Q2FY16 Results Briefing

16 – 18 November 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.

Ms. Chan Hui Si huisi@cogentcomms.com

Mr. Gerald Woon woon@cogentcomms.com

Tel: + 65 6704 9288

Agenda

• About Valuetronics

• Q2FY16 Financial Highlights

• Business Outlook

• Investment Merits

• Questions & Answers

3

About Valuetronics - Corporate Profile

4

At a Glance

• Electronic Manufacturing Services (“EMS”) provider 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

• Plastic Injection Moulding

• Tool Design and Tool Fabrication

• Metal Stamping & Machining

• Printed Circuit Box Assembly

• Box Build Assembly

• Supply Chain Management

Accreditations

• ISO9001:2000, TL9000, ISO14001:1996 &

ISO13485; TS16949

Employees • As at 30 Sep 2015 around 4,000

Bloomberg Code VALUE.SP

Reuters Code VLUE.SI

ISIN Code BN2

Issued shares (M) 380

Mkt cap (SG$M) (10 Nov 2015) 161.6

Share price (SG cent) (10 Nov 2015) 43.0

Avg volume 3-mth ('000) 807

52 wk range (SG $) 0.33 – 0.53

25.8%

69.1%

5.1% Shareholding

Executive Directors

Public Float

HSBC Global Investment Funds

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 2012 2015

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

Celebrated 20th anniversary with revenue crossing

HK$2 Billion

Accredited with TS16949 quality

management system

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

Nasdaq-listed Company

Thermal Label Printer for Industrial & Commercial Use

Printers Temperature Sensing Devices

Cold Chain Temperature Monitor for Industrial & Commercial Use

Electronic Thermostats

Unit of a NYSE-listed MNC

Global Brand owned by NYSE-listed MNC Company owned by a UK PE Fund

Industrial & Commercial Electronics (Cont’d)

10

Telecom Product for Business Application

High Precision GPS for Industrial Use

Designing and manufacturing innovative and cost-effective GNSS products on marine, land survey, construction, mapping, and OEM solutions

High Precision GPS

Toronto-listed Company

Company Based in North America

Taiwan-listed Company

Industrial & Commercial Electronics (Cont’d)

11

Access Card Readers

Others

In-vitro Diagnostic Medical Equipment for Testing Human Tissue Samples

Electronic products for Automotive industry

Unit of a STO-listed MNC

Consumer Electronics

12

15W and 40W Bug Zappers

Company owned by PE Fund

(Listed in Amsterdam & New York)

PCBA for Shavers & Electric Toothbrushes for Consumer Use

Lighting Division of a Dutch MNC Consumer Lifestyle Division of a Dutch MNC

Q2FY16 Financial Highlights

13

Financial Highlights

14

HK$’M 1HFY16 1HFY15 %

Change Q2FY16 Q2FY15

% Change

Q1FY16

Revenue 1,076.6 1,254.2 (14.2) 526.5 627.6 (16.1) 550.0

Gross Profit 155.5 162.3 (4.2) 77.0 82.0 (6.0) 78.5

Gross Profit Margin 14.4% 12.9% 1.5 % pt 14.6% 13.1% 1.5% pt 14.3%

Net Profit for the period 65.7 70.2 (6.4) 32.2 36.3 (11.3) 33.5

Net Profit Margin 6.1% 5.6% 0.5% pt 6.1% 5.8% 0.3% pt 6.1%

Revenue Contribution

15

48.2%

51.8%

1H FY16

Consumer Electronics (“CE”)

Industrial and Commercial Electronics (“ICE”)

HK$557.4M HK$519.2M

45.4% 54.6%

Q2 FY16

HK$287.5M

62.7%

37.3%

1H FY15

HK$467.9M

HK$786.3M 64.1%

35.9%

Q2 FY15

HK$239.0M

HK$225.2M

HK$402.4M

Revenue Trend

16

1,263.7

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

786.3 519.2

673.3

604.7 628.8

779.9 956.3

467.9

557.4

-

500.0

1,000.0

1,500.0

2,000.0

2,500.0

FY11 FY12 FY13 FY14 FY15 1HFY15 1HFY16

Consumer Electronics Industrial & Commercial Electronics

2,433.3

HK$’ M

1,937.0

2,288.3 2,429.3

1,076.6

2,210.2

1,254.2

Quarterly Revenue

17

385.7 382.7 383.9 402.4 361.2 325.5

280.2 239.0

191.1 230.6 242.7 225.2 235.0

253.4 269.8

287.5

0

100

200

300

400

500

600

700

Q3FY14 Q4FY14 Q1FY15 Q2FY15 Q3FY15 Q4FY15 Q1FY16 Q2FY16

Consumer Electronics Industrial & Commercial Electronics

613.3 576.8

626.6 627.6 596.2 578.9

526.5 550.0

HK$’ M

Revenue by Shipment Destination

44.8% 53.9% 54.3%

37.5%

34.3% 36.9%

17.7% 11.8% 8.8%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

FY14 FY15 1HFY16

Europe

China & Asia Pacific

North America

18

Gross Profit & Net Profit Trend

78.4

85.5

80.3 82.0 83.7 85.4

78.5 77.0

35.5 39.5 33.9

36.3 39.2 39.8

33.5 32.2

13.6% 13.9% 12.8% 13.1%

14.0%

14.8% 14.3% 14.6%

6.2% 6.4%

5.4% 5.8%

6.6% 6.9%

6.1% 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

Q3FY14 Q4FY14 Q1FY15 Q2FY15 Q3FY15 Q4FY15 Q1FY16 Q2FY16

Gross Profit Net Profit GP% Net Profit Margin 19

Market Capitalisation & Net Cash Balance

32

3.5

37

0.3

47

6.2

56

8.4

59

2.2

72

6.6

80

8.5

80

4.3

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

84

7.0

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 1HFY16

NAV Net Cash balance Market Capitalization

51

8.4

HK’M

20

Earnings Per Share & Dividends Per Share

21

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

22

HK$’000 1HFY16 1HFY15 Q2FY16 Q2FY15

Operating Activities

Net cash generated from operating activities 120,638 22,742 61,259 57,337

Investing Activities

Net cash used in investing activities (37,220) (3,309) (6,516) (1,546)

Financing Activities

Net cash used in financing activities (70,064) (67,346) (70,064) (68,057)

Net increase/(decrease) in cash and cash equivalents

13,354 (47,913) (15,321) (12,266)

Effect of foreign exchange rate changes (805) (379) (659) 910

Cash and Cash equivalents

At beginning of the period 505,847 477,934 534,376 440,998

At end of the period 518,396 429,642 518,396 429,642

Balance Sheet & Key Ratios

23

HK$’M Q2FY16 FY15

Working capital

Inventories 200.7 221.9

Trade Receivables 468.2 517.0

Trade Payables (314.5) (347.4)

354.4 391.5

Net Current Assets 541.4 559.1

Net Cash 518.4 505.8

Net Assets 804.3 808.5

Turnover Days Q2FY16 FY15

Inventory 40.7 38.6

Trade Receivables 81.1 77.7

Trade Payables 63.8 60.4

Key Financial Ratios

24

# Share price as at respective period end date SGD/HKD Ex rate: Q2 FY16: 5.43; Q1 FY16: 5.75; Q4 FY15: 5.64

Q2FY16

FY15

Price (SGD) # 0.41 0.47

NAV per share (SGD)

0.39 0.38

Cash per share (SGD)

0.25 0.24

Cash to Mkt Cap ratio

61% 51%

Q2FY16

FY15

Current ratio 1.8 1.8

ROE 16.0% 18.5%

ROA 8.7% 9.8%

PE ratio 6.50 6.64

PB ratio 1.05 1.23

Business Outlook

25

Business Review

26

Overview

• Strong performance in ICE mitigated the decline in CE

• Overall GP% improved with increased weightage in ICE

• Maintain healthy working capital & positive operating cash flow

CE

• Over 90% of LED products accelerated to end-of-life stage

• Will cease dependence on LED lighting products

• CE revenue will comprise predominant consumer lifestyle products

ICE

• Continued double digital revenue growth from existing customer portfolio & new revenue stream

• Accredited with TS16949 standard, shipping electronic products for automotive industry which offers opportunity for further growth

Outlook

• Well positioned to take advantage of a widened product portfolio and opportunities in the pipeline

• Mindful of macro constraints like a stronger USD & further slowdown in China’s economy

Questions & Answers

27