Enterex International Limited (Stock Code：1592.TW) 1Q16 IR Report 0 Agenda Company Profile Business Condition Strategy and Layout 1 Company Profile Introduction Holding Structure Worldwide Organizations 2 Introduction Stock Code： F-Enterex 1592.TW Milestone： 1996–Established in Yangzhou city, Jiangsu, China 2014–Listed on October 16th in Taiwan Stock Exchange Capital： NT$1,004,332,500 (100.4mn stocks;NT$10/per share) Manufacture Plant： Yangzhou plant( approximately 190,000 square meter) Cambodia plant(approximately 120,000 square meter ) Number of Employees： 1,580 Business：RD, manufacturing and sales of car radiator, heavy duty radiator and condenser Management Team： President and General Manager – Wen-Chung, Wong China& Cambodia Subsidiary Company GM– Toshimasa Yamane USA Subsidiary Company General Manager– Kevin O'Connor 3 Holding Structure Enterex International Limited (Cayman) Capital USD 31,938,210 (NTD 1,004,332,500 ) 100% FRUITAGE INTERNATIONAL CO.,LTD (Belize) Capital USD 31,938,210 100% 100% 100% 99% 100% MERIT WISE INTERNATIONAL LIMITED (HK) ENTEREX AUTOMOTIVE FRUITAGE ENTEREX Capital USD 55,500,000 AMERICA PARTS INTERNATIO (CAMBODIA) LLC (USA) DISTRIBUTION NAL CO.,LTD INDUSTRY INTERNATION TAIWAN CO. LTD AL, LLC(USA) BRANCH 100% 100% 100% Capital Working USD1,966,344 Capital Capital Capital YANGZHOU YANGZHOU ENTEREX YANGZHOU ENTEREX NTD ENTEREX AUTO PARTS AUTOMOTIVE AIR- USD10,000,000 INDUSTRIAL CO., MANUFACTURING CONDITIONING 30,000,000 CO.,LTD LTD INDUSTRIAL CO., LTD Capital Capital USD9,000,000 Capital USD19,700,000 USD23,800,000 4 Worldwide Organizations Design Center- Connecticut Manufacturing- Yangzhou Distribution Headquarter- Center- Texas Taiwan Manufacturing - Sihanoukville Sales flow Transaction mode Subsidiaries 5 Factory Image in Yangzhou Area of land : 194,932.5 Square meter 6 Factory Image in Cambodia Area of land : 120,000 Square meter 7 Selling Center in North America Area of land: Approximately 350,000 square feet Distribution Center - Arlington, Texas 8 Business Condition 1Q16 Consolidated P&L Sales Analysis Top 5 Customers 9 2015 Profit & Loss NT$,000 2014 2015 1Q15 1Q16 Account Amount % Amount % YoY % Amount % Amount % YoY % Total 4,798,743 100.0% 5,186,008 100.0% 8.1% 1,316,321 100.0% 1,524,337 100.0% 15.8% Revenue COGS 3,347,036 69.7% 3,508,490 67.7% 4.8% 892,918 67.8% 1,009,479 66.2% 13.1% Gross Profit 1,451,707 30.3% 1,677,518 32.3% 15.6% 423,403 32.2% 514,858 33.8% 21.6% Operating 1,119,604 23.3% 1,337,132 25.8% 19.4% 335,231 25.5% 335,733 22.0% 0.1% Exp. Operating 327,706 6.8% 340,381 6.6% 3.9% 88,172 6.7% 179,125 11.8% 103.2% Profit Other revenue (75,947) -1.6% (44,102) -0.9% -41.9% (10,175) -0.8% (23,154) -1.5% 127.6% and exp. Profit 251,759 5.2% 296,279 5.7% 17.7% 77,997 5.9% 155,971 10.2% 100.0% Before Tax Tax Exp. 83,829 1.7% 104,992 2.0% 25.2% 30,083 2.3% 34,374 2.3% 14.3% Profit After 167,930 3.5% 191,287 3.7% 13.9% 47,914 3.6% 121,597 8.0% 153.8% Tax EPS (NT$) 1.83 1.91 4.4% 0.48 1.23 156.3% 10 Sales Performance by Quarters Unit：NT$,000 sales 1Q 2Q 3Q 4Q YTD Year 2013 1,107,301 1,011,401 1,125,632 1,064,223 4,308,557 2014 1,225,609 1,346,186 1,132,767 1,094,181 4,798,743 2015 1,316,321 1,268,332 1,343,497 1,257,858 5,186,008 2016 1,524,337 1,524,337 11 Sales Contribution by Region 2014 2015 1Q15 1Q16 NT$,000 Amount % Amount % Amount % Amount % America 4,170,435 87 4,406,193 85 1,138,123 86 1,227,583 80 Europe 311,787 6 302,280 6 95,150 7 100,266 7 China 104,583 2 255,611 5 31,917 2 156,471 10 Asia(except China) 38,356 1 50,440 1 9,785 1 10,326 1 Others 173,582 4 171,484 3 41,347 3 29,691 2 Total sales 4,798,743 100 5,186,008 100 1,316,322 100 1,524,337 100 12 Sales Contribution by Product 2014 2015 1Q15 1Q16 NT$,000 Amount % Amount % Amount % Amount % Car Radiator 4,023,296 84 4,291,919 83 1,081,606 82 1,203,106 79 Heavy Duty 211,897 4 168,588 3 50,432 4 31,477 2 Radiator Condenser 330,124 7 364,065 7 95,966 7 132,906 9 Others 233,426 5 361,436 7 88,319 7 156,848 10 Total sales 4,798,743 100 5,186,008 100 1,316,322 100 1,524,337 100 13 Top 5 Customers S t a b l e C u s t o m e r Partnership 2015 % 1Q16% Name of Sales of Sales Summary Advance Auto Listing in NYSE from 2001 Parts Top 1 auto parts chain store in NA, included Advance Auto Parts(AAP)、Auto-part International(AI)、B.W.P Distributors 32% 34% Inc.(BWP) and General Parts International(GPI)) DIY and DIFM customers oriented 5,293 stores worldwide and continue to open 65-75 stores in 2016 O’Reilly/Ozark Listing in NASDAQ from 1993 21% 16% Top 3 auto parts chain store in NA, with 4,571 stores DIY customers oriented Spectra Located in Montreal Canada Own manufacturing plants in Canada Premium (SPI) 9% 10% Distributor in North America(the main customer is AutoZone, the top 2 auto parts retailer 1-800 Located in California US. Chain store of cooling system 7% 7% RADIATOR Chain stores in US and Canada, with more than 1000 stores NRF Established in 1927 and the top2 channel brand in Europe has manufacturing background and the main production and - 3% development base in Western Europe Parent company is BANCO Holdings in India and listed in NSE 14 Main Customers Summary 5,293 stores worldwide in 2015 and continue to implement Carquest integration 4,571 stores worldwide in 2015 and continue to expand in order to split the market share Source: Advance Auto Parts & O’Reilly Presentation 15 Competitive Niche TOP 1 Market Share in North America Competitive Advantage 16 AM Car Radiator Sales in North America Unit: Piece(thousand) 2013 2014 2015 AM Car Radiator volume in NA 7,723 7,963 8,228 Enterex Volume in NA 1,954 2,108 2,077 Market Share 25% 26% 25% Ref：Automotive radiators-A global strategic business report 17 Competitive Advantage • From product design to tooling's development and production, Enterex offers one stop One-Stop Production solution with cost reduction and vertical integration. • Set up R&D team both in China and in US to R & D Team meet the requirement from customers for developing and adjusting products they need. Completed • Build entry barrier by offering more than 2000 Production lines radiator numbers and 600 condenser numbers. Exclusive • Set up NA distribution channel to establish long Distribution in NA -term and stable relationship with customers. 18 Strategy and Layout- Growth and Risk diversification Develop China OE Market Japan Experts Team Management Cambodia Plant European AM Market Layout 19 Strategy and Layout: China OE Market(1/3) • Enter into small independent First brand market Stage • Develop big independent brand Second market Stage • Cooperate with joint venture Third brands Stage 20 Strategy and Layout: Multi brands and Multi items(2/3) • Kubota • Jiangling Motor • Tailift Group • HOWO • Anhui Jianghuai-Yinlian • Nanjing Yuhua Heavy Duty • Dailian Huanghai • Kion Baoli Electric • Nanjing King Long • Foton Lovol HEAVY - • Baic Motor Foton • XGMA Vehicle DUTY • CRRC Times ELEC • WORLD GROUP Cooling • DONG FENG Bus Co. • LONKING RADIATOR System • YANGTSE • KOBELCO • MEIHUA Bus • HANGCHA • ZOOMLIAN Car Radiator • Baic Motor • Chery Motor • Hunan Changfeng Motor • Casonic Air-Conditioning • Joylong Motor • Dandong Huanghai Motor • JAC Motor • Youngman Motor • Brilliance Auto • GAC GONOW • Nanjing King Long 21 Strategy and Layout: Develop China OE Market (3/3) Cooperate Items with Beijing Automotive Group Co., Ltd. 22 Strategy and Layout: Japanese Team Japanese Professional Manufacturing team Technical and process Innovation improvement and R&D Technique level up Lower cost Higher Efficiency 23 Introduction of Japanese Experts Shinichi Toshimasa Susumu Yamamoto Yamane Hongo Highest level of education : Tokyo Highest level of education : Highest level of education: City University - Mechanical ENG. Shibaura Institute of technology Nihon University, Faculty of Experience : Experience: Engineering, Electro- •Tokiwado factory director •Production Engineering Center – SVP Engineering. •CKF Director, GM •CPM: Interior Business Unit Experience: •CK Productivity Center VP & GP – Business unit Leader •Tokiwado -Factory director Nishin Kogyo Co., Ltd Non-Exclusive •Calsonic Kansei North America Inc. •CKP-Managing Director Director, VP & OP factory director –Executive VP •CKP-President 24 Strategy and Layout: Cambodia Plant(1/3) Investment Summary Board meeting approved Cambodia investment plan on 03/27/2015 Location：Cambodia Sihanoukville Special Economy Zone Land：120,000 square meters Plant : 90,000 square meters Capital：USD20,000,000 Product：Brazed radiator、 Mechanical Bonded radiator、 Condenser、Intercooler Current Progress 25 Strategy and Layout: Cambodia Plant(2/3) •Sihanoukville is a coastal city located in the southwest of Cambodia and very close to the Gulf of Thailand. Location •The only one port city in Cambodia and is 240 km to Phnom-Penh •An emerging industrial city •Political and economic conditions are more stable than other countries in South East Asia. •Labor cost is much lower than that in China Advantage •Duty free to Europe and America •There is no foreign exchange control •Enjoy a period of 6 to 9 years income tax exemption 26 Strategy and Layout: Cambodia Plant(3/3) E s t i m a t e F u t u r e Consolidated C a p a c i t y Enterex Group Capacity Other companies China Cambodia plant Total plant Product Lines First Stage Second Stage SPI：800,000 Capacity Capacity Capacity Total Capacity pcs (pcs) (pcs) (pcs) KOYO: Brazed 3,500,000 500,000 1,000,000 4,500,000 700,000 radiator ~800,000 pcs Mechanical Bonded 500,000 1,000,000 1,000,000 radiator TOYO： Heavy Duty 25,000 25,000