7%pt Source: Company Data#11YUNGTAY ENGINEERING (1507.TT) COMPANY OVERVIEW OPERATION REPORTS INDUSTRY & YUNGTAY OUTLOOK INVESTOR PRESENTATION 2020 3Q20 Results: Substantial OM enhancement from 2019 11 Gross Margin accretive action: New product strategy (segmentation) Supply chain management & Cost reduction. ◆ Op Margin enhancement: Effective cost controls & Scale economies ◆ 3Q20 Op Profit up 221.5% from 2019 3Q20 Op Margin enhanced to 8.9% from 3.6% in 2019 NT$ mn 600 500 Op Profit Op Margin Op Margin 12% 9.5% 8.9% 8.2% 400 7.3% 7.1% 6.4% 378 8% 356 COVID-19 300 262 265 234 4.0% 3.6% 205 4% 200 138 100 118 0 0% 4Q18 1Q19 2Q19 3Q19 4Q19 1Q20 2Q20 3Q20 Source: Company Data#12YUNGTAY ENGINEERING (1507.TT) INVESTOR PRESENTATION 2020 COMPANY OVERVIEW OPERATION REPORTS INDUSTRY & YUNGTAY OUTLOOK China Market: Key focus for future earning growth China subsidiaries collectively account for ~63% of consolidated assets Op loss was reported for 2018/2019, due to drop in sales & lack of op scale China market is our key focus to enhance the overall profitability Op Profit: China subsidiaries were the profit drag Over 60% of consolidated assets in China NT$ mn 2,000 NT$8.0 bn, 37% 1,500 1,268 Taiwan 1,176 1,000 China NT$13.7 bn, 63% 500 (500) Assets related to China Operation Source: Company, as of 2019/12/31 (194) FY2018 Source: Company, Elevator Sales & Service Only (290) FY2019 12 POICE#13YUNGTAY ENGINEERING (1507.TT) COMPANY OVERVIEW OPERATION REPORTS INDUSTRY & YUNGTAY OUTLOOK INVESTOR PRESENTATION 2020 China Subs: Turnaround achieved and profit on the rise Operational results start to reflect our efforts in the last 18 months NT$ mn China market is now a catalyst for earning growth 225 China Sub posted a turnaround for 2Q20 and over NT$100 mn profit for 3Q20 113 Successful and impactful approaches: • • New product strategies Alternate component sourcing 24 24 13 105 Net profit of Yungtay Engineering Limited (HK) (113) . Direct-selling business model, and (131) (156) (225) • Strategic customer expansion (260) (338) FY2018 FY2019 1Q20 Source: Company Data 2Q20 3Q20#14YUNGTAY ENGINEERING (1507.TT) INVESTOR PRESENTATION 2020 COMPANY OVERVIEW OPERATION REPORTS INDUSTRY & YUNGTAY OUTLOOK 14 Our China strategies are effective and promising ◆ Strategic Customer: expanding the base from 2 (2018) to 23 (as of Sep '20) Direct Sales Model: up from 15% (2019) to 27% (Jan-Sep/20) of Sales Market share gain: up from 1.65% (2018) to 3.03% (2020), up 111% in unit sales Expanding Alliances in China Gaining Great Traction in China Market (For First 8 months of the years) Unit Sales Strat. Customers Unit Sales 4,000 3,800 25 20,000 Market Share 8% 20 20 3,000 15,000 14,850 6% 12,466 15 2,000 10,000 4% 3.03% 1,500 10 900 7,035 1.65% 2.68% 1,000 5,000 2% 8 5 2 FY2018 Source: China Elevator Association, Company data 0 0 0 FY2018 FY2019 Jan-Aug/20 Source: Company, Data FY2019 FY2020E 90 0%#15YUNGTAY ENGINEERING (1507.TT) INVESTOR PRESENTATION 2020 COMPANY OVERVIEW OPERATION REPORTS INDUSTRY & YUNGTAY OUTLOOK 15 Strategies working, China gross margin continues to trend up Sales GM improved substantially from 11.7% (2019) to 19.7% (3Q20) Service GM also enhanced significantly from 24.7% (2019) to 30.5% (3Q20) ◆ New China strategies since 2019 are proven successful and expected to further enhance profitability Sales & Service Margins on the Upward Trend Gross Margin Govt Subsidies on Elevator Sales 40% 30% 27.2% 20% 31.3% 30.5% 24.7% 25.8% 16.0% 19.7% 10% 11.1% 11.7% 0% 4Q18 1Q19 12.7% -Sales -Service 2Q19 3Q19 4Q19 1Q20 2Q20 3Q20 Source: Company Data Note: Government subsidies in 1Q20 & 2Q20#16YUNGTAY ENGINEERING (1507.TT) INVESTOR PRESENTATION 2020 COMPANY OVERVIEW OPERATION REPORTS INDUSTRY & YUNGTAY OUTLOOK 16 China: Strong order book sets the foundation for future growth Fast-growing China order book, 3Q20 up 64% yoy, radically secure the growth for next 1~2 years Growth in deposit orders was robust, 3Q20 up 68% yoy, indicating strong customer commitment Year-to-Nov, order book up 26.7% yoy and deposit orders up 33.8% yoy; indicating an upbeat outlook for China market Orders in China: Gaining market share Deposits in China: Strong customer commitment الس Unit 9,000 8,000 7,000 6,000 4,984 5,000 4,651 4,699 3,963 3,971 4,000 3,340 3,054 3,000 1,879 2,000 1,000 0 1Q18 2Q18 3Q18 4Q18 1Q19 2Q19 3Q19 4Q19 1Q20 2Q20 3Q20 Source: Company Data Source: Company Data Unit COVID-19 7,000 7,637 6,000 COVID-19 6,058 5,636 6,586 4,899 5,000 4,000 3,995 3,602 3,000 2,498 2,579 2,779 2,260 1,923 1,877 2,000 1,454 1,000 0 1 1Q18 2Q18 3Q18 4Q18 1Q19 2Q19 3Q19 4Q19 1Q20 2Q20 3Q20#17YUNGTAY ENGINEERING (1507.TT) INVESTOR PRESENTATION 2020 COMPANY OVERVIEW OPERATION REPORTS INDUSTRY & YUNGTAY OUTLOOK 17 Expecting a lot more from China market Step-1: Sales & Profit Generation via Market Share Gain Step-2: Build a Solid Installation Base at Scale Expected Outcome: Gradual Increase on High-margin After-Sales Service Business#18YUNGTAY ENGINEERING (1507.TT) INVESTOR PRESENTATION 2020 COMPANY OVERVIEW OPERATION REPORTS INDUSTRY & YUNGTAY OUTLOOK Taiwan: Demonstrates proven high-margin service business Elevator/Escalator Sales builds a solid installation base with Op Margin around 3% Solid installation base, in return, stimulates consistent demand for After Sales Service Superior service capabilities generates Service Business Op Margin >40%, on a large scale Elevator / Escalator Sales in Taiwan FY2020E annualized of YT3Q20 Service Business in Taiwan FY2020E = annualized of YT3Q20 Sales Service Profit Profit NT$ mn Profitability 3,369 3,500 Op Margin, % 40% NT$ mn Profitability Op Margin, % 3,500 60% 3,169 3,093 3,017 2,894 3,000 3,000 2,741 50% 42.2% 40.2% 30% 38.5% 2,500 2,500 40% 2,000 2,000 20% 30% 1,500 1,500 1,306 1,162 1,055 20% 1,000 1,000 10% 3.8% 500 120 0 FY2018 3.5% 106 FY2019 FY2020E 3.0% 10% 500 102 0% 0 FY2018 0% FY2019 FY2020E Source: Company Data Source: Company Data 18#19YUNGTAY ENGINEERING (1507.TT) INVESTOR PRESENTATION 2020 COMPANY OVERVIEW OPERATION REPORTS INDUSTRY & YUNGTAY OUTLOOK 19 China: Expansion + Stable Customer Base = Increase in Op Profit Ranked 9th in China; market share >3%; China accounted for 50% of YT3Q20 sales ◆ Expand market share & enhance profitability, and build a solid base, which will drive Service Business ◆ 3Q20 Sales OM > 3%; YT3Q Service OM is around 19% (huge upside potential, compared to >40% in TW) 3Q20 Sales OM improved to >3% Sales Profit FY2020E annualized of YT3Q20 = Service OM improved significantly for YT3Q20 FY2020E = annualized of YT3Q20 NT$ mn Profitability 2,500 Op Margin, % 50% NT$ mn Service Profit Profitability 2,500 Op Margin, % 25% 2,012 2,000 40% 2,000 18.8% 20% 1,464 1,500 30% 957 1,500 1,338 1,347 11.3% 1,396 15% 1,000 20% 8.4% 500 0 10% 1,000 3.3% 0% 500 (500) (1,000) (6.2%) -10% 112 LLL 152 10% 5% 263 (19.3%) 1Q20 2Q20 -20% 0 3Q20 Source: Company Data FY2018 Source: Company Data FY2019 0% FY2020E#20INDUSTRY & YUNGTAY OUTLOOK#21YUNGTAY ENGINEERING (1507.TT) INVESTOR PRESENTATION 2020 COMPANY OVERVIEW OPERATION REPORTS INDUSTRY & YUNGTAY OUTLOOK 21 Taiwan Real Estate Market Domestic Residential Domestic Real-Estate Sale Transfer (Acc. Jan - Aug) 200K BUILDING YoY Growth 2.5% Construction Area (Acc. Jan - Sep) 17M m² YoY Growth 8.8% Construction Area (Acc. Jan - Sep) 31M m² YoY Growth 16.2% Commenced Construction Area (Acc. Jan - Sep) 13M m² YoY Growth 11.3% Commenced Construction Area (Acc. Jan - Sep) 22M m² YoY Growth 13.7% Home Loans Construction Loans (Acc. Jan - Sep) NTD 2.3 Trillion YoY Growth 16.1% R (Acc. Jan - Sep) NTD 7.8 Trillion YoY Growth 7.7% Elevator Domestic Market Continues Demand Continues Growth Upwards Source: MOI Construction and Planning Agency, MOI Department of Statistics, Central Bank#22YUNGTAY ENGINEERING (1507.TT) INVESTOR PRESENTATION 2020 COMPANY OVERVIEW OPERATION REPORTS INDUSTRY & YUNGTAY OUTLOOK 22 Taiwan Market: Total Addressable Market Sales Unit YoY Growth Units 18.2% 15,000 12.1% 9,986 9,952 Growth 15.8% 20.0% 11,527 11,828 11,652 15.0% 11,010 10,396 10,578 10,240 10.0% 10,000 8,905 5.8% 2.6% 1.8% 7.5% 5.0% 0.0% 5,000 -0.3% -3.2% -5.0% -10.0% -12.1% 0 -15.0% 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020(F) Source: MOEA Industrial Statistics,, Company Estimations#23YUNGTAY ENGINEERING (1507.TT) INVESTOR PRESENTATION 2020 COMPANY OVERVIEW OPERATION REPORTS INDUSTRY & YUNGTAY OUTLOOK Taiwan Market: Yungtay's Market Share Total Market Yungtay: New Orders + Refurb Units 14,000 Yungtay: New Orders + Refurb Market Share Growth 50% 12,000 10,000 27.8% 8,000 24.0% 21.1% 6,000 4,000 2,000 LLLLLLL 40% 29.0% 30.3% 25.3% 25.2% 30% 20% 10% 0 0% 2014 2015 2016 2017 2018 2019 2020 01-08 Source: MOI Construction and Planning Agency, MOF Statistics, Company Estimations 23#24YUNGTAY ENGINEERING (1507.TT) INVESTOR PRESENTATION 2020 COMPANY OVERVIEW OPERATION REPORTS INDUSTRY & YUNGTAY OUTLOOK 24 China Real Estate Market Domestic Residential Domestic Real-Estate Investment (Acc. Jan - Sep) RMB10.35 Trillion YoY Growth 5.6% Investment (Acc. Jan - Sep) RMB 7.66 Trillion YoY Growth 6.1% New Construction Area - (Acc. Jan – Sep) 1.6 Billion m² YoY Decline 3.4% New Construction Area (Acc. Jan - Sep) 1.17 Billion m² YoY Decline 4.2% Sales Area (Acc. Jan - Sep) 1.17 Billion m² YoY Decline 1.8% Sales Area (Acc. Jan - Sep) 1.04 Billion m² YoY Decline 1.0% Inventory Area (Acc. Jan - Sep) 495.8 Million m² YoY Growth 0.5% Cumulative indicators continue to rise/decreases are narrowing R Purchasing demands gradually increase as pandemic abates Source: National Bureau of Statistics of China#25YUNGTAY ENGINEERING (1507.TT) INVESTOR PRESENTATION 2020 COMPANY OVERVIEW OPERATION REPORTS INDUSTRY & YUNGTAY OUTLOOK 25 China Elevator Market: Production Output ('000 units) 770 New Installations 90 Export 40 Modernization '000 Units 1,200 26% 1,000 800 35 Residential 30% 935 955 -25% 900 830 786 -20% 18% 760 716 16% 625 15% 600 15% 529 457 400 10% 200 6.2% 5.6% 3.4% 8.4% 5.6% 5% 2.0% 0% 0 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020F Units YoY Growth(%) Source: China Elevator Association#26YUNGTAY ENGINEERING (1507.TT) INVESTOR PRESENTATION 2020 COMPANY OVERVIEW OPERATION REPORTS INDUSTRY & YUNGTAY OUTLOOK Our Product Strategies: Epidemic Prevention, Smart (loT+Al) & Energy Saving PASS །། 能源效率等級 A A A B C D E G All-round Epidemic Prevention Elevator E PASS Smart Safety Elevator VDI 4707 EU Energy Saving 5A Certification 26#27YUNGTAY ENGINEERING (1507.TT) INVESTOR PRESENTATION 2020 COMPANY OVERVIEW OPERATION REPORTS INDUSTRY & YUNGTAY OUTLOOK 27 Epidemic Prevention Elevators All-round Epidemic Prevention Elevator Multiple sterilization technology Plasma ion air purifier Nano photo-catalyst air purifier UV germicidal lamp Non-contact elevator Non-contact Elevator Call Gesture Elevator Call Voice-activated Elevator Call Infrared light curtain#28YUNGTAY ENGINEERING (1507.TT) INVESTOR PRESENTATION 2020 COMPANY OVERVIEW OPERATION REPORTS INDUSTRY & YUNGTAY OUTLOOK 28 Smart (loT+Al) Elevators (1) E PASS Smart Safety Elevator 2 ENERGY EFFICIENCY & PREVENTIVE MAINTENANCE PASS 哈鸽 ARTIFICIAL INTELLIGENCE C 1+ SAFETY SECURITY#29YUNGTAY ENGINEERING (1507.TT) INVESTOR PRESENTATION 2020 COMPANY OVERVIEW OPERATION REPORTS INDUSTRY & YUNGTAY OUTLOOK 29 Smart (loT+Al) Elevators (2) E PASS Smart Safety Elevator - IoT Building Control Room Yungtay Elevator T Yungtay IOT Yungtay Command Center Yungtay Service Center Smart Monitoring Immediate Response#30YUNGTAY ENGINEERING (1507.TT) INVESTOR PRESENTATION 2020 COMPANY OVERVIEW OPERATION REPORTS INDUSTRY & YUNGTAY OUTLOOK Smart (loT+Al) Elevators (3) E PASS Smart Safety Elevator - Smart Al Targeted Elevator Call 49 Facial Recognition FT3X FT3X Group Control Voice-activated Elevator Call YUNGTAY AI Crowd Control "Mobile Elevator Call 30#31YUNGTAY ENGINEERING (1507.TT) INVESTOR PRESENTATION 2020 COMPANY OVERVIEW OPERATION REPORTS INDUSTRY & YUNGTAY OUTLOOK 31 Energy Saving Elevators VDI 4707 EU Energy Saving 5A Certification TÜV Yungtay products have passed the review of the world-renowned certification body (TÜV Rheinland), and the entire series of passenger elevators have obtained energy efficiency certification, highlighting Yungtay's elevators reaching advanced international standards in energy efficiency. 電梯能源效率標章 A 製造商: 永大機電工業股份有限公 能源效率等級 A 司 安裝位置: 桃園市桃園區春日路1352 電梯型號: St YHVF 電梯型式: 序號: 額定載重: 額定速度: 乘客用電梯 ET94D12 2000 kg 4.0 m/sec A B C E 每年運轉天數: 365 218 W 待機需求: (待機能量需求等級 D) 特定運行需求: F 0.333 mWh/(kg • m) G (運行能量需求等級 A) 依據 VDI 4707 使用類別 5 每年額定能量需求: 22,443 kWh 僅限相同使用類別時方能比較能源效率等級 日期: 2020年7月1日 : VDI 4707 Part 1 (20093) 標章編號:10220042 有效期限: 2023年6月30日 ■ High performance PM (permanent magnet) synchronous gearless traction machine ■Full series of LED lighting systems ■Intelligent floor indicating device. ■Green energy-saving energy feedback system#32Yungtay Engineering Co., Ltd. 11F., No.99, Fuxing N. Rd., Songshan Dist., Taipei City 105, Taiwan (R.O.C.) TEL: (02)-27172217 FAX: (02)-27186082 EMAIL: [email protected] Http://www.yungtay.com.tw THANK YOU 永大機電工業股份有限公司 YUNGTAY ENGINEERING CO., LTD.