3689 UDE

Gary Chen

July 2014

Disclaimer • The information contained in this confidential document ("Presentation") has been prepared by UDE (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 guarantees 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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• We are a global leader in the Ethernet technology applications.

• We are one rare manufacturer that is able to combine automated volume production capability with a high degree of product customization.

• While we are proud of our records of healthy growth in profits and 20%+ ROE, we seek investors who believe in our vision for future growth.

• We are not wedded to any single product, but instead seek to leverage UDE manufacturing management expertise to seek out new business opportunities.

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UDE – young and restless

• Our goal. We aim to achieve over 15% CAGR for our top-line in the next 3-5 years with even faster bottom-line growth. We strike for a structural ROE of 20%+.

• How to get there? – Share gain. Leveraging our core competency – optimizing process

automation and product customization, UDE aims to structurally grow share in the global Ethernet market.

– Margin expansion. We aim to lift our margins structurally through: 1) continued cost cutting from automation, 2) product remix towards higher-margin networking applications.

– Sustainable ROE. Upon completion of our capital raise in 2011-13, we are ready for expansion to capture the growth, structurally maintaining our ROE at 20%+ per annum.

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A new phase of growth

5

Results review and outlook

The UDE strategy

Financial performance

Appendix

6

Results review and outlook

1Q14 results review

• 1Q14 revenues reached a new high UDE’s 1Q14 revenues finished at NT$1.3B, up 15% YoY and 10% QoQ. 1Q14 revenues beat the previous record booked in 3Q13 (refer to the financial section for more details).

• Margins recovered above corporate averages 1Q14 gross margin recovered 2pp sequentially to 27.8% while operating margin was up 3.4pp to 15.2%, both exceeding the corporate averages over 2009-13.

• Bottom-line contraction on one-off Fully diluted EPS however dropped 16% QoQ to NT$1.32 due to a mark-to-market loss. Excluding this one-off item, our 1Q14 net profits were close to NT$2/share.

7

Core operations hit a record

8

• 1Q14 operating profits hit a new high with margins exceeding corporate averages.

Source: company.

2014 outlook

9

Understated demand Customer demand this year progressing ahead of our previous expectation. We are actively building capacity to ease supply shortage.

Pricing pressure Our clients in the PC and consumer space are under pricing pressure, yet our focus on the higher-priced networking should help ease the pressure on blended basis.

Rising Capex We believe that the timing is ripe to increase Capex, given the strong demand outlook driven by networking and consumer segments this year.

Increasing R&D and S&G We will continue to place increased emphasis on the development of advanced products and penetration into these markets.

2014 revenue growth driver

• Consumer will likely outgrow networking this year due to new customer addition, but networking remains our long-term growth driver.

10

Source: company.

Application • PC • Networking • Consumer

Target growth for 2014 • flat • 5-10% • 30-40%

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The UDE strategy

12

Optimizing automation + customization

Differentiated product focus

Keeping up with the cloud

Targeting market share gain

13

Optimizing automation + customization

Differentiated product focus

Keeping up with the cloud

Targeting market share gain

Cost savings from automation (UDPS)

14

More efficient production and higher profitability

39%

62%

-7%

5%

-6%

16%

-2%

16%

-20%

-10%

0%

10%

20%

30%

40%

50%

60%

70%

Growth in number ofoperators

Growth in unit production

2010 v 2009 2011 v 20102012 v 2011 2013 v 2012

0 34

408 483

662

1,078

19%

28% 27% 26%

27% 27%

19%

26%

13% 12%

10%

4% 0%

5%

10%

15%

20%

25%

30%

0

200

400

600

800

1,000

1,200

1,400

2008 2009 2010 2011 2012 2013

NT$ million

Estimated Gross Margin Improvement from TPSReported Gross Margin (includes effects of TPS implementation)Estimated Gross Margin (without TPS implementation)

Source: company.

UDE possesses excellent electromagnetic signal processing and customization capability

Signal Input Signal Filtering System Protection Signal Output

Filter Surge/ESD Protection Integrated Ethernet IC RJ45 LAN Cable

Noise Filtering Signal Purification EMI Control

Protection of networking IC and motherboard

Customized high frequency electromagnetic impedance design to match customer systems

Goal：Maintain high S/N ratio to guarantee complete and rapid signal transmission to the network IC on client motherboard

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Increasing investment in R&D and S&G

16

Robust R&D investment

R&D spending to be increased by 50% over the next two years.

Focus to be on high-end networking products.

Will establish an advanced R&D lab in Taiwan.

Penetrating new markets

Sales & marketing (S&G) outlay to be increased by 30% over the next two years.

New hires to be focused on North American networking market.

Secondary focus is mass market consumer segment in China.

Seek to win share when networking companies introduce new generation products. This generally happens on a 2-year cycle.

Our initial efforts in this area look set to pay off in 4Q14.

Continuing process automation to drive costs down further and lift margins.

Investing in HR to manage future growth

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• With an eye to the next stage of UDE’s growth, we are cultivating teams of veteran employees that will be capable of managing new product initiatives.

Systematic Training SOP: We have established a program of rigorous and systematic training for all UDE operators and technicians.

Apprenticeship Program in Sichuan: We offer 2-year apprenticeships with on-site plant training to students attending our technical college.

• We are pursuing organic product development and M&A, seeking to take small but promising business lines and expand their scale.

Representative principles of soft power

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Employee development

•Training for employees in UDPS methods in Japan and Taiwan. •Work groups are promoted as a team. •Production requirements double with each promotion. •Production lines to eventually have only technicians, no operators.

Work smart

•Discourage frequent overtime. •Show concern for staff contentment on the job. •Emphasize teamwork, communication and efficiency.

Creative destruction

•Overthrow the traditional principles of production. •Do not be satisfied with the status quo.

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Optimizing automation + customization

Differentiated product focus

Keeping up with the cloud

Targeting market share gain

UDE’s market positioning

• UDE positions itself in Ethernet market UDE focuses on the copper connection of the global Ethernet market, where it enjoyed c. 9% market share in 2013 in volume terms.

• ICM is the key focus With key offering of integrated connection module (ICM), UDE aims to gain share within the ICM market and from the discrete segment.

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~ 9% market share in 2013

UDE’s target market

Source: company.

UDE is a rarity

Product offering

Customer base

Wide range of electrical characteristics and structural options Highly customized with low volume production run capability 8,500 active part numbers 4,700 different models produced each month

Low single client risk : 60% of sales from top ten clients No client accounts for more than 15% of sales, only one client accounts for more

than 10%. 1,300 active client accounts.

Industry attributes

Barriers to entry are high RJ45 Jack industry has only a handful of major players These are UDE, Foxconn, Bel Fuse, Molex and Pulse Bel Fuse has the most advanced technology UDE is the largest scale producer and the low-cost leader

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• A high-volume/low-cost leader also offering highly customized products

Most diverse application base of any RJ45 producer

MB / AIO PC Networking Set-Top BOX Server Blu-ray Player / Internet TV

Game Consoles Printer

√ √ √ √ √ √ √

√ √ √ √

√ √ √ √

√ √

√ √

√ √

√ √ √

√ √

22 Source: company.

Selling to global leaders in key product categories

23 Source: company.

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Optimizing automation + customization

Differentiated product focus

Keeping up with the cloud

Targeting market share gain

UDE’s market share and revenue targets

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Penetrate the high-end networking market

Claim share in the mass market consumer segment

Raise global market share to 15% in next 3-5 years

Grow annual revenues to NT$10B in next 3-5 years

61% 46% 45% 35% 29%

23% 23%

25% 34% 38%

16%

31% 30%

31%

33%

0

1,000

2,000

3,000

4,000

5,000

2009 2010 2011 2012 2013

PC Networking Consumer

Networking driving LT revenue growth

NT$M

26

Source: company.

New world to conquer

27

UDE’s 2013 global market share is 9.1%

* Additional addressable market refers to devices that do not currently have RJ45 connections but are expected to incorporate them in the future.

Source: brokers and UDE estimates

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Optimizing automation + customization

Differentiated product focus

Keeping up with the cloud

Targeting market share gain

The concept of cloud

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• Growth in cloud computing means increased market potential for UDE

UDE’s target addressable market

Source: company.

The concept of IoT

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• Internet of things (IoT) appears to be the next big thing, driving new devices used in our daily lives to create new data flows (anywhere, everywhere).

Source: company.

Cloud and IoT to drive potential growth

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Conventional 3C devices

Data flow

transmission

Computer

Consumer

Networking & communication

Internet of things (IoT)

Potential expansion in data flow

Cloud computing

Ethernet

jack market

Potential expansion in jack demand enabled

by IoT that UDE can capture

Source: company.

Digital home appliances Wearable devices

Connected vehicles POS …

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Financial performance

1Q14 % Sales 4Q13 1Q13 Growth (%, QoQ)

Growth (%, YoY)

Sales revenue 1,276 100.0 1,163 1,110 9.8 15.0

Gross profit 354 27.8 299 303 18.3 17.1

Operating profit 193 15.2 137 166 41.3 16.3

Income before tax 150 11.8 144 168 4.0 -10.8

Net income 94 7.4 112 126 -16.0 -25.4

EPS (NT$, wtd. avg) 1.38 1.65 1.86 -16.4 -25.8

EPS (NT$, fully diluted) 1.32 1.57 1.86 -16.0 -29.1

1Q14 P&L (consolidated)

NT$ million

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Note: 1Q14 non-op. includes a one-off mark-to-market loss of NT$46M. Source: company.

84

341 353

444

514

2009 2010 2011 2012 2013

1.65

6.45 6.08 7.08

7.69

EPS NT$ Net income NT$M

11.6

37.0

27.3 24.8

23.7

6.0

18.1

14.2 14.0 13.3

2009 2010 2011 2012 2013

ROE % ROA %

Five-year financial highlight

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Note: 2009 net profit was biased by an NT$122M one time non-cash writedown of goodwill. Source: company.

2009 2010 2011 2012 2013

Sales revenue 1,993 3,094 3,486 3,876 4,692

Gross profit 553 820 890 1,063 1,284

OP profit 268 472 454 528 664

Income before tax 130 409 481 539 674

Net income 84 341 353 443 514

FD EPS (NT$) 1.60 6.41 5.76 6.56 7.31

Five-year P&L (consolidated)

NT$ million Growth YoY (%)

2009 2010 2011 2012 2013

27.2 55.2 12.7 11.2 21.1

84.0 48.3 8.5 19.5 20.8

114.0 76.1 -3.8 16.3 25.7

-9.0 215.4 17.7 12.0 25.1

-28.7 305.1 3.7 25.5 16.0

-34.7 301.3 -10.1 14.0 11.4

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Source: company.

NT$ million 2009 2010 2011 2012 2013

TOTAL ASSETS 1,565 2,194 2,784 3,567 4,356

Cash 314 275 751 1,099 1,258

NR & AR 580 706 757 918 1,184

Inventory 255 413 435 715 881

Non-current assets 332 605 675 629 785

TOTAL LIABILITIES 774 1,142 1,248 1,526 1,977

Bank loans 178 237 426 419 417

NP & AP 233 352 303 433 476

Other payables 268 365 427 570 695

TOTAL EQUITY 791 1,052 1,537 2,041 2,340

Capital 527 532 614 676 676

Additional Paid-in capital 112 112 323 568 582

Retained earnings 149 426 600 828 1,091

Five-year balance sheet (consolidated)

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A/R turnover days 86 76 77 79 82

Inventory turnover days 65 54 60 75 84

A/P turnover days 46 47 46 48 48

YOY (%)

2009 2010 2011 2012 2013

25.9 40.2 26.9 28.1 22.1

119.5 -12.5 173.3 46.3 14.4

60.1 21.6 7.4 21.2 28.9

-2.2 61.6 5.4 64.4 23.1

-9.4 82.3 11.6 -6.8 24.8

31.8 47.6 9.2 22.3 29.6

2.9 32.9 79.9 -1.7 -0.3

78.5 50.8 -13.7 42.6 10.1

49.1 36.1 16.9 33.4 22.0

20.6 32.9 46.1 32.9 14.6

9.2 0.9 15.4 10.1 －

154.0 0.8 187.4 75.8 2.4

21.4 186.6 40.6 38.2 31.7

Source: company.

2011-13 dividend payout

( NT$ Million ) 2011 2012 2013

Net income 353 444 514

Cash dividend 215 257 306

Dividend p/s (NT$) 3.5 3.8 4.5

Cash yield (%) 6.7*1 5.3*2 4.2*3

Payout ratio (%) 61% 58% 60%

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Notes: 1. 2011 yield is based on UDE’s closing share price on July 23, 2012, the day before ex-dividend day. 2. 2012 yield is based on UDE’s closing share price on July 5, 2013, the day before ex-dividend day. 3. 2013 yield is based on UDE’s closing share price on July 11, 2014, the day before ex-dividend day.

Source: company.

• We pledge that our primary focus

will be the maximization of returns to our shareholders via the profitable long-term growth of our core business

• We aim to sustain revenue and earnings growth superior to that of our peers

• We intend to maintain a cash dividend payout in excess of 50%

Our commitment to shareholders

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Appendix

World No. 2 in ICM revenues

Founded in 2005

Ticker: 3689 TT

4,300 full-time employees

Dedicated supplier of integrated RJ-45 ports

2013 revenue: NT$4.7B

Headquarters: Taoyuan, Taiwan

Deyang, Sichuan, China plant: High-volume production

Dongguan, Guangzhou, China plant: Product and automation R&D, high value- added production

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RJ45 Revenues (US$m)

Note: Bel Fuse acquired RJ45 port business of TE Connectivity in March 2013. This chart includes the TE Connectivity revenues in Bel Fuse’s total revenues.

0 50 100 150 200 250

Source: company.

Assembly－UDPS implementation ~2008 2008~09 2010~12 2013~14

Linear line 70~130 OPs

U line implementation 25~30 OPs

Small U line 8~12 OPs

Advanced U line 3~5 OPs

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OP Production line PPH Capacity/hr

Linear line 80 1 10 pcs 800 pcs

U line 80 10 (8 P/line) 80 pcs 6,400 pcs

Source: company.

Manual winding vs. auto winding

Twisting Winding Assembly Process Complete

Hourly output Defect Rate

Manual winding 50 pcs 2-4%

Auto winding 650 pcs Below 0.2%

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A pictorial illustration of the manual winding process

Source: company.

Experienced and stable Int’l mgmt team

Chris Chen, President 21-yrs experience Vice President, SpeedTech Manager of Mfg Technology, Delta

Justin Chang Vice President of Guangdong Factory 21-yrs experience SpeedTech KunShan Plant Manager

Tony Huang Executive Assistant to the Chairman 19-yrs experience CFO, Technology Quartek

Eric Shih, Head of Sales 17-yrs experience Sales Manager, SpeedTech Supervisor – Sales, Delta Electronics

Elton Wu CFO 19-yrs experience Accounting Manager, Delta Electronics

Abel Lu Vice President of Sichuan Factory 26-yrs experience SpeedTech Dongguan R&D Manager

Alan Wang Head of Audit and Head of IR 19-yrs experience TongLung Industry, Executive Assistant to the Chairman

Abulla Yu Head of R&D 17-yrs experience Vice Manager of R&D, Delta Electronics

Gary Chen Founder and Chairman Over 25-yrs experience Vice Chairman and President, SpeedTech

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Q&A

Thank you very much!

For more information regarding UDE www.ude-corp.com

For all inquiries, suggestions, and comments

service@ude-corp.com