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YFC-Bon Eagle6220 TT

3Q19 Results Presentation

November 2019

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Revenues and Margin Trend

3Q19 Revenues & Margins

§ Revenue increased 18% QoQ and declined 1% YoY to NT$3.5bn in 3Q19.

§ 3Q19 Operating margin was 4.4% versus 7.4% in the same period last year.

§ 3Q19 Net Margin was 2.8% versus 5.6% in the same period last year.

-30%

0%

30%

60%

90%

120%

150%

0

750

1,500

2,250

3,000

3,750

1Q17 2Q17 3Q17 4Q17 1Q18 2Q18 3Q18 4Q18 1Q19 2Q19 3Q19

Quarterly revenue trend

Revenue Growth(YoY)

NT$M

0%

2%

4%

6%

8%

10%

20%

22%

24%

26%

28%

30%

1Q17 2Q17 3Q17 4Q17 1Q18 2Q18 3Q18 4Q18 1Q19 2Q19 3Q19

Quarterly Margin Trend

Gross Margin (LHS) Operating Margin (RHS)

Net Margin (RHS)

2

Earnings and Growth Trend

1-3Q19 Performance

§ The impact of US tariffs was more evident in 3Q19, as net income fell 51% YoY to NT$97m.

§ 1-3Q19 net income fell 36% YoY to NT$181m. EPS through the first 3 quarters was NT$1.46.

§ Heightened impact of the tariffs will be felt in 4Q19, as all pre-tariff inventories have been sold down and the first 3 rounds of tariffs have gone into effect. Therefore, we maintain a cautious outlook towards 4Q19 profitability.

-200%

-130%

-60%

10%

80%

150%

0

70

140

210

280

350

420

1Q17 2Q17 3Q17 4Q17 1Q18 2Q18 3Q18 4Q18 1Q19 2Q19 3Q19

Earnings & Growth Trend

Operating Profit Net Income to Parent Net Income Growth(YoY)

NT$M

0

0.5

1

1.5

2

1Q17 2Q17 3Q17 4Q17 1Q18 2Q18 3Q18 4Q18 1Q19 2Q19 3Q19

EPSNT$

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1-3Q19 Overview

§ Challenges introduced by the US-China Trade war have been significant.

§ Major US retailers have been raising prices and industry peers have been laying off employees. Some major retail chains have announced bankruptcy and/or store closures.

§ We have been raising prices and diversifying our product sources to offset rising costs.

§ Capex requirements have increased, as we build more flexibility into our manufacturing capabilities. We expect to spend more than NT$280m this year vs. NT$186m in 2018. Key areas of spending will be capex in the Philippines for plant & warehouse space, plus equipment and land acquisition costs in Taiwan.

§ In 2016-2018 our dividend payout was above 70%. We will strive to maintain this rate, but have lowered our target minimum payout to 50%-60% for the next three years.

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Key Business Unit 1-3Q19 Performance

Monoprice

§ Total sales fell by 5% YoY in 1-3Q19 to US$111mn. This was solely driven by a reduction in sales of 3rd party branded product, as Monoprice branded product sales grew 2% YoY. Own-Brand sales were 93% of 1-3Q19 total sales.

§ Price increases, staff expense reduction measures and product mix improvements are helping to offset increased costs from the US tariffs.

§ Amongst traditional product lines the strongest growth was from 3C Cables (+6% YoY) and A/V & Pro Audio (+11% YoY); while the combined sales of new product lines ‘Home & Office’ and ‘Outdoor & Cycling’ grew 38% YoY to US$3.6 million.

Prime Wire & Cable

§ The company has been successful in diversifying its supply sources and in growing non-Lowe’s revenue sources as a percent of total revenue.

YFC-BonEagle Manufacturing§ YFC shifted capacity to Taiwan and is building a processing plant in the

Philippines, while consolidating China production into one plant.

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Sales Breakdown by Channel

E-Commerce43%

B2B Retail39%

Manufacturing17%

1 – 3Q19

E-Commerce 44%

B2B Retail41%

Manufacturing 15%

1 – 3Q18

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Sales Breakdown by Product

3C Cables & Accessories

29%

Power Cord41%

Consumer Electronics

30%

3C Cables & Accessories

29%

Power Cord40%

Consumer Electronics

31%

1 - 3Q19 1 - 3Q18

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Consolidated Income Statement - Quarterly

Unit: NTD million 3Q19 2Q19 3Q18 QoQ YoY

Net Revenue 3,506 2,972 3,544 18% -1%Gross Profit 757 680 868 11% -13%

Gross Margin 21.6% 22.9% 24.5%Operating Expenses 602 562 605 7% 0%

SG&A percent of Sales 17.2% 18.9% 17.1%Operating Income 155 117 263 32% -41%

Operating Margin 4.4% 3.9% 7.4%Net Non-Operating Income (Loss) -24 -10 -14Pre-Tax Income 130 107 249 21% -48%Income Tax Expense 33 28 51Minority Interest 1 0 0Net Income to Parent 97 79 198 23% -51%

Net Margin 2.8% 2.7% 5.6%EPS (NT$) 0.78 0.63 1.59 23% -51%

ROE – not annualized 3.9% 3.1% 8.3%Depreciation 67 64 48CAPEX 27 128 41

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Consolidated Income Statement 1-3Q19 vs 1-3Q18

Unit: NTD million 1-3Q19 1-3Q18 YoY

Net Revenue 8,893 8,875 0%Gross Profit 2,017 2,075 -3%

Gross Margin 22.7% 23.4%Operating Expenses 1,708 1,673 2%

SG&A percent of Sales 19.2% 18.9%Operating Income 309 402 -23%

Operating Margin 3.5% 4.5%Net Non-Operating Income (Loss) -64 -46Pre-Tax Income 245 356 -31%Income Tax Expense 62 74Minority Interest 1 0Net Income to Parent 181 282 -36%

Net Margin 2.0% 3.2%EPS (NT$) 1.46 2.26 -36%

ROE - not annualized 7.2% 12.0%Depreciation 195 138CAPEX 194 137

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Consolidated Balance Sheet - Quarterly

2019/9/30 2019/6/30 2018/9/30Unit: NT$ million Major Item $ % $ % $ %

Cash and Cash Equivalents 1,033 11% 1,138 13% 1,011 13%Notes and Accounts Receivable, Net 2,801 31% 2,125 25% 2,487 31%Inventories 2,432 27% 2,375 28% 2,254 28%Other Current Assets 281 3% 322 4% 305 4%Fixed Assets 1,327 15% 1,789 21% 1,219 15%Other Long-term Assets 1,250 14% 730 9% 729 9%Total Assets 9,124 100% 8,478 100% 8,006 100%

Current Liabilities 5,082 56% 4,545 54% 3,994 50%Long-term Debt 997 11% 1,056 12% 773 10%Other Non-Current Liabilities 534 6% 439 5% 772 10%Total Liabilities 6,613 72% 6,041 71% 5,538 69%Common Stock 1,246 1,246 1,246Total Equity 2,511 28% 2,437 29% 2,468 31%Book Value per Share (NT$) 20.1 19.5 18.3Key Indices

Current Ratio ( Current Assets / Current Liabilities) 129% 131% 152%

Net Cash (Debt) to Equity -130% -116% -126%

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Disclaimer•The information contained in this confidential document ("Presentation") has been prepared by YFC-BonEagle Electric Co. Ltd. (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 a guarantee 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.

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Thank you!

Company Website: www.cables.com.tw