Q1FY16 Presentation

August 2015 1

Important Notice

2

This presentation contains forward-looking statements which can be identified by the context of the statement and generally arise when the Company is discussing its beliefs, estimates or expectations. Such statements may include comments on industry, business or market trends, projections, forecasts, and plans and objectives of management for future operations and operating and financial performance, as well as any related assumptions. Readers of this presentation should understand that these statements are not historical facts or guarantees of future performance but instead represent only the Company’s belief at the time the statements were made regarding future events, which are subject to significant risks, uncertainties and other factors, many of which are outside of the Company’s control. Actual results and outcomes may differ materially from what is expressed or implied in such forward-looking statements. The Company cautions readers not to place undue reliance on any forward-looking statements included in this presentation, which speak only as of the date made; and should any of the events anticipated by the forward-looking statements transpire or occur, the Company makes no assurances on what benefits, if any, the Company will derive therefrom.

Mr. Jess Fu jessfu@cogentcomms.com

Mr. Gerald Woon woon@cogentcomms.com

Tel: + 65 6704 9288

Agenda

• About Valuetronics

• Customer & Product Portfolio

• Q1FY16 Financial Highlights

• Business Outlook

• Questions & Answers

3

About Valuetronics - Corporate Profile

4

At a Glance

• Electronic Manufacturing Services (“EMS”) player established in 1992 in Hong Kong

• Listed on Main Board of SGX on 28 March 2007

• Production facilities in Daya Bay & Danshui Town, Guangdong, PRC (60 minutes from Shenzhen)

Integrated EMS Provider

• Engineering Design & Development

• Product Design & Deployment

• Plastic Injection Moulding

• Tool Design and Tool Fabrication

• Metal Stamping & Machining

• Printed Circuit Box Assembly and Box Build Assembly

• Supply Chain Management

Accreditations

• ISO9001:2000, TL9000, ISO14001:1996 &

ISO13485

Employees • As at 30 Jun 2015 > 4,000

Bloomberg Code VALUE.SP

Reuters Code VLUE.SI

ISIN Code BN2

Issued shares (M) 375

Mkt cap (SG$M) (6 Aug 2015) 148.0

Share price (SG cent) (6 Aug 2015) 39.5

Avg volume 3-mth ('000) 930

52 wk range (SG $) 0.28 – 0.54

26.1%

68.8%

5.1% Shareholding

Executive Directors

Public Float

HSBC Global Investment Funds

Our Business Model

5

A Premier Design and Manufacturing Partner

Proactive deployment of Design & Development capabilities

Integrated Manufacturing Services •SMT •Wire bonding •FG assembly •Metal part machining •Injection molding •Tool design & fabrication

Engaging in customers

value chain •Design for manufacturing •Design & build test fixtures •Rapid prototyping •Regulatory compliances •Supply chain management Services

Design & Development •Mechanical & electrical engineering design from concept to mass production •Better manufacturability with enhanced features & lower cost •Software development •Industrial design

Value Add

Key Milestones

6

1992 2002 2003 2005 2007

Headquartered in Hong Kong with manufacturing

facilities in Danshui Town, PRC

Use of ROHS equipment and accredited with

TL9000

Adopted work cell management &

updated to ISO9001:2000

Became preferred supplier of a Dutch

MNC for its consumer lifestyle

segment

Listed on SGX-Mainboard & Commenced

construction for Daya Bay Facility

2008 2008 2009 2010 2012

Became preferred supplier of a Dutch MNC for its Lighting

segment

Completed Phase 1 construction of

Daya Bay Facility

Opened Daya Bay Facility

Acquired medical business

Signed Licensing agreement

Celebrated 20th anniversary with revenue crossing

HK$2 Billion

Bird’s-eye View - DYB Facility

7

• Land use rights acquired in 2006

• Total site area > 110,000 sq m

Customer & Product Portfolio

• Ability to accommodate customers requirement for various volume, mix and complexity

• Customer base ranged from emerging enterprises in Northern American (low-volume complex custom product) to Top Global MNC (high-volume standards product)

8

Industrial & Commercial Electronics

Consumer Electronics

Industrial & Commercial Electronics

9

Transaction Printer for Slot, POS & Teller Station Machines

Thermal Label Printer for Industrial & Commercial Use

Printers

High Precision GPS for Industrial Use

GPS products on marine, land survey, construction, mapping, and OEM solutions

High Precision GPS

Nasdaq-listed Company

Global brand owned by NYSE listed MNC

Toronto-listed Company

Company based in North America

Industrial & Commercial Electronics (Continue)

10

Cold Chain Temperature Monitor for Industrial & Commercial Use

Temperature Sensing Devices

Telecom Product for Business Application

Access Card Readers

Others

In-vitro Diagnostic Medical Equipment for Testing Human Tissue Samples

Taiwan’s #1 Business Communication Marker

Electronic thermostats

Unit of a NYSE listed MNC

Company owned by a UK PE fund

Taiwan-listed Company

Unit of a STO listed MNC

Consumer Electronics

11

15W and 40W Bug Zappers PCBA for Shavers & Electric Toothbrushes for Consumer Use

Lighting Division of a Dutch MNC Consumer Life-style Division of a Dutch MNC

Company owned by PE fund

Q1FY16 Financial Highlights

12

Financial Highlights

HK$’M Q1FY16 Q1FY15 % Change

Revenue 550.0 626.6 (12.2)

Gross Profit 78.5 80.3 (2.2)

Gross Profit Margin 14.3% 12.8% 1.5% pt

Net Profit for the year 33.5 33.9 (1.1)

Net Profit Margin 6.1% 5.4% 0.7% pt

13

Revenue Contribution

14

50.9%

49.1%

Q1FY16

Consumer Electronics (“CE”)

Industrial and Commercial Electronics (“ICE”)

HK$270M

HK$280M 61.3%

38.7%

Q1 FY15

HK$243M

HK$384M

Revenue Trend

15

1,263.7

1,683.6 1,581.4 1,653.4 1,473.0

383.9 280.2

673.3

604.7 628.8

779.9 956.3

242.7 269.8

-

500.0

1,000.0

1,500.0

2,000.0

2,500.0

FY11 FY12 FY13 FY14 FY15 Q1FY15 Q1FY16

Consumer Electronics Industrial & Commercial Electronics

2,433.3

HK$’ M

1,937.0

2,288.3 2,429.3

550.0

2,210.2

626.6

Quarterly Revenue

16

433.3 451.7 385.7 382.7 383.9 402.4

361.2 325.5 280.2

177.9 180.3

191.1 230.6 242.7 225.2 235.0

253.4 269.8

0

100

200

300

400

500

600

700

Q1FY14 Q2FY14 Q3FY14 Q4FY14 Q1FY15 Q2FY15 Q3FY15 Q4FY15 Q1FY16

Consumer Electronics Industrial & Commercial Electronics

613.3 611.2 632.0

576.8

626.6 627.6 596.2

578.9 550.0

HK$’ M

Revenue by Shipment Destination

44.8% 53.9% 54.6%

37.5%

34.3% 35.2%

17.7% 11.8% 10.2%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

FY14 FY15 Q1FY16

Europe

China & Asia Pacific

North America

17

Gross Profit & Net Profit Trend

78.9 84.0

78.4

85.5

80.3 82.0

83.7 85.4 78.5

33.3 39.6

35.5

39.5

33.9 36.3 39.2 39.8 33.5

12.9% 13.3% 13.6% 13.9%

12.8% 13.1%

14.0% 14.8% 14.3%

5.4% 6.3% 6.2% 6.4%

5.4% 5.8%

6.6% 6.9%

6.1%

0.0%

2.0%

4.0%

6.0%

8.0%

10.0%

12.0%

14.0%

16.0%

0

10

20

30

40

50

60

70

80

90

Q1FY14 Q2FY14 Q3FY14 Q4FY14 Q1FY15 Q2FY15 Q3FY15 Q4FY15 Q1FY16

Gross Profit Net Profit GP% Net Profit Margin 18

Market Capitalization & net cash balance

32

3.5

37

0.3

47

6.2

56

8.4

59

2.2

72

6.6

80

8.5

84

3.3

15

3.5

13

9.9

98

.2

24

3.7

22

1.6

47

7.9

50

5.8

13

5.8

32

2.2

50

0.5

51

1.4

47

9.3

74

0.3

99

2.7

99

1.9

0.0

100.0

200.0

300.0

400.0

500.0

600.0

700.0

800.0

900.0

1000.0

FY09 FY10 FY11 FY12 FY13 FY14 FY15 Q1FY16

NAV Net Cash balance Market Capitalization

53

4.4

HK’M

19

Earnings Per Share & Dividends Per Share

20

25

.5

15

.0 16

.7

34

.2

36

.5

21

.9

40

.6

40

.0

7.8

4.5

7.0

14

.0 17

.0

8.0

20

.0

20

.0 6.1%

11.8%

7.7%

9.8%

11.9%

6.0%

9.8%

0.0%

2.0%

4.0%

6.0%

8.0%

10.0%

12.0%

14.0%

0.0

5.0

10.0

15.0

20.0

25.0

30.0

35.0

40.0

FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15

EPS Dividend per share Dividend Yield

7.5%

We are committed to formal dividend policy of 30-50% payout ratio

HK cents Yield

Share Price S$0.230 S$0.075 S$0.165 S$0.235 S$0.230 S$0.205 S$0.330 S$0.47

Dividend pay out

ratio 30.1% 30.0% 41.9% 40.9% 46.6% 36.5% 49.3% 50.0%

Summary of Cash Flows

21

HK$’000 Q1FY16 Q1FY15

Operating Activities

Net cash generated from/ (used in) operating activities 59,379 (34,595)

Investing Activities

Net cash used in investing activities (30,704) (1,763)

Financing Activities

Net cash generated from financing activities - 711

Net increase/(decrease) in cash and cash equivalents 28,675 (35,647)

Effect of foreign exchange rate changes (146) (1,289)

Cash and Cash equivalents

At beginning of the period 505,847 477,934

At end of the period 534,376 440,998

Balance Sheet & Key Ratios

22

HK$’M Q1FY16 FY15 Q1FY15

Working capital

Inventories 236.2 221.9 263.1

Trade Receivables

516.6 517.0 673.1

Trade Payables

(377.8) (347.4) (482.0)

375.0 391.5 454.2

Net Current Assets

579.8 559.1 556.0

Net Cash 534.4 505.8 441.0

Net Assets 843.3 808.5 757.9

Turnover Days

Q1FY16

FY15

Q1FY15

Inventory 45.7 38.6 43.9

Trade Receivables

85.7 77.7 98.0

Trade Payables

74.0 60.4 80.5

Key Financial Ratios

23

# Share price as at respective period end date SGD/HKD Ex rate: Q1 FY16: 5.75; Q4 FY15: 5.64; Q1 FY15: 6.20

Q1FY16

FY15

Q1FY15

Price (SGD) # 0.46 0.47 0.40

NAV per share (SGD)

0.39 0.38 0.33

Cash per share (SGD)

0.25 0.24 0.19

Cash to Mkt Cap ratio

54% 51% 47%

Q1FY16

FY15

Q1FY15

Current ratio

1.7 1.7 1.7

ROE 15.9% 18.5% 17.9%

ROA 8.3% 9.8% 8.4%

PE ratio 7.49 6.64 6.88

PB ratio 1.18 1.23 1.21

Business Outlook

24

Business Review

• Market players accelerate aggressive pricing strategies especially for mass market LED lighting products. Such trend will continue to erode our margin in this segment.

• Some of our existing LED mass market products going to reach the end-of-life cycle, foresee revenue will be significantly less dependent on LED lighting products going forward.

• CE segment to eventually comprise principally consumer lifestyle products.

Overview

• Strategy to continue to grow this segment

• New business opportunities in the pipeline

• Having reached the final phases of contract negotiation with a customer

• Optimistic on the further growth

ICE

25

CE

• We continued to benefit from the strong performance in ICE segment, which mitigated the decline in CE segment

• Overall gross profit margin improved slightly with increased weighting in ICE segment.

Questions & Answers

26