3689 UDE

Gary Chen

Oct 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, revision and further amendment.

• While the information contained herein has been prepared in good faith, neither the Company nor any of its shareholders, directors, officers, agents, 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 disclaimed. Accordingly, neither the Company nor any of its shareholders, directors, officers, agents, employees or advisers takes any responsibility for, or will 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.

• Neither the issue of this Presentation nor any part of its contents is to be taken as any form of commitment on the part of the Company to proceed with any 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.

• This Presentation should not be considered as the giving of investment advice by the Company or any of its shareholders, directors, officers, agents, 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.

• This Presentation includes certain statements that may be deemed “forward-looking statements”. All statements in this discussion, other than statements of 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.

World No. 2 in RJ-45 Port Revenues

Founded in 2005

Ticker: 3689 TT

4,100 Full Time Employees

Dedicated Mfg of Integrated RJ-45 Ports

2012 Revenue of NT$3.9Bn

Headquarters: Taoyuan, Taiwan

Deyang, Sichuan, China Plant: High Volume Mass Production

Donguan, Guangzhou, China Plant: 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.

• We are a Global Leader in Ethernet Technology Applications.

• We are the rare manufacturer that is able to combine automated volume production capability with a high degree of product customization.

• To maintain our cost leadership, we tirelessly re-engineer our management and production methods.

• We aim to produce superior returns for our investors. Over the past three years, net margin has exceeded 10% and ROE 25%.

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Executive Summary

The UDE Way

5

The UDE Way

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Soft Power

UDPS Lean Production System

Production Line Automation

Strict Cost Management

UDE Soft Power: Create, Destroy, Recreate

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• It extends from Chairman to CEO to Plant Manager to Line Operator.

• We create it from the bottom up, with comprehensive training for each new employee.

• All employees are assigned to a specific production group.

• Each group is encouraged to innovate and improve upon current production techniques.

• With each new sunrise, the previous day’s production methods are considered obsolete.

Representative Principles of Soft Power

Creative Destruction

Overthrow the traditional principles of production

Do not be satisfied with the status quo

Training for employees in UDPS methods in Japan and Taiwan

Work groups are promoted as a team

Production requirements double with each promotion

Production lines to eventually have only technicians, no operators

Work Smart

Discourage frequent overtime

Show concern for staff contentment on the job

Emphasize teamwork, communication and efficiency

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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

The Fruits of UDPS + Automation

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Growth in number of operators Growth in unit production

0 34

408 483

662

19%

28% 27% 26% 27%

19%

26%

13% 12% 10%

0%

5%

10%

15%

20%

25%

30%

35%

0

200

400

600

800

1,000

2008 2009 2010 2011 2012

More efficient production and higher profitability

NT$ million

Assembly－TPS implementation ~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

Experienced and Stable Int’l Mgmt Team

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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UDE is a rarity – a high volume, low cost leader that also offers a highly customized product

Product Offering

Customer Base

Wide range of electrical characteristics and structural options Highly customized with low volume production run capability 8,100 active part numbers 4,500 different models produced each month

Low single client risk : 60% of sales from top ten clients No client accounts for more than 15% of sales, only one client accounts for more

than 10%. 730 active client accounts.

Industry Attributes

Barriers to entry are high RJ45 Jack industry has only a handful of major players These are UDE, Foxconn, Bel Fuse, Molex and Pulse Bel Fuse has the most advanced technology UDE is the largest scale producer and the low-cost leader

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High Entry Barriers for Conventional Connector Producers

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

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

UDE Possesses Excellent Electromagnetic Signal Processing and Customization Capability

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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The Most Diverse Application Base of Any RJ45 Producer

Motherboard / AIO PC Networking Set-Top BOX Server Blu-ray Player

/ Internet TV Printer

√ √ √ √ √ √

√ √ √

√ √

√ √

√ √

√ √

√ √ √ √

√ √ √

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Selling to global leaders in key product categories

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The UDE Way

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UDE’s Revenue and Market Share Targets

19

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

New Worlds to Conquer…

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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 sizeMarket Share (%, RHS)⌇⌇

The UDE Way

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0

500

1000

1500

2000

2500

3000

3500

4000

2009 2010 2011 2012

PC Networking Consumer

Networking Revenues are Driving Revenue Growth

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

2009 2010 2011 2012

PC Networking ConsumerNTD m

22

23

Forecasting Many a Cloudy Day

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Let it Rain

Enabling factors in the growth of the Cloud

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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

2,308

2008 2009 2010 2011 2012 1H13

125

268

472 454

528

352

2008 2009 2010 2011 2012 1H13

8.0%

13.4% 15.2%

13.0% 13.6% 15.3%

19.2%

27.8% 26.5% 25.5%

27.4% 27.9%

Revenues NTD$ million

Gross Margin %

Operating Profit NTD$ million

Operating Margin %

Five-year Revenues and Operating Profit

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118 84

341 353

443

271

2008 2009 2010 2011 2012 1H13

2.55 1.65

6.45 6.08 7.08

4.03

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 %

Five-year Financial Highlights

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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 1H13

Sales Revenue 1,567 1,993 3,094 3,486 3,876 2,308

Gross Profit 301 553 820 890 1,063 644

OP Profit 125 268 472 454 528 352

Income before tax 142 130 409 481 539 349

Net Income 118 84 341 353 443 271

EPS(NTD$) 2.55 1.65 6.45 6.08 7.08 4.03

Five-year P&L (Consolidated)

NTD$ million YOY (%)

2008 2009 2010 2011 2012 1H13

47.3 27.2 55.2 12.7 11.2 26.5

225.3 84.0 48.3 8.5 19.5 29.0

129.8 114.0 76.1 -3.8 16.3 57.9

187.3 -9.0 215.4 17.7 12.0 49.0

182.5 -28.7 305.1 3.7 25.5 35.3

35.6 -35.3 291.0 -5.8 16.4 23.6

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2008 2009 2010 2011 2012 1H13

TOTAL ASSETS 1,243 1,565 2,194 2,784 3,566 4,206

Cash 143 314 275 751 1,099 1,380

NR & AR 362 580 706 757 918 1,192

Inventory 261 255 413 435 715 731

Non-current Asset 366 332 605 681 639 733

TOTAL LIABILITIES 587 774 1,142 1,248 1,525 2,077

Bank Loans 173 178 237 426 419 585

NP & AP 131 233 352 303 433 423

Accrued Exp 180 268 365 382 544 952

TOTAL EQUITY 656 791 1,052 1,536 2,041 2,128

Capital 483 527 532 614 676 676

Additional Paid-in Capital 44 112 112 323 568 568

Retained Earnings 123 149 426 592 820 844

NTD$ million

Five-year Balance Sheet (Consolidated)

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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

YOY (%)

2008 2009 2010 2011 2012 1H13

99.6 25.9 40.2 26.9 28.1 34.9

37.3 119.5 -12.5 173.3 46.3 82.8

-22.0 60.1 21.6 7.4 21.2 14.5

724.0 -2.2 61.6 5.4 64.4 44.3

6,979 -9.4 82.3 12.5 -6.1 12.3

324.3 31.8 47.6 9.2 22.2 29.6

84.1 2.9 32.9 79.9 -1.7 62.7

358.2 78.5 50.8 -13.7 42.6 7.3

2,460 49.1 36.1 4.6 42.4 22.1

35.5 20.6 32.9 46.1 32.9 40.6

25.0 9.2 0.9 15.4 10.1 10.1

-19.8 154.0 0.8 187.4 75.8 75.8

184.1 21.4 186.6 38.8 38.7 44.4

2011 and 2012 Dividend Payout

( 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: 1. 2011 yield is based on UDE’s closing share price on July 23, 2012; the day before ex-dividend day. 2. 2012 yield is based on UDE’s closing share price on July 5, 2013; the day before ex-dividend day.

• We pledge that our primary focus

will be the maximization of returns to our shareholders via the profitable long-term growth of our core business

• We aim to sustain revenue and earnings growth superior to that of our peers

• We intend to maintain a cash dividend payout in excess of 50%

Our Commitment to Shareholders

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Appendix

Manual Winding VS Auto Winding

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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A Pictorial Illustration of the Manual Winding Process

Why Copper?

Low cost

Widespread adaptation

Ease of troubleshooting in manufacturing processes

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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