Pacific Hospital Supply Co., Ltd 1Q2017 Company Report
2
Our Milestone
1977 PAHSCO formed with a stock Capital of NT$ 1 Million
1980 Started the production & trading of central medical gas equipment
2001 Tong Lo Factories received ISO9001 & CE Certification
2002 Tong Lo (F0) received GMP Certification
2004 PAHSCO became a public listed company in the stock market
2005 Tong Lo (F0’) formed to expand the production of sterilize medical product
2006 The automatic warehousing system was officially implemented in August
1987
2010 Obtained 11,997m2 of production capacity and expanded Tong Lo (F3)
2009 Tong Lo (F1) constructed in November
2008
2011
Issued series of secured domestic convertible bonds & obtained 7,085 m2 of land
Implemented Oracle ERP systems
2012 Implemented BPM system
PAHSCO was Ranked Top 5% for Corporate Governance from 2014 to 16 & has been awarded with Best Rankings for Information Transparency and Disclosure for 7 consecutive years since 2008.
2013
Tong Lo (F2) constructed & expanded the production of gas piping products
2014
Established a subsidiary company - Pacific Precision Technology Co., Ltd.
2016
Established mold department in the subsidiary company
New Factory constructed at Tong Lo Science Park in December
Common Wealth Magazine (May,2016 edition)
Ranked PAHSCO • No. 1071 in Top 2000 Enterprise
• No. 48 Most Profitable Manufacturer • No. 10 in Precision Instrument Industry
• No. 325 for Sales Growth • No. 405 for After Tax Profit
Company News
Taichung Office
3 Factories in the Tong-Lo Industrial Park
Taipei Headquarter
Our Location
Miaoli
Taiwan
New Factory at Tong-Lo Science Park
Kaohsiung Office
5
Land Area Floor Area Number of Workers
25000 m²
Factories 33000 m² (Full capacity of 1.8B TWD Sales)
AS/RS 1650 m² (2400 storage spaces)
Dorm 2000 m² (150 people capacity)
--------------------- Total of 36650 m²
697 people (2016)
Current Factories
6
New Factory
Land Buildings Capacity
50000 m²
Factory 44100 m² AS/RS 4500m²
(8100 storage spaces)
Dorm 6000m² (380 people capacity)
--------------------- Total of 54600 m²
12 Sterilizer 4.3B TWD sales
With full capacity
*Calculation base: Each sterilizes 30M TWD
per month
Our Certificate
-
50
100
150
200
250
300
350
400
450
Middle Eastand Africa
OtherEurope Asia Pacific
WesternEurope America
Global
8 14
72 91
155
340
11 16
92 99
187
405
9.8% 5.7%
8.4% 2.6%
6.6%
8
Introduction to Medical Product Industry and Future
Global Market for Medical Device and Equipment:
2012-2017 CAGR 6%
Source: BMI(2014); IEK(2014)
Market size in 2012 and 2017(e)
Unit:Billion (USD)
CAGR 6.0%
9
Introduction to Medical Product Industry and Future
Global Medical Product Market Share
Source: BMI Espicom(2015); IEK(2015)
Estimated percentage by Country
U.S. 39.9%
Japan 8.8%
Germany 7.6%
China 6.0%
France 4.2%
Others 33.6%
2015 USD 357 B
Estimated percentage by Category
Diagnostic Imaging Product 25.2%
Medical Disposal Devices 15.5%
Assistive Device 12.5%
Orthopodic &
Implantable Product 11.9%
Orthodontic Product
6.8%
Others 28.0%
2015 USD 357 B
10 Source: Frost & Sullivan, 2010
Unit: Billion(USD)
5.94
6.53
8.9
12.47
14.25
18.4
20.48
21.07
23.45
24.34
37.1
48.08
55.8
0 10 20 30 40 50 60
Cosmetic Surgery & Lifestyle Products
Neurology & Neuromuscular Devices
Intravenous & Infusion Devices
Urology & Gynecology Devices
Ophthalmic & Optical Devices
General Surgical Therapeutic Devices
Single Use Surgical & Disposables
Minimally Invasive Surgical Devices
Wound Care and Biomaterials
Others
Orthopedic and Prosthetic Devices
Anesthetic and Respiratory Devices
Cardiology and Thoracic Surgery
Introduction to Medical Product Industry and Future
11
Market of Aging Population
Due to global low birth rate, the population
structure is aging at a fast rate. % of health
expenditure increased as people aged.
Age % of health expenditure
<25 3.4%
25~34 5.4%
35~44 6.5%
45~54 6.8%
55~64 8.8%
>65 13.4%
*Source: Franklin Templeton(2016); Council for Economic Panning and Development(2008); United Nations(2006)
U.S. Europe China Japan
12
1950~70
Period
1980~2010
Period
2010
Period
Childhood Adulthood Elder
WWII Baby Boom: 1946~1964 U.S births increased rapidly Aging Boom: 2011~2029 Baby boomers start to enter age of 65
Global Population of Children vs. Elders (%)
Under 5
It is estimated global population age over 65 will surpass age under 5 after 2020 and the difference will continue to grow.
Market of Aging Population
*Source: Franklin Templeton(2016); United States Census Bureau (2016); United Nations(2013)
Over65
Developed Countries
with Subcontract Manufacturing Focus
(ODM/OEM)
Emerging Countries
with Self-Branding Focus
(OBM)
US Japan Germany China Taiwan
Ove
rall In
de
x
Population (Million) 319 127 81 1364 23
Age
(0~14:15~64:65up) 19 : 67 : 14 13 : 61 : 26 13 : 66 : 21 17:74:9 13 : 74 : 13
Birth Rate:Death Rate 13 : 8 8 : 10 9 : 11 12 : 7 10 : 10
Fertility Rate 1.9 1.4 1.4 1.6 1.1
Life Expectancy at Birth 79 84 81 76 80
2014 GDP (Billion USD) 17,419 4,601 3,868 10,354 530
GDP per Capita(USD) 54,630 36,194 47,774 7,590 22,648
GDP Growth Rate 2.4% -0.1% 1.6% 7.3% 3.5%
Me
dic
al In
du
stry
Ind
ex
Health Expenditure per
Capita(USD) 9,403 3,703 5,477 420 2,479
Change of Health
Expenditure per Capita
(2011 ~ 2014)
3 ~ 5%
Steady
-17 ~ 2%
Fluctuated
-5% ~ 7%
Fluctuated
14 ~ 18%
Fast Growing
2 ~ 3%
Steady
Health Expenditure / GDP
(%) 17.1 10.2 11.3 5.5 6.6
Hospital Beds per 1000
persons (unit) 2.9 13.7 8.2 3.8 6.4
13
Overall Index of Geographic Areas
Source: World Bank(2014); IMF International Financial Statistics (IFS 2014); AmCham TW
14
Our Major Exporting Regions
Taiwan 17.3% China
11.5%
Other Asia 11.4%
North America
7.4%
Latin America
5.1%
Germany 6.3%
Other Europe 10.3%
Middle East & Others 5.7%
PAHSCO 2016
Japan
25%
Taiwan 18.5%
Other Asia 12.5%
China 12.0%
North America
9.1%
Latin America
4.4%
Germany 7.1%
Other Europe
9.3%
Middle East & Others 6.2%
PAHSCO 2015
Japan
20.9%
15
Our Major Exporting Regions
Taiwan 18.1%
China 11.9% Other Asia
11.6% North America
6.1%
Latin America
5.6%
Germany 8.0%
Other Europe 11.5%
Middle East & Others 5.9%
PAHSCO 1Q2017
Japan
21.3%
Taiwan 17.0%
China 12.9%
Other Asia 11.8%
North America
6.4%
Latin America
4.7%
Germany 5.6%
Other Europe
9.5%
Middle East & Others 7.2%
PAHSCO 1Q2016
Japan
24.9%
16
Our Major Exporting Regions
Taiwan 17.7%
China 11.4%
Other Asia 11.7% North
America 5.7%
Latin America
4.6%
Germany 9.7%
Other Europe 10.9%
Middle East & Others 6.3%
PAHSCO 2017 Jan-May
Japan
22%
Taiwan 16.1%
China 12.9%
Other Asia 11.3%
North America
8.9%
Latin America
4.8%
Germany 6.5%
Other Europe
9.9%
Middle East & Others 6.4%
PAHSCO 2016 Jan-May
Japan
23.2%
17
85% 90% 95% 100%
2010
2011
2012
2013
2014
2015
2016
1Q2017
90.5%
91.0%
90.5%
90.9%
90.90%
90.40%
92.9%
93.4%
5.00%
5.9%
6.9%
7.0%
7.00%
8.50%
6.8%
6.4%
2.9%
3.1%
2.6%
2.1%
2.10%
1.10%
0.3%
0.2%
Medical Device Medical Equipment Piping System
Percentage of Product Categories
18
Tubes, 26%
CSS, 25%
Bags, 12%
Others,
24%
Wound
Drainage
System, 8%
Bottles, 3%
Respiratory
, 2%
Disposable Medical Device
Closed Suction System (CSS) Sales Revenue:399 Million(NTD) % of Product TR: 25% (2nd )
Tubes Sales Revenue:418 Million(NTD) % of Product TR: 26% (1st )
Bags Sales Revenue:193 Million(NTD) % of Product TR: 12% (3rd)
Wound Drainage System Sales Revenue:130 Million(NTD) % of Product TR: 8% (4th)
PAHSCO 2015
19
Tubes, 26%
CSS, 25%
Bags, 12%
Others,
23%
Wound
Drainage
System,
10%
Bottles, 2%
Respiratory
, 2%
Disposable Medical Device
Closed Suction System (CSS) Sales Revenue:427 Million(NTD) % of Product TR: 25% (2nd )
Tubes Sales Revenue:434 Million(NTD) % of Product TR: 26% (1st )
Bags Sales Revenue:204 Million(NTD) % of Product TR: 12% (3rd)
PAHSCO 2016
Wound Drainage System Sales Revenue:162 Million(NTD) % of Product TR: 10% (4th)
20
Tubes, 25%
CSS, 29%
Bags, 11%
Others,
22%
Wound
Drainage
System, 9%
Bottles, 2%
Respiratory
, 2%
Disposable Medical Device
Tubes Sales Revenue:111 Million(NTD) % of Product TR: 25% (2nd )
Closed Suction System (CSS) Sales Revenue:129 Million(NTD) % of Product TR: 29% (1st )
Bags Sales Revenue:50 Million(NTD) % of Product TR: 11% (3rd)
PAHSCO 1Q2016
Wound Drainage System Sales Revenue:41 Million(NTD) % of Product TR: 9%
21
Tubes, 26%
CSS, 27%
Bags, 10%
Others,
23%
Wound
Drainage
System,
11%
Bottles, 2%
Respiratory
, 2%
Disposable Medical Device
Closed Suction System (CSS) Sales Revenue:115 Million(NTD) % of Product TR: 27% (1st )
Tubes Sales Revenue:109 Million(NTD) % of Product TR: 26% (2nd )
Wound Drainage System Sales Revenue:45 Million(NTD) % of Product TR: 11% (3rd)
PAHSCO 1Q2017
Bags Sales Revenue:42 Million(NTD) % of Product TR: 10% (4th)
22
Tubes, 25%
CSS, 27%
Bags, 11%
Others,
23%
Wound
Drainage
System,
10%
Bottles, 2%
Respiratory
, 2%
Disposable Medical Device
Closed Suction System (CSS) Sales Revenue:210 Million(NTD) % of Product TR: 27% (1st )
Tubes Sales Revenue:192Million(NTD) % of Product TR: 25% (2nd )
Wound Drainage System Sales Revenue:77 Million(NTD) % of Product TR: 10% (4th)
PAHSCO 2016 Jan-May
Bags Sales Revenue:88 Million(NTD) % of Product TR: 11% (3rd)
23
Tubes, 27%
CSS, 26%
Bags, 10%
Others,
23%
Wound
Drainage
System,
11%
Bottles, 2%
Respiratory
, 2%
Disposable Medical Device
Closed Suction System (CSS) Sales Revenue:115 Million(NTD) % of Product TR: 26% (2nd )
Tubes Sales Revenue:109 Million(NTD) % of Product TR: 27% (1st )
Wound Drainage System Sales Revenue:45 Million(NTD) % of Product TR: 11% (3rd)
PAHSCO 2017 Jan-May
Bags Sales Revenue:42 Million(NTD) % of Product TR: 10% (4th)
24
Sales Distribution (By Domestic & Export)
PAHSCO 2015
Domestic 18.5%
Export 81.5%
PAHSCO 2016
Domestic 17.3%
Export 82.7%
1980 2002 2016
Export 0% 5% 83%
Domestic 100% 95% 17%
25
Sales Distribution (By Customer Type)
OBM 50.8%
OEM/ODM 49.2%
PAHSCO 2015 PAHSCO 2016
OBM 48.3%
OEM/ODM 51.7%
OEM/ODM OBM Total
789M 816M 1.6B TWD
OEM/ODM OBM Total
871M 812M 1.7B TWD
26
Sales Distribution (By Customer Type)
OBM 50.6%
OEM/ODM 49.4%
PAHSCO 1Q2016 PAHSCO 1Q2017
OBM 50.4%
OEM/ODM 49.6%
OEM/ODM OBM Total
223M 228M 451M TWD
OEM/ODM OBM Total
210M 214M 424M TWD
27
Sales Distribution (By Currency Type)
JPY
18%
TWD
17%
CNY
12%
Euro
5%
PAHSCO 2016
USD 48%
JPY
16%
TWD
19%
CNY
12%
Euro
5%
PAHSCO 2015
USD 48%
28
Sales Distribution (By Currency Type)
JPY
18%
TWD
18%
CNY
11%
Euro
5%
PAHSCO 1Q2017
USD 49%
JPY
18%
TWD
17%
CNY
13%
Euro
4%
PAHSCO 1Q2016
USD 47%
29
Sales by Quarter
Unit: Thousand (NTD)
YEAR 2009 2010 2011 2012 2013 2014 2015 2016 2017
Q1 246,505 299,794 325,890 342,607 357,542 371,812 363,487 452,010 424,871
Q2 282,752 319,461 372,298 341,626 382,503 362,975 353,704 452,428
Q3 294,085 310,737 342,243 369,016 351,901 376,479 439,502 419,800
Q4 311,086 318,310 303,188 385,459 351.950 395,398 464,871 365,426
Total 1,134,428 1,248,302 1,343,619 1,438,708 1,443,896 1,506,664 1,621,564 1,689,664 424,871
Growth 18.1% 10.0% 7.7% 7.1% 0.4% 4.4% 7.6% 4.2% -6.0%
Gross Margin
39.4% 41.1% 38.7% 39.2% 37.5% 36.1% 36.9% 36.5% 32.6%
30
Financial Information
ITEM 2009 2010 2011 2012 2013 2014 2015 2016
1Q
2016
1Q
2017
EPS 4.24 5.44 5.39 4.77 4.88 4.95 5.32 5.04 1.57 0.92
ROE % 22.71 27.85 22.62 20.28 19.49 18.55 18.18 15.80 5.01 2.74
ROA % 16.15 22.02 18.93 16.75 16.06 15.33 14.32 11.13 3.80 1.83
Net Profit
Margin 20.69 27.27 24.06 21.90 22.29 21.70 21.66 19.69 22.98 14.34
Net Cash
per Share 8.00 9.84 10.44 12.40 12.64 11.82 6.81 - 6.28 -
* Ignore the evaluation loss of financial liabilities
*2011Pay-out: $3 Cash Dividend and $1.00Stock Dividend presented at the Shareholders’ Meeting.
*2012Pay-out: $4 Cash Dividend presented at the Shareholders’ Meeting .
*2013Pay-out: $2.5 Cash Dividend presented at the Shareholders’ Meeting.
*2014Pay-out: $2.5 Cash Dividend presented at the Shareholders’ Meeting.
*2015Pay-out: $2.5 Cash Dividend presented at the Shareholders’ Meeting.
*2016Pay-out: $2.5 Cash Dividend presented at the Shareholders’ Meeting.
31
Medical Device Market Size in China
Market size Market growth rate Unit: Million (USD)
Source: BMI Espicom(2015); 工研院IEK(2015)
CAGR 14.8%
32
Revenue
(NTD) 2009 2010 2011 2012 2013 2014 2015 2016 1Q2016 1Q2017
PAHSCO
Total
(Billion) 1.13 1.25 1.34 1.44 1.44 1.51 1.62 1.69 0.45 0.43
China
(Million) 73 83 115 130 143 165 194 194 58 51
% 6.5 % 6.7 % 8.5 % 9.0 % 9.9% 11.0% 12% 11.5% 12.9% 11.9%
73 83
115 130
143 165
194 194
2009 2010 2011 2012 2013 2014 2015 2016
Unit: Million (NTD)
38%
-0.4%
14% 13%
Our Sales in China
10%
yoy
15% 18%
-13%
33
Areas covered
Total
Areas *31 Provinces
+ Taiwan
+ Hong Kong
+ Macau
34
Areas
Covered
23
Tier 1
Distributor
12
2017
Target
Areas
8 Provinces
• Fujian • Sichuan
• Shanghai • Henan • Sandong
• Tibet • Oinghai • Yunnan
Our Distribution in China
34
Thank you
for your attention & patience!
*For your information, PAHSCO presentation will be updated quarterly on the official website: http://www.pahsco.com.tw/investment-23