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Promise Tech. (3057) Business operation and strategy for Q1 of 2014
Speaker:James Lee
Chairman / CEO
Date: May 26, 2014
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Disclaimer
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• PROMISE’s statements of its current expectations are forward-looking statements subject to significant risks and uncertainties and actual results may differ materially from those contained in the forward-looking statements.
• Except as required by law, we undertake no obligation to update any forward-looking statement, whether as a result of new information, future events, or otherwise.
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Agenda
• Current status
• Finance
• Market
• Prospect
• Conclusion
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Current status (1)
Source: Gartner Magic Quadrant for General Purpose Disk Arrays, 2013
Ab
ility
to
exe
cute
Completeness of vision
Challenger Leaders
visionaries Niche players
2014
Strategy Partner:
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Current status (2)
中國分公司 Sales & Marketing Engineering Post service & support
喬鼎資訊 Sales & Marketing Engineering Manufacturing Quality Assurance Traded at TAIEX
歐洲暨中東分公司 Sales & Marketing Post service & support Logistic Hub
美國分公司 Sales, Marketing Engineering Quality Assurance Post service & support
Employee size ~ 500 R&D ~ 230 (46%): US, Taiwan, China S&M ~ 90 (18%)
PROMISE Dubai
PROMISE Japan
PROMISE Germany
Taiwan Head Quarter : Hsinchu, Taipei, Kaohsiung
N. America Office : Silicon Valley, California
EMEA Offices : The Netherlands, Germany, Dubai
Japan Office : Tokyo
China Offices : Beijing, Shanghai
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Current status (3)
Components
Platform
Solution
<= By 2000
.. Speed
<= 2000-2010
.. Security : RAID
<= 2010+
.. Solutions :
Software Define Storage,
Virtualization & Applications
.. Scalability
Promise : Past/Current/Future R&M/Survailance/Cloud
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Finance: I/S 1Q 14, 2Q/4Q 13 (1)
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(In NT$ Millions) 1Q14 4Q13Quarterly
Change 1Q13Yearly
Change
Net Revenue 885 960 -7.9% 852 3.8%
Gross Margin 43.1% 42.5% 0.62ppts 39.7% 3.38ppts
Operating Expenses 308 303 1.4% 267 15.3%
Operating Margin 8.3% 10.9% 8.4%
Net Income 83 98 -15.1% 65 28.1%
Net Profit Margin 9.4% 10.2% -0.80ppts 7.6% 1.79ppts
EPS(NT$) 0.52 0.66 (0.14) 0.44 0.09
ROE 14.6% 20.5% 15.7%FX rate(NT$/US$) 30.272 29.689 29.481
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Finance – Revenue analysis (2)
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Finance – Operation expense analysis (3)
2,400
2,500
2,600
2,700
2,800
2,900
3,000
3,100
Q1-13 Q2-13 Q3-13 Q4-13 Q1-14
2,668
2,895
2,962
3,034 3,076
Operation Expense(NT$M)
15%
1%
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Finance – Margin (4)
Unit:NT$ M / Margin rate
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338
387 392 408
381
39.7%
42.7%
43.7%
42.5%
43.1%
37%
38%
39%
40%
41%
42%
43%
44%
45%
100
150
200
250
300
350
400
450
Q1-13 Q2-13 Q3-13 Q4-13 Q1-14
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Finance – Net profit (5)
Unit:NT$ M / Net profit rate
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Finance –B/S and KPI (6)
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Amount % Amount % Amount % Amount % Amount %
Cash & Marketable Securities 733 24 733 24 733 24 422 15 412 14
Notes & Account Receivable 238 8 238 8 238 8 407 14 341 11
Inventories 639 21 639 21 639 21 732 25 852 28
Restricted Assets 135 4 135 4 135 4 235 8 235 8
Net PP&E 427 14 427 14 427 14 445 15 472 16
Defferred Expenses 398 13 398 13 398 13 429 15 449 15
Prepayment & Other assets 514 17 514 17 514 17 230 8 237 8
Total Assets 3,084 100 3,084 100 3,084 100 2,900 100 2,998 100
Total Liabilities 1,259 41 1,259 41 1,259 41 1,301 45 1,433 48
Total Shareholders' Equity 1,825 59 1,825 59 1,825 59 1,599 55 1,565 52
Key Indices
AR Turnover Days
Inventory Turnover Days
Current Ratio(X)
Acid Ratio(X)
*Weighted average outstanding shares were 147,867,004 units at 9/30/2013
*Financial data are not audited by CPA.
(In NT$ Millions)1Q12
40
3Q12
44
3Q13
237,828
0.570.70
159
1.47
153
1.56
656,020
1.83
1.11
3Q13
237,828
3Q13
237,828
656,020
1.83
1.11
656,020
1.83
1.11
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Market – Strategy (1)
Market demand
Customer oriented
Brand : ODM ; Sales portion ~ 50 : 50 13
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Video Surveillance Rich Media Cloud & Datacenter
Market – 3 Target segment (2)
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VTrak series
Broadcasting, Post Production, Archiving, Replication and 4K/8K Video
Market – Rich Media (3)
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Market – Video Surveillance Storage for NVR (Network Video Recorder) (4)
Airports
Banks
Casinos
Governments
Highways
Hospitals
Metro & Trains
Mines
Oil companies
Prisons
Shopping
malls
Warehouses EcoSystem Partners Security
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Market – Cloud / DataCenter (5)
• CERN’s Data Centers • Academia Sinica Grid Computing Center (ASGC) 17
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2014 Growth engine
• 4 new products launched in 2013
− Surveillance: VessA
− R&M: Vtrak A class; Pegasus 2 (4K ready)
− Cloud: FileCruiser
• New geography / customer acquisition
− South America / Canada / Mid East / Africa / Russia
− New ODM customers acquisition
• New ISV alliances
− Asset management in R&M market
− Backup applications in R&M and Cloud market
− VMS certifications
− Big Data partners engagement
• Solution team setup
Confidential
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Conclusion
Promise business guidance
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Envisioning the trends, seizing the moment and executing Enabling PROMISE to become a world-class storage solution provider
Cultivating markets, developing talent, and expanding our technology Developing fully integrated technology and training international talent are key parts of our goal of becoming one of the top three in the market
Creating brand value, growing the value of our solutions, and building win-win-win situations
Applying the demands of the market to create customer oriented solutions and enhanced service to build brand value and grow our sales and value of our production Creating win-win-win situations by pursuing the mutual satisfaction of all our employees, customers, and shareholders
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Thank You!