excellence from the basics1

Walsin Lihwa Corporation

1605 TT

Investor Presentation

June, 2013

excellence from the basics2

Disclaimer

This presentation has been prepared by Walsin Lihwa (“the Company”). This presentation is being presented

solely for your information and is subject to change without notice. No representation or warranty, expressed

or implied, is made and no reliance should be placed on the accuracy, fairness or completeness of the

information presented. The Company, its affiliates, advisers or representatives accept no liability whatsoever

for any losses arising from any information contained in this presentation.

This presentation contains forward-looking statements. Statements that are not historical facts, including

statements about our beliefs and expectations, are forward-looking statements. These statements are based

on current plans, estimates and projections, and therefore you should not place undue reliance on them.

Forward-looking statements speak only as of the date they are made, and we undertake no obligation to

update publicly any of them in light of new information or future events.

This presentation does not constitute an offer or invitation to purchase or subscribe for any shares of the

Company, and no part of this presentation shall form the basis of or be relied upon in connection with any

contract or commitment.

This presentation may not be taken away by you. The contents of this presentation may not be reproduced,

redistributed or passed on, directly or indirectly, to any other person or published, in whole or in part, for any

purpose.

excellence from the basics3

� Company Overview

� Investment Highlights

� Transformation & Growth Strategies

� Strong Financial Positioning

� Appendix

Table of Contents

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1. Company Overview

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Basic Facts about Walsin Lihwa

Wire and CablePrecision MaterialSpecialty Steel

Shandong, Jiangsu, Zhejiang, Anhui Province

Xi’an Walsin Metal

Dongguan Walsin

Taipei HQ

Yenshui

Yang-MeiHsin-Chuang

Yantai Jin Cherng

Nanjing Wasin

Jiangyin Walsin

Jiangyin Walsin Specialty Materials

Changzhou Xin Zhong

Changshu Walsin

Shanghai Baihe

Shanghai Walsin

Hangzhou Walsin

Shandong

Jiangsu

Zhejiang

Anhui

Taichung

Malaysia

Indonesia

Operation Sites in Asia

� Market Cap: US$1.1 billion（as of June 20, 2013）

� Shares Outstanding: 3,616 million shares (as of 1Q13)

� Core Business: Copper, Wire & Cable and Specialty Steel

� Employees: Around 7,000 (1Q13)

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Company Key Milestones

Strategic Expansion and Diversification

1966

1969

1972

Sales reached NT$28.1 billion in 1998

● Acquired 45% of Winbond (1Q13 holding: 24%)

● Formed HannStar Board (1Q13 holding: 25%)

● Entered Mainland China with establishment of

operations in Shanghai and Jiangyin

● Commenced manufacture of stainless steel long products

1987

1989

1992

1993

Future Growth and Evolution

Sales reached NT$133 billion in 2009

● Formed HannStar Display (4Q12 holding: 13%)

● Reorganized into Copper Wire & Cable and

Specialty Steel business groups

● Expanded product lines to include slabs

and hot-rolled bands

● Initiated capacity expansion plans2006

Today

Building the Foundation

Sales was NT$0.38 billion at IPO

● Company founded

● Walsin merged with Lihwa

● Commenced production of copper rods

● Completed IPO on Taiwan Stock Exchange (Ticker: 1605)

Entered the China Market

Expanded into Specialty Steel business

1998

2002

2004

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Copper, Cable & Wire Copper, Cable & Wire

� Copper Rod & Wire

� Power Cable

� Communication Cable

� Optical Wire & Cable

� Stainless Steel Billet

� Stainless Steel Slab

� Wire Rod

� Hot Rolled Bar & Band

� Seamless Pipe

� Steel Wire

� Cold Drawn Bar

Core Business Lines at Walsin Lihwa

Specialty Steel Specialty Steel

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2. Investment Highlights

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Investment Highlights

Solid Capabilities & Comprehensive Product PortfolioSolid Capabilities & Comprehensive Product Portfolio

Strategic and Established Presence in Selected AreasStrategic and Established Presence in Selected Areas

Leading Market Position and Strong Track RecordsLeading Market Position and Strong Track Records

Favourable Industry Dynamics in Greater ChinaFavourable Industry Dynamics in Greater China

Experienced and Dynamic Management TeamExperienced and Dynamic Management Team

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Wire Rod

140,000 tons

Hot Roller Bar

and Band

180,000 tons

Seamless

Pipe

24,000 tons

Steel Slab/Billet

770,000 tons

Cold Drawn Bar

48,700 tons

Optical Wire

and Cable

240,000 KMC

Power Cable

65,572 tons

Copper Rod

and Wire

645,000 tons

Steel Wire

142,000 tons

Communication

Cable

1,080,000 KMP

Solid Capabilities & Comprehensive Product Portfolio

Products and Annual Capacity

Specialty

Steel

Copper,

Wire &

Cable

Business

Segment

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Leading Market Position & Strong Track Records

Client

Billets and

slabs

Product

Steel Cables

and Wires

Power

Cables

Seamless

Pipes

Tong HweiRodacciai SPAKOS

PetroChina Sinopec Formosa Plastics

Taipower

Guangdong

Humen Bridge

Jiangyin

Yangtze River

Bridge

China Hi-Speed

Railroad

Company

State Grid Corp.

of China

Expo 2010

Shanghai China

Highlights

�#1 Copper Wire/Rod Production in Asia

�#1 Stainless Steel Wire Rod Production Globally

�#1 Stainless Steel Long Product Manufacturer in Asia

�#1 Cable/Wire Manufacturer in Taiwan

�#5 Seamless Pipe Manufacturer Globally

�Diversified exposure to multiple industry verticals such as

� Petrochemical, construction, power utilities, nuclear, transportation, industrials, machinery, electronics and telecommunications

�Key partner of multiple marquee infrastructure projects

�Cross-selling among our established customers

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Specialty Steel

• Taiwan Yenshui Plant

• Yantai Jin Cherng Precision Wire Rod Co., Ltd

• Shanghai Baihe Metal Material Products Co., Ltd

• Xi An Walsin Metal Product Co., Ltd

• Taichung Rolling and Finishing Treatments Plant

Wire & Cable

• Taiwan Hsin-Chuang Plant

• Shanghai Walsin Lihwa Power Cable & Wire Co.

• Hangzhou Walsin Power Cable & Wire Co.

• Taiwan Yang-Mei Plant

• Nanjing Walsin Wire & Cable Corp

• Dongguan Walsin Wire & Cable Ltd

Precision Material

• Changshu Walsin Specialty Steel Co., Ltd

• Jiangyin Walsin Steel Cable Co., Ltd

• Jiangyin Walsin Specialty Materials Co., Ltd

Strategic and Established Presence in Selected Areas

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69% 57% 57% 62%

73%

42% 42% 38%27% 31%

2006 2007 2008 2009 2010

China Taiw an Others

$82 $132 $156 $124 $154

Specialty

Steel,

29%

Copper,

Wire &

Cable,

71%

China Focus with Strong Market Demand

Taiwan

42%

China

58%

2006 – 2010 CAPEX

(in US$ millions)

Strong stainless steel growth in China

Resilient cable consumption in China

2012 Sales,

by Segment

3%

(12%)

(23%)(18%)

(25%)

(7%)

14%

7%3% 2% 4%

11%

(30%)

(20%)

(10%)

0%

10%

20%

Ch

ina

N.E

.

As

ia

N.

Am

eri

ca

We

st

Eu

rop

e

Ea

st

Eu

rop

e

RO

W

2009 2010

26% 36% 37% 36% 37% 38%

Strong focus in China Core business with significant market growth potential

Supported by aggressive CAPEX

Walsin is highly exposed to fast-growing Chinese market where economic development underpins strong demands for Walsin’s core businesses.

0

10

20

30

40

2008 2009 2010 2011 2012 2013E

China ROW

09-13E CAGR: 7% in China

6% in ROW

(million tons)

2012 Sales,

by Region

5

Source: Company filings and CRU.

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Experienced Senior Management

The management team has long-accumulated expertise in Wire & Cable and Specialty Steel industries. Sales grew from NT$5.6 billion in 1986 to NT$133.0 billion in 2009, representing a CAGR of 14.7%.

� Joined in 1982 and became President in 1986

� Served as the Chairman since May 1996

� Held a wide range of management and executive positions within Walsin

� Extensive experience in management & operation

Mr. Yu-Ion Chiao

Chairman

� Joined in 2006 as

President of MEMS

Development

� Over 26 years of

industry experience in

semiconductor and

related products

� Previously served as VP

of Operation at Nanya

Technology

Mr. Ching-Jen Hu

President of MEMS

Development

� Joined in 1981

� Appointed as President

of Wire & Cable Group

in 2005

� Expertise in metal

procurement and

operation

Ms. Patricia Chiao

President of Wire and Cable

Business Group

� Joined in 2000 as Senior

Consultant and Director

of the Specialty Steel

Business Group

� Over 30 years of

experience in steel

industry

� Previously held senior

positions at China Steel

Mr. Wen C. Chang

President of Specialty Steel

Business Group

� Joined in 1999 as

Chairwoman of Walsin

China Investment Corp

� Former Deputy Mayor of

Jiangyin City, China

� Currently, also serves as

Chairwoman of Nanjing

Walsin Construction Corp

Ms. Cao Jian Hwa

Chairwoman of Construction

Management

Experienced and Dynamic Management Team

Mr. Hui-Ming Cheng

President

� Joined in 2011 as President, assisting Chairman Chiao in strategy implementation

� Former CFO of HTC, Fubon Financial Holding and Taiwan Mobile

� Held a thorough experience and expertise in both financial and industrial territories

� Named the best CFO in Taiwan by Institutional Investor in 2003

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3. Transformation & Growth Strategies

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Transformation and Growth Strategies

Specialty Steel - Margin Focus

� Maximize steel production and improve margins by

investing ~US$200 million in expanding and improving

upstream production in China and downstream production

in Taiwan (i.e., planned Taichung Plant)

� Substantially increase our EBITDA

Copper, Wire & Cable - Volume & Value Focus

� Maximize utilization and enter into higher value-added

segments

Nanjing Project

� Concentrate on the development of Walsin Centro

� Provide sustainable cash flow to fuel Walsin’s near term

growth

Focus on Core Business and Nanjing Project

Divest Current Non-Core Investments to Fund

High Growth Technology

� Continue to make selective investments and focus on

investment opportunities in 2nd tier cities in China at

attractive entry points

Additional Acquisition of Real Estate Properties

at Prime Location

� Self-fund investments in future growth areas such as solar

technology, LED and MEMS through orderly divestures

from current non-core assets

Focus on core

business and

Nanjing Project

1

Additional

acquisition of real

estate properties

at prime location

Divest non-core

investments to fund

high growth

technology

2 3

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4. Strong Financial Positioning

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Bottom Line Performance, YoY

Operating EBITDA

(in millions of NT$, Margin %)

Gross Profit

(in millions of NT$, Margin %)

Net Income

(in millions of NT$, Margin %)

CAGR: 11.5% CAGR: 11.2% CAGR: 45.1%

7,123

5,603

1,819

4,979

0

2,000

4,000

6,000

8,000

2009 2010 2011 2012

5.4% 2.9%3.1%

1.0%

9,6808,657

5,331

7,535

0

3,000

6,000

9,000

12,000

2009 2010 2011 2012

7.

3%

4.

2.8 4.8

2,119

4,968

(4,193)(3,267)

(6,000)

(4,000)

(2,000)

0

2,000

4,000

6,000

2009 2010 2011 2012

1.6 2.

--

2.

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Financial highlights

19

Consolidated income statement (NT$mm, except per Share data)Consolidated income statement (NT$mm, except per Share data)

2010 2011 2012 1Q13 4Q12

Sales 190,152 189,893 157,440 34,451 42,643

Growth (%) 43.0% -0.1% 37.1% -19.2% 16.7%

Gross profit 8,657 5,331 7,535 1,064 3,771

Gross margin 4.6% 2.8% 4.8% 3.1% 8.8%

EBITDA 9,034 (194) 1,410 880 2,342

EBITDA margin1 4.8% -2.0% -1.2% 2.6% 5.5%

Operating income/(loss) 3,545 (526) 2,281 (114) 2,420

EBIT margin1 1.9% -0.3% 1.4% -0.3% 5.7%

Net income/(loss) 4,968 (4,193) -3,267 189 329

Net margin 2.6% -2.2% 2.1% 0.5% 0.8%

EPS2 1.55 (1.20) (0.94) 0.02 0.09

Source: Company filings1 EBIT margin = Operating income (loss) / Sales2 Net income attributable to shareholders of Parent Company

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Financial highlights (cont’d)

20

Consolidated balance sheet and cash flow statement items (NT$mm)Consolidated balance sheet and cash flow statement items (NT$mm) 2010 2011 2012 1Q13 4Q12

Cash and cash equivalents 10,219 12,940 6,060 8,419 6,060

Account receivables 14,073 16,560 16,122 16,164 16,122

Inventories 35,466 30,074 20,745 21,872 20,745

PP&E, net 30,920 34,061 25,845 26,674 25,845

Total assets 126,991 126,113 108,622 114,492 108,622

Short-term debt 24,399 39,483 11,899 13,517 11,899

Long-term debt 15,779 1,146 19,589 22,355 19,589

Shareholders’ equity 65,344 60,637 61,867 63,809 61,867

Total debt/equity 61.5% 67.0% 50.9% 56.2 50.9%

Net debt/equity 45.8% 45.7% 41.1% 43.0 41.1%

Turnover

Accounts receivables (days) 22.9 17.7 37.9 39.5 35.0

Accounts payable (days) 19.1 11.6 20.0 23.1 19.3

Inventories (days) 64.4 33.2 61.0 69.8 59.6

Cash flow items

Cash flow from operations (2,019) 6,524 6,389 (355) (151)

Cash flow form investments (7,379) (8,004) (4,208) (597) 200

Cash flow from financing 12,680 1,889 (8,293) 3,906 (550)

Source: Company filings1 Annualized data

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Appendix

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Winbond Electronics� Established: 1987

� IPO：1995

� Major Product ： IC DRAM

Walsin Technology Corp� Established ：1992

� IPO： 2001

� Major Product：MLCC Chip-R Walsin

Technology

Advanced MaterialsAdvanced Materials

HannStar Display

Optical ComponentsOptical Components

HannStar Board Corp.� Established ：1989

� IPO：2001(Taiwan Stock Exchange)

2006(Hong Kong Exchanges)

� Major Product：Printed Circuit Board

Advanced MaterialsAdvanced Materials

HannStar Board

SemiconductorSemiconductor

Winbond

Electronics

HannStar Display Corp.� Established：1998

� IPO：2001

� Major Product：TFT-LCD

Walsin Lihwa

- Total Assets

Approx. TWD 260 billion

- Market Value

Approx. TWD 90 billion

- Total Assets

Approx. TWD 260 billion

- Market Value

Approx. TWD 90 billion

Walton Advanced Engineering, Inc.� Established ： 1995

� IPO： 2006

� Major Product：IC Assembly & Testing

Major Affiliates at Walsin Lihwa

Total Assets are as of Q2, 2010, aggregate market value as of Oct, 2010

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Size� Land area: 163,142 m2

� Planned GFA: 1,036,041 m2

Development

Highlight

� Multi-Functional Complex

– Residential

– Commercial including office buildings,

hotel and shopping center

Location

� Located at the intersection of two

constructed subway lines in the heart of

Hexi New District of Nanjing City

Recent

Development

� Pre-sale agreement with China

Development Bank for office space

�Estimated floor area: ~30,000 m2

�Total sale price: RMB 675 million

� Pre-sale agreement with China

Guangfa Bank for office space

�Estimated floor area: ~27,067 m2

�Total sale price: RMB 661 million

Subway Line 1

Subway Line 2

Central Park

Subway Station

A World-Class Multi-Functional Complex

Nanjing Walsin Centro

Nanjing Project Overview