SPORTON INTERNATIONAL INC. (6146)

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SPORTON INTERNATIONAL INC.(6146)
2015.6.23.
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(No Transcript)
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Business Domain
A. Mandatory Requirement Government
stipulated standards that need to be passed for
product launch (1).EMC(Electro-Magnetic
Compatibility) (2).Safety Standard (3).RF
Telecom B. Compliant Requirement Technology
and communication standards required by Telecom
Operators/Carriers Mobile Device (2G/3G/3.5G/4G)
Inspection Certification (1).OTA (Over The
Air) Inspection (2).SAR(Specific absorption rate)
Inspection (3). EN50332-1, -2 Sound Pressure (4).
Radiation Tolerance Disturbance Radio Frequency
Inspection Certification (1).MIMO (2).802.11ac
802.11ac wave 2 Others Automobile, IOT, NFC
EMI Shielding Components (10)
Sales of EMI shielding components as complement
to inspection business, providing customer with
solution consulting.
Inspection Certification (90)
Extremely focus on its core business, a hidden
champion in the inspection industry, one of the
very few company in the world being able to offer
both inspection services and EMI shielding
components
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Core competitive advantages
Sporton key competitiveness on electronic
product inspection 1.Speed Sufficient inspection
capacity 2.Capability Strongest testing ability
Most Service LocationsTaiwan 8, Korea 1, China
3. Sporton is one of the very few global
companies providing complete inspection and
certification services for IT products.
IA Certified by 150 countries.
1st Asian inspection lab authorized by Wireless
Power Consortium (WPC)
One of the very few global co. to provide testing
certification for 200GHZ high speed wireless
and 1st 802.11ac Wave 2 certified lab
The new technology will be first introduced into
the Korean labs, and the testing process
automation and standardization will be completed
in Taiwan laboratories, then send it to the
China factories for mass inspections
100-owned investment International
Certification Co. (Founded in 2013, Net Profit
NT30mn in 2014)
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Wide Applications
Inspection Category A . IT, communication, and
mobile appliance products including NB, mobile
phones, tablets, networking products (i.e.
wireless Routers, switch), and smart home
appliances. B . Automobile, motorcycle, and
related components Sporton is the only one
company in Taiwan capable in offering EMI testing
for the whole vehicle.
Most complete testing capability globally
Total Solution One Stop Shop
Over 20 yrs industry experience
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Gross margin and net profit margin over the last
6 years
Gross margin maintain at 40 over the last 6 years
NoteReveal Consolidated Operation Results since
2012
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Business Operation
EPS , Stock/ Cash Dividend for the last 6 years
Dividend Allotment was over 80 of the net profit
for the last 6 years
Cash Dividend 4.0 4.95 4.8 4.0 4.3 5.8
Stock Dividend 0.2 0.05 0.2 0.1 0.2 0.2
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Business Operation
Consolidated Income Statement (1Q 2015)
(NT mn) 1Q 2015 1Q 2014 YoY
Total Revenue 753 100 620 100 21.7
Gross Profit 343 46 274 44.2 25.4
Operation Expenses 149 20 130 21.0 14.7
Operating Income 194 26 144 23.2 35.1
Pre-Tax profit 207 28 147 23.7 41.2
Net Profit 166 22 113 18.0 45.7
EPS (NT) 1.86 1.31 42
In 1Q 2015, total Revenue of up 21.7 YoY,
mainly due to the inspection services growth, so
the pre-tax profit reach 41.2 YoY
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Business Operation
Comparison of the proportion of the revenue
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Chinese Brands Rise Buoyant Chinese market,
Chinese revenue 50 annual growth
Growth Momentum
Source Gartner

• Chinese local brands quickly rose up by the
  low-price strategy to grab market share, now they
  are developing the mobile phones with multi-
  function and rational price, and rapidly release
  new models to explore the international market.
  Sporton is the major inspection partner for the
  Chinese brands for export.

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4G mobile penetration increases annually and
drives the related testing services booming
Growth Momentum

(1)A substantial increase for 4G/LTE
testing hours from 3G (2)New inspection
orders from the US, Canada, Japan brand
customers (3)First lead in TDD/LTE
inspection equipments to serve the
Chinese customers 4G Bands
FDD(Band1Band28)?
TDD(Band33Band44)? Total 40 Bands for 4G mobile
phone 4-5 Bands for 3G mobile phone
Each band must be tested for OTA and SAR,
so the testing cost should be much higher
Regular 3G mobile phone
US/ Canada 4G mobile Phone
China TDD/LTE mobile phone
4G inspection fees increase over 30
For 4G/LTE mobile comm. products,the testing
hours of OTA,PTCRB will be up over 50
Standard Test item Test Hour Total test hour
PTCRB(No LTE) 2G/3G 228 228
PCTRCB(withLTE) 2G/3G 234 360
PCTRCB(withLTE) LTE 126 360
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Growth Momentum
First lead in 4G / LTE Advanced and TDD-LTE
inspection services

• Sporton has provided 4G / LTE Advanced Mobile
  testing services in Taiwan and Korean inspection
  and certification laboratories, and introduced
  the TDD-LTE specifications of 4G / LTE mobile
  inspection facilities to serve the Chinese brand
  customers.

Samsung Galaxy Note 4 Launch in Oct. 2014
LG G3 D855 Launch in Jul. 2014
ABI Research CAGR of 4G/LTE Advanced users
will be 295 between 2013 to 2018, reach a total
of 500mn users, accounts for 34 of the total
1.47bn 4G/LTE users.
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4G/LTE mobile comm. Products continuous Growth

• In 2014, handsets still account for a large part
  of the end demand for 4G/LTE market at 73
  however, network CPE product is expected to grow
  by 68 in 2014, up from 42.8 in 2013.
• And in response to 4G/LTE mobile communications
  era, the OTA, SAR and FTA (GCF / PTCRB) will be
  necessary parts of the test items in the 4G/LTE
  network CPE products.
• 802.11ac Wave2 technology can simultaneously
  provide services to multiple devices, and is
  estimated to become the next wave of mainstream
  product

LTE end product types quantity
Total 948
Total 821
Market size of LTE end products
Total 63
TDD LTE Handset
Time
FDD LTE Handset
SourceIEK?MIC?Digitimes
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Comparison of regular and 4G/LTE comm. product
inspections
Growth Momentum
Mandatory Inspection
OTA
Regular Comm. LTE Comm. Avg. Inspection Fees
Mandatory Inspection V V NT1mn
SAR X V NT1mn
OTA X V NT1mn
FTA(GCF/PTCRB) X V NT5mn
SAR
Sporton has over 20 OTA antenna inspection
(including MIMO) labs and equipments, is one of
the best OTA testing capability companies in the
world.
FTA(GCF/PTCRB)
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Growth Momentum
IOT development drives wearable device and smart
home inspection services booming
A. IOT devices have to be built-in wireless
devices or with mobile communication function B.
IOT development drives wearable device and smart
home inspection services booming
A. Wearable devices are majorly for health and
fitness purposes now, and they will be extended
to personal entertainment appliances B. Sporton
has developed the testing technology which
can simultaneously Compliant with MIMO, OTA
and SAR inspection Requirements C. Its very
likely to flourish later this year
A. The testing fees increase substantially on
the traditional IT and home appliances
accounted for 30 of the revenue, which
now built-in wireless communication device B.
Sporton has developed the testing
technology which can simultaneously
Compliant with MIMO, OTA and SAR inspection
Requirements C. Its very likely to flourish
later this year
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Growth Momentum
Wearable device market will grow rapidly in 2H
2015 with significant increasing demand
Its estimated that the global wearable device
market will grow from 92 mn sets in 2015 to 153mn
sets in 2020, while China and the Asia Pacific
market growth rate are the most obvious
SourceNPD Displaysearch
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Growth Momentum
Smart Home Appliances Rise

• IDC forecasts the CAGR of smart home market will
  be 17.74 between 2013 to 2020, and the market
  size will reach US51.77bn in 2020.

Source nkfust.edu.org.tw
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Future Prospects
Capacity Expansion and Inspection Efficiency
Enhancement
Future Operation Development Time Main Item/Contents
Capacity Expansion Project 3Q/2014 1Q/2015 Taoyuan HuaYa New high-end mobile phones inspection laboratory Hsinchu Expand Wireless Networking inspection lab/ equipments China Qunshan and Shenzhen Expand Mobile and Networking inspection lab/ equipments
Inspection Efficiency Enhancement 1Q/2015 Inspection automation Inspection report computerization Simplify the testing process with strict quality control on internal processes
Chinese Inspection Lab Ownership 2016 2020 Qunshan Shenzhen
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Future Prospects
Expand China laboratories and Operations
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Future Prospects
Chinese market opportunities
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Future Prospects
New Technology Development

• b? Has gradually incorporated into the new
  mobile/ wireless networking products inspections

A.WPC Can effectively solve the mobile phone
charging problems B. Wireless charger is the
future trend Sporton is the first company
in the world with both AB inspection
capabilities and qualifications
A. High cost inspection items for compliant
requirement B. IA certification requirements are
different among countries, which creates great
opportunities
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Future Prospects
New Technology Development
IHS estimates NFC phone shipments will jump from
275 million sets in 2014 to 1.2 billion sets in
2020
????IHS
Unit mn sets
????IHS
Source IHS
IHS estimates wireless charging industry will
substantially grow from US785 mn in 2014 to
US8.5 billion in 2018
????????2014??7.85????????2018??85???
Unit US bn
Source IHS
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Thank You