Confidential

Business Review
September 2014
Eric Ming-Chih Chang
2014.09.25
Confidential
1
Global PCB Uptrend
Global PCB TAM
2013/11 forecast
2014/02 forecast
成長%幅度
2008
48,342
48,342
-
2009
41,226
41,226
-14.72%
2010
52,468
52,468
27.27%
2011
55,409
55,409
5.61%
2012
55,039
55,039
-0.67%
US$ M
2013
55,500
55,238
0.36%
2014
57,665
56,761
2.76%
2015
59,913
58,350
2.80%
2016
62,250
59,984
2.80%
Source : Prismark (2014/02)
2013年全球PCB市場TAM小增0.36%，Prismark預測未來5年全球PCB市場將保持溫和
約2.7-2.8%%年增長率，智慧型手機、平板電腦、雲計算、汽車電子等將為主要驅動
PCB需求的方向。
預估2014年全球經濟將較2013年溫和好轉。特別是「已開發國家」經濟表現轉佳。
Confidential
2
121017
Global Foot Print
USA
Headquarter
Finland
Shenzhen, Da-yuan
Yingkou
QHD
Japan
Beijing
Korea
1st.Huai an
2nd.Huai’an
Manufacturing sites
Yingkou, Qinhuangdao,
Huai’an (Campus I & II),
Shenzhen
Shanghai
R&D
Taoyuan
Da-yuan
SZ(Songgang)
Service centers
Da-yuan (Taiwan), Beijing,
Shanghai, Shenzhen, Japan,
Korea, USA, Finland.
Confidential
33
Holding Structure
Zhen Ding Technology Holding Limited
臻鼎科技控股股份有限公司 (Cayman)
Speedtech
Holdings Ltd.
(BVI)
Zhen Ding
Technology
Co., Ltd.
(ROC)
IRIS World
FAT
Enterprises Ltd. Holdings Ltd.
(BVI)
(Cayman)
Monterey Park Finance Ltd.
(BVI)
Light Flash
International Ltd.
(BVI)
Fu Bo Industrial
(Shenzhen) Ltd.
(PRC)(2)
Forever Growth
Investment Ltd.
(Bahamas)
FuKui Precision
Component
(Shenzhen) Ltd.
(PRC)
(1) Except as otherwise disclosed, each parent company
owns 100% equity of its subsidiaries.
(2) Acquired on April 1, 2014.
(3) Set up on June 23, 2014
Confidential
Coppertone
Enterprises Ltd.
(BVI)
Hong Heng Sheng
Electronic
Technology
(Huaian) Co., Ltd
(PRC)
Pacific Fair
International Ltd.
(HK)
Qing Ding
Precision
Electronics
(Huaian) Co., Ltd
(PRC)(3)
Pacific Stand
Enterprises Ltd.
(HK)
Yu Ding
Precision
Electronics
(Huaian) Co., Ltd
(PRC)(3)
Mayco
Industrial Ltd.
(HK)
Hong Qi Sheng Hong Qun Sheng
Precision
Precision
Electronics
Electronics
(Yingkuo)
(Qinhuangdao)
Co., Ltd
Co., Ltd
(PRC)
(PRC)
New Creation
Electronics
(Huaian) Ltd.
(PRC)
4
Capital Formation
Date
Capital raising events
June, 2006
Initial paid in capital of US$70mn (US$1.0 par value)
October, 2007
1st New shares offering of 92.5mn shares (Par value of US$1.0).
Total paid-in capital reached US$162.5mn.
October, 2009
2nd New shares offering of 39.5mn new shares with US$1 par. Paid-in
capital increased to US$202mn or NT$6,464M. (646,400,000 shares at
par NT$10)
December 26, 2011
IPO with new shares offering of 23,529,000 shares (NT$10 par) Total
outstanding shares increased to 669,929,000 shares or Paid in capital
of NT$6,699.29M
June 12, 2012
Issued US$188M Zero Coupon Convertible Bonds due 2015.
September 20, 2012
Distribute 33,496,450 shares stock dividends and NT$1.0 cash
dividends per share. Paid-in capital increase to NT$7,034,254,500
Distribute 35,171,273 shares stock dividends and NT$2.0 cash
dividends per share. Paid-in capital increase to NT$7,385,967,225
September 05, 2013
June 26, 2014
Confidential
Issued US$300M Zero Coupon Convertible Bonds due 2018.
Paid-in capital increase to NT$7,386,310,650 due to ECB conversion.
55
ESI & Process Innovation-Key to FPC Competitiveness
The longer installation period, higher customization and process innovation in FPC make it more
centralized than R-PCB.
ESI decides the order for new models. Shorter ramp-up period decides profit.
Smart Connected Device Trend
Product Design
& Co-Creation
ESI：2-3 months
 Provide customers with minimal
space constraints to fabricate
ideal solution satisfying electronic products more lighter,
thinner, shorter and smaller
New Product Development (NPD)
Prototype
Pre-MP
(Pre-Production)
 Ability to shorten the development cycle of new products
 Steps to develop new products
in order to function as the center
 High Volume ramp up
 Flexibility to support demand
Innovation Rate
Early Supplier Involvement (ESI)
Now
Stage
Process
Innovation
Product
Innovation
NPD：4-6 months
Mass Production (MS)
Mass Production
MS：12 months
Confidential
 Cost-effectiveness ratio &
Reliable Replication for High
Volume Production
Early
Adoption
Growth
Maturity
Decline
Stages of Product Life Cycles
6
Revenue Growth for the Past 12 Years
US$ M
1H14
15.58% 25.3%
24.29%
33.45%
58.71%
29.45%
25.00%
49.32% 0.23%
55.56%200.00%
US$ M
2002 2003 2004 2005 2006 2007 2008 2009 2010
88
63
98 294 439 440 550 712 1,130
Confidential
2011
1,508
2012
1,874
2013
2,166
7
1H14 Global PCB Ranking -- 2nd
Ranking
更新日期: 2014/8/8
US$ M
1H14
Rank
1
旗勝 /紫翔
2
臻鼎
3
欣興
4
永豐集團
5
三星電機
6
健鼎
7
揖斐電
8
迅達
9
大德集團
10
南亞電路板
11
惠亞
12
華通
13
住友電工
14
瀚宇博德
15
建滔集團
16
景碩
17
樂金伊諾特
18
名幸
19
奧特斯
20
志超
Top-20 total
Company
Nippon Mektron (NOK)
ZDT
Unimicron
Young Poong Group
SEMCO (Samsung)
Tripod
Ibiden
TTM
Daeduck Group
Nanya PCB
Viasystems
Compeq
Sumitomo
HannStar Board
King Board Group
kinsus
LG Innotek
Meiko
AT&S
tpt
ZDT Ranking
ZDT Market Share
Confidential
Source: NT Information, Prismark, Company data(2014/08)
Country
Japan
Taiwan
Taiwan
Korea
Korea
Taiwan
Japan
USA
Korea
Taiwan
USA
Taiwan
Japan
Taiwan
HK
Taiwan
Korea
Japan
Austria
Taiwan
1H14
1H13
1,304
1,018
947
760
666
658
590
574
516
491
484
471
461
416
410
401
384
378
10,929
1,228
835
1,002
957
871
680
733
663
654
481
482
458
547
449
442
376
369
354
367
332
12,280
1H14/
1H13
6.14%
21.96%
-5.56%
-12.75%
-1.98%
-10.20%
-11.14%
19.40%
7.03%
7.31%
-11.48%
5.04%
4.34%
10.63%
11.08%
13.18%
4.65%
13.92%
-
2013
2012
2011
2,529
2,166
2,013
2,082
1,760
1,370
1,567
1,368
1,235
1,087
996
1,038
1,317
973
923
776
766
764
780
703
26,214
2,606
1,874
2,279
1,737
1,866
1,321
2,095
1,349
1,152
1,004
967
906
1,185
1,156
935
744
689
694
705
745
26,007
2,248
1,508
2,252
1,226
1,446
1,388
2,124
1,428
1,047
1,316
866
810
871
1,282
1,043
772
625
725
688
567
24,232
2
4
4
3.92% 3.40% 2.72%
8
OPM Comparisons -- FPC
Weak JP￥ -- Not a key factor to OPM
JP￥ v .s. NT$
Operating Profit Margin by Quarters -- FPC
NTD/USD
JPY/USD
2010
31.64
87.78
2011
29.46
79.81
2012
29.61
79.79
1Q13
29.55
92.36
2Q13
29.95
98.77
3Q13
29.95
98.97
4Q13
29.63
100.37
2013
29.77
97.53
1Q14
30.363
102.79
2Q14
30.163
102.13
1Q14
2Q14
Operating Profit Margins by Quarters – Major FPC Firms
2010
2011
2012
Mektron
5.39%
2.03%
0.78%
Sumitomo
4.49%
1.40%
1.47%
Fujikura
-
-
-
1Q13
2Q13
3Q13
4Q13
2013
4.87%
-4.86%
-4.14%
3.68%
0.40%
5.92%
3.76%
-2.18%
0.11%
2.85%
4.80%
1.71%
-0.64%
-1.85%
-17.01%
-9.21%
0.00%
-2.19%
-6.06%
-5.28%
0.00%
-4.27%
-5.74%
0.01%
-14.52%
-39.98%
-40.12%
-19.88%
Interflex
7.33%
7.80%
6.08%
8.44%
1.05%
M-Flex
4.94%
5.12%
3.23% -15.16% -23.29%
-9.73%
-3.88% -11.91%
ZDT＊
2.61%
5.75%
9.63%
7.43%
7.98%
10.08%
11.28%
9.59%
7.23%
6.53%
Career
12.32%
12.10%
8.10%
1.21%
0.34%
6.92%
10.82%
5.86%
0.45%
0.41%
Flexium
13.95%
17.08%
18.13%
15.33%
11.02%
17.52%
14.75%
15.06%
2.13%
9.11%
Source：Public information
1 ZDT’s OPM is consolidated OPM of the Company
Confidential
9
Record Month : Nov. 2013 — Driven by FPC
2011-2013 Monthly Revenues
NT$ M
NT$7,784M
Historical High
NT$6,566M
1Sales
NT$ 6,410M
of Yantai plant hasn’t been accrued since Apr. 2012 Monthly sales around NT$ 300 M.
Confidential
10
Similar Monthly Growth Pattern on 2014
2013-2014 Monthly Revenues
Historical High
NT$7,784M
2014H1 Revenue
NT$30.73 billion
NT$6,182M
5,000
NT$ M
NT$5,239M
NT$4,939M NT$5,296M
NT$5,475M
NT$5,416M
NT$3,657M
2014 Jan.-Aug.
Revenue up
20.3% YoY
 For the first half of 2014, company’s revenue surged up by 25.3% , 2Q14 remain strong
growth with QoQ 7.9% and YoY 28.6%. (revenue of 2Q13 was NT$ 12,401M)
 The 4th Quarter is always peak season for the Company, and we expect there will be
another record months of the Company in Q4.
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11
1H14 – The Best 1H Ever
NT$ M
Q1
Confidential
Q2
Q3
Q4
Total
2010
91
73
236
311
711
2011
227
513
789
827
2,356
2012＊
946
910
793
1,407
4,056
2013＊
1,048
817
1,436
2,170
5,471
2014＊
911
984
「＊」: IFRS會計準則
NT$ M
1,895
12
Increased Number of Employees for strong FPC demand
單位：人
1員工人數均以期初和期末平均在職員工數計算
員工數YoY
營收YoY
Confidential
2006
91.2%
70.0%
2007
47.7%
-12.1%
2008
30.8%
19.4%
2009
6.7%
36.6%
2010
26.7%
50.9%
2011
0.2%
27.6%
2012
10.2%
25.0%
2013
9.0%
16.0%
1H14
24.5%
25.3%
13
ECB Terms & Conditions
Issuer
Zhen Ding Technology Holding
Zhen Ding Technology Holding
US$150mm + US$38mm upsize
US$250mm + US$50mm upsize
Ranking
Senior
Senior
Currency
USD
USD
Maturity
3 years
5 years
Issue Price
100%
100%
Coupon
Zero
Zero
Yield to Put / Maturity
1.50%
0.125%
Conversion Premium
10.40%
15.02%
NT$99.00
NT$108.00
Issue Size
Conversion Price
Issuer Call Option
Investor Put Option
勝
勝
勝
勝
Non-callable for the first 3 years, thereafter callable subject to Non-callable for the first 3 years, thereafter callable subject to
a 125% hurdle
a 125% hurdle
At the end of year 3 @ 100%
At the end of year 3 @ 100%
100%
100%
[Title]
[Title]
Redemption Price
勝
Assumptions
Reference Price:
NT$73.90, as of close of March 21, 2014
Benchmark Swap Rates: USD 3 year 0.828%, 5 year 1.638%
____________________
Subject to market conditions, interest rate and volatility at the time of launch
Assume sufficient available at L+225bps or lower
Confidential
9
14
Share Price Performance Since IPO
AAPL, ZDT, Hon Hai --- High Co-relation on Stock Movements
(US$)
(NT$)
2012.09 AAPL
historical stock
price of US$704
1:7 split= US$ 100.5
2012.05.31 MSCI
rerate ZDT from
0.12% to 0.2%
108
104.51
99
92
86
83.4
2012.05.17 as
MSCI Index
stocks
2011.12.26
IPO
NT$52
2014.03.26 -Announce
2013 full year
financial results
2014.06.18
ECB Pricing
at NT$ 93.9
2014/8/29
83.427
Confidential
104.51
ECB Conversion Price
Dividends included
+74.54%
+93.38%
+59.13%
15
Zhen Ding Technology Holding Limited
Consolidated Financial Results
2nd-Quarter, 2014
Confidential
16
Disclosure Disclaimer
The information is provided for informational purposes only, and "forward-looking
statements" are based on our own current available global economic conditions, industry
supply-demand and underlying assumptions. Our actual statements may differ materially
from "forward-looking statements" for a variety of economic or financial factors. ZDT
does not assure the accuracy, reliability or completeness of "forward-looking statements."
Investors should not place undue reliance on them.
The financial statements are intended only to present the financial position in accordance
with accounting principles and practices generally accepted in the Republic of China and
not those of any other jurisdictions.
For the convenience of readers, the statements have been translated into English from the
original Chinese version prepared and used in the Republic of China. If there is any
conflict between the English version and the original Chinese version or any difference in
the interpretation of the two versions, the Chinese-language consolidated financial
statements shall prevail.
Confidential
17
Consolidated Income Statement (YoY)
NT Million
Revenue
Cost
2014
Jan~Jun
%
2013
Jan~Jun
%
YoY
2013
Jan~Dec
%
30,788
25,954
100%
84%
24,688
20,198
100%
82%
25%
28%
64,483
52,589
100%
81%
Gross Profit
Operating Expense
4,834
2,721
16%
9%
4,490
2,588
18%
10%
8%
5%
11,894
5,708
19%
9%
Operating Income
Non-operating Income
2,113
(22)
7%
-
1,902
(24)
8%
-
11%
6,186
(116)
10%
-
Income Before Tax
Income Tax
2,091
7%
1,878
8%
11%
6,070
10%
196
1%
14
-
Net Income
1,895
6%
1,864
8%
Confidential
2%
599
1%
5,471
9%
18
Consolidated Income Statement (QoQ)
NT Million
Revenue
Cost
2014
Apr~Jun
%
2014
Jan~Mar
%
QoQ
15,942
13,486
100%
85%
14,846
12,468
100%
84%
7%
8%
Gross Profit
Operating Expense
2,456
1,415
15%
9%
2,378
1,305
16%
9%
3%
8%
Operating Income
Non-operating Income
1,041
7
6%
-
1,073
(30)
7%
-
-3%
Income Before Tax
Income Tax
1,048
6%
1,043
7%
64
-
132
1%
984
6%
911
6%
Net Income
Confidential
-
8%
19
Consolidated Income Statement (QoQ)
NT Million
Revenue
Cost
2014
Jan~Jun
%
2014
Jan~Mar
%
30,788
25,954
100%
84%
14,846
12,468
100%
84%
Gross Profit
Operating Expense
4,834
2,721
16%
9%
2,378
1,305
16%
9%
Operating Income
Non-operating Income
2,113
(22)
7%
-
1,073
(30)
7%
-
Income Before Tax
Income Tax
2,091
7%
1,043
7%
196
1%
132
1%
Net Income
1,895
6%
911
6%
Confidential
20
Consolidated Revenue Trend
22,800
22%
18%
20,000
19%
19%
18%
18%
17,488
Revenue
19%
18%
17%
16%
16,995
15%
15,942
13%
14,846
15,000
13,126
13,328
12,417
12,321
12,136
12,367
8%
10,000
3%
5,000
-2%
11Q4
NT Million
Revenue
Gross Margin
GM %
Confidential
12Q1
11Q4
13,126
2,507
19%
12Q2
12Q1
12,417
2,154
17%
12Q3
12Q2
12,136
2,184
18%
12Q4
12Q3
13,328
2,510
19%
13Q1
12Q4
17,488
3,927
22%
13Q2
13Q1
12,321
2,309
19%
13Q3
13Q2
12,367
2,181
18%
13Q4
13Q3
16,995
3,028
18%
14Q1
13Q4
22,800
4,376
19%
14Q2
14Q1
14,846
2,378
16%
14Q2
15,942
2,456
15%
21
Gross Margin %
19%
23%
Consolidated Gross Margin Trend
22%
Gross Margin
4,000
19%
3,927
19%
18%
17%
20%
19%
18%
16%
15% 15%
3,028
3,000
2,510
2,507
2,309
2,154
2,378
2,456
10%
2,181
Gross Margin %
19%
4,376
2,000
5%
1,000
0%
11Q4
NT Million
Revenue
Gross Margin
GM %
Confidential
12Q1
11Q4
13,126
2,507
19%
12Q3
12Q1
12,417
2,154
17%
12Q4
12Q2
12,136
2,184
18%
13Q1
12Q3
13,328
2,510
19%
13Q2
12Q4
17,488
3,927
22%
13Q3
13Q1
12,321
2,309
19%
13Q4
13Q2
12,367
2,181
18%
14Q1
13Q3
16,995
3,028
18%
14Q2
13Q4
22,800
4,376
19%
14Q1
14,846
2,378
16%
14Q2
15,942
2,456
15%
22
Consolidated Balance Sheet (YoY)
NT Million
Cash and Cash Equivalents
Receivables
Inventories
Other Current Assets
Total Current Assets
Investments
Property, Plant and Equipment
Other Assets
Total Non-current Assets
TOTAL ASSETS
2014/06/30
18,843
17,401
4,755
828
41,827
131
28,234
1,611
29,976
71,803
%
26%
24%
7%
1%
58%
40%
2%
42%
100%
2013/06/30
9,278
13,081
4,051
807
27,217
569
27,692
2,742
31,003
58,220
%
16%
23%
7%
1%
47%
1%
48%
4%
53%
100%
2013/12/31
10,016
24,795
4,867
717
40,395
514
27,843
2,800
31,157
71,552
%
14%
34%
7%
1%
56%
1%
39%
4%
44%
100%
Short-term Loans
Payables
Other Current Liabilities
Total Current Liabilities
Long-term Loans
Bonds
Other Liabilities
Total Non-current Liabilities
TOTAL LIABILITIES
11,886
18,982
75
30,943
7,158
8,037
35
15,230
46,173
17%
26%
43%
10%
11%
21%
64%
10,556
14,542
205
25,303
4,298
5,687
1,148
11,133
36,436
18%
26%
44%
7%
10%
2%
19%
63%
10,112
20,981
146
31,239
7,769
5,706
1,124
14,599
45,838
14%
30%
44%
11%
8%
1%
20%
64%
TOTAL EQUITIES
25,630
36%
21,784
37%
25,714
36%
Confidential
23
Consolidated Balance Sheet (QoQ)
NT Million
Cash and Cash Equivalents
Receivables
Inventories
Other Current Assets
Total Current Assets
Investments
Property, Plant and Equipment
Other Assets
Total Non-current Assets
TOTAL ASSETS
2014/06/30
18,843
17,401
4,755
828
41,827
131
28,234
1,611
29,976
71,803
%
26%
24%
7%
1%
58%
40%
2%
42%
100%
2014/03/31
13,766
17,686
4,023
831
36,306
114
28,047
1,411
29,572
65,878
%
21%
27%
6%
1%
55%
43%
2%
45%
100%
2013/12/31
10,016
24,795
4,867
717
40,395
514
27,843
2,800
31,157
71,552
%
14%
34%
7%
1%
56%
1%
39%
4%
44%
100%
Short-term Loans
Payables
Other Current Liabilities
Total Current Liabilities
Long-term Loans
Bonds
Other Liabilities
Total Non-current Liabilities
TOTAL LIABILITIES
11,886
18,982
75
30,943
7,158
8,037
35
15,230
46,173
17%
26%
43%
10%
11%
21%
64%
6,972
15,665
1,230
23,867
9,733
5,860
37
15,630
39,497
11%
23%
2%
36%
15%
9%
24%
60%
10,112
20,981
146
31,239
7,769
5,706
1,124
14,599
45,838
14%
30%
44%
11%
8%
1%
20%
64%
TOTAL EQUITIES
25,630
36%
26,381
40%
25,714
36%
Confidential
24
Consolidated Cash Flow (YoY)
NT Million
Operating Cashflows
Investing Cashflows
Financing Cashflows
Foreign Exchange Effect
Net Cashflows
Confidential
2014
Jan~Jun
6,428
(1,584)
4,174
(191)
8,827
2013
2013
Jan~Jun
Jan~Dec
4,724
6,074
(1,338)
(3,469)
(3,013)
(1,586)
148
241
521
1,260
25
Consolidated Cash Flow (QoQ)
NT Million
Operating Cashflows
Investing Cashflows
Financing Cashflows
Foreign Exchange Effect
Net Cashflows
Confidential
2014
2014
2013
Apr~Jun
Jan~Mar Oct~Dec
559
5,869
985
(986)
(598)
(340)
5,707
(1,533)
670
(205)
14
120
5,075
3,752
1,435
26
Consolidated Cash Flow (QoQ)
NT Million
Operating Cashflows
Investing Cashflows
Financing Cashflows
Foreign Exchange Effect
Net Cashflows
Confidential
2014
2014
2013
Jan~Jun
Jan~Mar Jan~Dec
6,428
5,869
6,074
(1,584)
(598)
(3,469)
4,174
(1,533)
(1,586)
(191)
14
241
8,827
3,752
1,260
27
Thank you
Confidential
28

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