Foreign Listings on TWSE

Taiwan Stock Exchange

Jun. 9, 2018

1

2

Issuer Currency Scale

AT&T USD 5,344 mil.

Apple USD 2,377 mil.

Pfizer USD 1,065 mil.

Verizon USD 5,214 mil

Big U.S. companies like Apple Inc. and Pfizer Inc. have the world’s largest corporate bond market in their backyard. So why have they been rushing to Taiwan lately to issue debt?The reason: a feature of the Taiwanese bond market that—for now—makes it easy and relatively cheap for companies to redeem any debt they issue there before its due date.For sure, the Formosa bond market—so-called after the Portuguese name for the island—is tiny compared with the U.S.’s $8.6 trillion corporate bond market. Yet blue-chip companies including Apple, Pfizer, Verizon Communications Inc. and Comcast Corp. have each issued north of $1 billion of such debt this year. AT&T Inc. issued a $1.43 billion 30-year Formosa bond with a 5.5% coupon earlier this month.In the Formosa market, the call option adds only an extra 0.1 percentage point to 0.15 percentage point in yield, compared with 0.8 percentage point to a full percentage point in other markets, according to Deutsche Bank’s Mr. Stephen.Source: WSJ

Outline

3

I. Why IPO?

II. Why Taiwan?

IV. Foreign Listed Companies on TWSE

V. Summary

III. How to List on TWSE?

VI. Appendix

4

I. Why IPO?

Benefits of IPO

What Boss Worries !The cost of regulatory compliance, business succession plan, dilution of shareholding etc.

5

Sustainable Growth

Fund-raising ability• Capital can be used to fund

capital expenditure, R&D or used to pay off existing debt.

Talents• Easily recruit excellent

employees by giving them

stock compensation plan.

Successor• From private to public, it is

easier to transfer ownership either to the successor or buyer

Compliance• The listings retain professionals

for services and comply with regulatory requirements

What’s worth-IPO Creates New Values

6

II. Why Taiwan?

Market Name Mkt Cap No. of

ListingAvg. Mkt Cap

(US$M)Turnover Rate

(Y17)P/E Ratio

(Dec.31 2017)Mkt Cap. (US$M) Rank

TWSE 1,077,070.0 18 932 1,155.7 78.4% 15.7

SGX 795,072.0 20 744 1,068.6 28.8% 11.7

HKX 4,443,082.2 6 2,186 2,032.5 49.1% 16.3

NASDAQ 10,375,717.9 2 2,968 3,495.9 126.2% 24.8

NYSE 23,138,626.0 1 2,294 10,086.6 77.5% 23.4

Source: WFE and Bloomberg, as of Apr.30, 2018.

Features of Major Capital Markets

7

Taiwan capital market best fits for median-size floating considering the Average Market Cap, Turnover Rate and P/E Ratio.

68%35%

15%

29%

17%36%

0%

50%

100%

Mkt Cap Trading Vol.

TW 50 Mid-Cap 100 SMEsGroup

No. of Listing

Mkt Cap(US$M)

Avg. Mkt Cap(US$M)

Turnover Rate

TW 50 50 730,545 14,611 41.8%

Mid-Cap 100 100 164,821 1,648 108.5%

Other SMEs 754 177,500 235 152.9%

Here are some facts about NASDAQ

93.97%

5.82%

0.22%Top 25%

medium

Last 25%

8

Mkt Cap

91.91%

7.65%

0.44%

Top 25%

medium

Last 25%TradingValue

• Average market cap of a NASDAQ listing company is about US$ 3.26bn.

• TOP 25% listings accounted for 94% of the total market cap,

as well as 92% of trading value.

• LAST 25% (about 700 Co.) listings’ avg. mkt. cap is below US$ 33M.

• Compliance cost in the US is quite a burden for SMEs.

• ICT & SMEs are more than welcome by TWSE.

Name Mkt Cap. P/E 1 APPLE INC 871.81 18.45 2 ALPHABET INC-CL A 698.13 30.24 3 MICROSOFT CORP 625.50 30.43 4 AMAZON.COM INC 546.42 289.25 5 FACEBOOK INC-A 500.42 33.49 6 INTEL CORP 208.21 12.95 7 COMCAST CORP 188.45 19.66 8 CISCO SYSTEMS INC 186.47 17.96 9 AMGEN INC 129.71 14.64

10 NVIDIA CORP 113.12 47.84Source: Bloomberg, Dec. 6, 2017, Unit：US$ bn

Top 10 listings of NASDAQNASDAQ equity markrt summary

Source: Bloomberg, period: 2016/12/6-2017/12/6

Multi-Layer Equity Market

9

Founded in 1962

2002年Emerging Board

• 256 stocks, Mkt. Cap.US$ 25.8bn

2014年Go Incubation Board

2015年Equity-Based Crowd Funding

2013年Gofunding Zone

As of April 2018.

T：17 TDRsW：upward of 10,000 warrantsS：932 Stocks E：107 ETFs

Founded in 1994• 757 Stocks

• 17 ETFs • 1 TDRs

• More than 4,000

warrants• Mkt. Cap. US$ 113 bn

MAIN BOARDMkt. Cap. US$ 1 tn.

Significant Presence of Global Investors

18.419.6

24.3

16.418.5

21.8 22.624.6 23.8

28.430.4

25.9

33.9932.44

30.431.89 32.86 32.34

34.02 34.63

38.29 38.5539.94

41.25

0

5

10

15

20

25

30

35

40

45

0

5

10

15

20

25

30

35

40

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Apr-18

Trading value from foreign investors (%) Market value held by foreign investors (%)

10Source: TWSE.

39.6%

26%

Diversified Funding Strategies

11

Ever-Lasting Fundraising sustains Listings’ Development

As of May 2018, the amount of fund raised by foreign listings accounting forNTD 691 bn. (US$ 2.3 bn.) and NTD 659 bn. (US$ 2.2 bn.) through IPO andIncreasing Capital respectively. We see the follow-on offering is popular inTaiwan’s market; furthermore, upwards of 40% foreign listed companies,besides IPO, float subsequently. Source: TWSE.

0

50

100

150

200

250

300

350

400

2010 2011 2012 2013 2014 2015 2016 2017

209

81 72 9850 76 55 44

8 1446

15 16 13 58

130 1242

227

116

138

37

132

136

27

40

IPO SPO GDR BONDUnit: NT$ 100Million

Foreign Listings Outperform the TWSE Index

12

Foreign Listings Outperformthe TWSE Index

Increasing No. of Foreign Listings,especially from ASEAN

As of Apr. 2018, Unit：%, US$ bn, times

ForeignListings

TWSE

Turnover 70.94% 30.63%

Market Cap 32(A) 1,073(B)

TradingValue

23(C) 329(D)

P/E Ratio 18.51 15.363 11 8 10 6 9 8 5 1

1

1

4

3

1

1 1

6

1826

3641

5059

69 70

0

10

20

30

40

50

60

70

80

-

2

4

6

8

10

12

14

16

2010 2011 2012 2013 2014 2015 2016 2017 A-18

Issuers based on China Issuers based on ASEANIssuers based on USA No. of Foreign Listings

As of Apr. 2018, Unit：no. of IPOs

A/B is only 3.0%

C/D is up to 7.0%

Diversified Foreign Listings

13

China, 60 ASEAN, 6

USA, 5 Others, 1

83%

ASEAN9%

China

ICT, 23Biotech, 7Electric Machinery, 8Trading and Consumers' Goods, 7Others

33%ICT

10%

Biotech

Note: As of Apr. 30, 2018.

Technology 43%

No matter your location, nationality and industry, TWSE is the one!

Both ICT and non-ICT, floatshares and achieve fair value

Upwards of 80% have operations in China and US is the 3rd

USA

7%

14

III. How to List on TWSE?

Listing Requirement

15

Criteria General Unicorn High Tech Agriculture

Duration of

Existence3 years 3 years 3 years 1 year

Company Size

•Paid-in capital or Net-worth: NT$600 mil. (appx. USD 19 mil.)•Market Cap.: NT$1.6 bn

(appx. USD 52 mil.)

•Market Cap to be listed is NT$5 billion or more, and Paid-in capital or Net-worth: NT$600 mil. (appx. USD 19 mil.)

•Market Cap to be listed is NT$6 billion or more, and Paid-in capital or Net-worth: NT$600 mil. (appx. USD 19 mil.)

•Paid-in capital or Net-worth: NT$300 mil. (appx. USD 9.7 mil.)•Market Cap.: NT$0.8 bn

(appx. USD 26 mil.)

Profit.

•No accumulated deficit•Cumulative net income

before tax for the most recent 3 years is NT$250 mil. (appx. USD 8 mil.)•Net income before tax

for the most recent year is NT$120 mil. (appx. USD 4 mil.)

The revenue for the

recent fiscal years is NT$5

billion or higher and

better than figure in

preceding year

The positive net cash

flow from operating

activities for the most

recent fiscal years is

positive

Net worth shall not be

lower than 2/3 of the

capital

The revenue for the

recent fiscal years is NT$3

billion or higher and

better than figure in

preceding year

The positive net cash flow

from operating activities

for the most recent fiscal

years is positive

Net worth shall not be

lower than 2/3 of the

capital

•Net worth shall not be lower than 2/3 of the capital•Working capital is

sufficient for 12 months

Others•Designate a litigious and non-litigious agent in Taiwan•At least 1 of the independent directors shall be domiciled in Taiwan

Clear Review Points Assure Quality IPOs

16

ComplianceCorporate

Governance

Internal Control Financial

CompetitiveNichesR&D

Information Disclosure

• Sound regulatory framework par with international standards

• Financial reports present fairly in all material respects

• Opinion of CPAs

• Peer comparison• Sales validity

• Patent & certification• R&D & talents

• Internal control system establishment

• Consistency of cash flow and order delivery

• Board of Director• Corporate social

responsibilities• Shareholder protection

Efficient Application & Review Process

• Foreign listings take only 3-5 months to finish listing application.

17

Pre-ListingPrep.

CounselingPeriod 6 months

Review Process 1-2 months

Preparation to list2-3 months

• Intermediaries-Underwriter-CPA-Attorney

• Issuer’s Preparation

• Internal / FinancialAudit

• Taxation• Legal Discrepancies• Prospectus

• Documents Review• Listing Review

Committee• Approved by

TWSE’s Board of Directors

• Effective Registration• Offering, Issuing and

Underwriting Shares• Share Dispersion• Centralized Custody

of Shares• Application of Trading

Note：TWSE’s review fee takes NT 500k (appx. USD 16k)，Annual maintenance fee depends on amount of issuing shares and ranges from NT 100k to 450K(appx. USD 3.2k-14.5k) Reasonable cost for Listing Review and Post-Listing Maintenance

18

IV. Foreign Listed Companies on TWSE

(i) BizLink

19

Pre-listing Book Value

IPOMkt Cap.

2018.4.30Mkt. Cap.

65.6 M 121.9M 873.7M

Identify Fair Value

+716%+186%

5.8 7.1 7.5 8.4 9.2

15.6

4.19

7.28 7.28 8.3 9.2310.68

0

5

10

15

20

0

5

10

15

20

2012 2013 2014 2015 2016 2017

Sales EPS

Unit：NT$ Billion, NT$ dollar for EPS

Marks UP- Sustaining its Continuous Operation Growth

leading global interconnect solution provider

Industry Sector: Other Electronic

Operation Location: Fremont, California

Date of Listing :2011.4.21

Paid-in Capital: NT$ 1.2 bn (appx. US$ 38.5M)

Product: Wire Harness and Connector

Unit：USD

HQ

Listing on TWSE

manufacturing sites

sales and engineering support

(ii) Silergy Corp.

Pre-listing Book Value

IPOMkt Cap.

2018.4.30Mkt. Cap.

48.4 M 294.2M 1,819 M

IPO Seeding Industry Sector: Semiconductor

Operation Location: US, China, India

Date of Listing: 2013.12.12

Paid-in Capital: NT$ 880M (appx. US$ 29M)

Product: Analog IC +618%+608%

Unit：USD

1,371 2,087

3,273 4,701

7,139 8,599

388 531 801 1,201 1,470 1,808

0

2000

4000

6000

8000

10000

2012 2013 2014 2015 2016 2017

Sales Net Income

Unit：NT$ Million

Sales went up significantly

Silergy on Forbes Lists Asia's 200 Best Under A Billion

Future FocusSmartness/Green Power/ IOT

(iii) Gourmet Master Co. Ltd.

21

Market Value up to

USD 1.82 bn

Industry Sector: Tourism

Operation Location: Taiwan, China, US

Date of Listing :2010.11.22

Paid-in Capital: NT$ 1.63 bn (appx. US$ 54.3M)

Product: chain stores of fresh bread, cakes and beverages

From 1 to 1,037 stores

TW Top 20 Branding

Sales Breakdown by Region

IPO Mkt CAP

0.72bn

Sales 6yr CAGR up to 20%

Real Successful U.S. Listings on TWSE

22

Company Location Snapshot Spotlight

IML Silicon Valley

Exar(NYSE Listing)acquired IML corp. for US$ 223M

Acquisition Premium ＞

34%

CoAdna-

KYSilicon Valley

II-VI(NasdaqListing) acquiredCoAdnacorp. for US$ 85M

Acquisition Premium ＞

59%

Tanvex-KY

San Diego

First Pharmaceutical company based in U.S. floats on TWSE

Share price

soared 68% above IPO

23

V. Summary

Underwriters

CPA

Legal Counsel

Realize your potential by listing on TWSE

24

GrowthPhaseStart-up

Phase

Listing Application

Phase

Expansion Phase

• Incorporation

•Funding supports business development

• Utilize Capital Raised• Consolidate Strategic Alliance• Enable R&D Capability• Strengthen Information Disclosure• Enhance Corporate Governance• Commit to Social Responsibility

•Duration of Existence•Company Size•Profitability•Dispersed Shareholding

25

VI. Appendix

Listing Requirements in Main Capital Mkt

26

Market General Condition Profitability Application Fee

TWSE

The foreign issuer or any of its controlled companies shall have an operational track record of 3 years or longer.Paid-in Capital or Net worth:NT$ 600,000,000Market Capitalization:NT$1,600,000,000

The cumulative net income before tax for the most recent three fiscal years of the foreign issuer is NT$250 million or higher, and the net income before tax for the most recent fiscal year is NT$120 million or higher and the foreign issuer has no accumulated deficits.

USD$16k

Three years audited accounts. Required to meet one of the following financial standardsi) Earnings Test: Aggregate for last three fiscal years >= US$ 10M; Each of the two most recent fiscal years >=US$ 2M; Each of the prior three fiscal years >$0ii) Global Market Capitalisation Test Issuer must have at least: US$ 200Min global market cap.

The entry fee is up to US$ 500K.

Companies must meet all of the criteria under at least one of the four financial standards below:Standard 1:Earnings-Aggregate Pre-Tax Earnings in prior three fiscal years > $11 million and Each of the prior three fiscal years > $0 and Each of the two most recent fiscal years > $2.2 million.Standard 2:Capitalization with Cash Flow-Aggregated Pre-Tax Earnings in prior three fiscal years > $27.5 million and Each of the prior three fiscal years > $0. Average Market cap.> $550 million over prior 12 months Market cap. Revenue of previous fiscal year > $110 million.Standard 3:Capitalization with Revenue-Average Market cap.> $850 million over prior 12 months Market cap. Revenue of previous fiscal year > $90 million.Standard 4:Assets with Equity-stockholder's equity is up to 55 million.

The entry fee is up to US$ 50K ~ 75K.

SGX

Minimum consolidated pre-tax profit of at least S$30 million for the latest financial year with operating track record of at least 3 years;Profitable in the latest financial year, and has a market capitalization of not less than S$150 million based on the issue price and post-invitation issued share capital with operating track record of 3 at least years;

Operating revenue in the latest completed financial year and a market capitalization of not less than S$300 million based on the issue price and post-invitation issued share capital. Real Estate Investment Trusts and Business Trusts who have met the S$300 million market capitalization test but do not have historical financial information may apply under this rule if they are able to demonstrate that they will generate operating revenue immediately upon listing. Operating track record required is at least 1 year.

USD$71k~143k

THANKS FOR YOUR LISTENING

Foreign Listing Department

Chien-chung TIEN TEL:886-2-8101-3649 0814@twse.com.tw

Chang-i CHUANG TEL:886-2-8101-3509 1020@twse.com.tw

Nai-yu KUO TEL:886-2-8101-3627 1210@twse.com.tw