Q3FY16 Results Briefing

February 2016 1

Important Notice

2

This presentation contains forward-looking statements which can be identified by the context of the statement and generally arise when the Company is discussing its beliefs, estimates or expectations. Such statements may include comments on industry, business or market trends, projections, forecasts, and plans and objectives of management for future operations and operating and financial performance, as well as any related assumptions. Readers of this presentation should understand that these statements are not historical facts or guarantees of future performance but instead represent only the Company’s belief at the time the statements were made regarding future events, which are subject to significant risks, uncertainties and other factors, many of which are outside of the Company’s control. Actual results and outcomes may differ materially from what is expressed or implied in such forward-looking statements. The Company cautions readers not to place undue reliance on any forward-looking statements included in this presentation, which speak only as of the date made; and should any of the events anticipated by the forward-looking statements transpire or occur, the Company makes no assurances on what benefits, if any, the Company will derive therefrom.

Ms. Chan Hui Si huisi@cogentcomms.com

Mr. Gerald Woon woon@cogentcomms.com

Tel: + 65 6704 9288

Agenda

• About Valuetronics

• Q3FY16 Financial Highlights

• Business Outlook

• Questions & Answers

3

About Valuetronics - Corporate Profile

4

At a Glance

• Electronic Manufacturing Services (“EMS”) provider established in 1992 in Hong Kong

• Listed on Main Board of SGX on 28 March 2007

• Production facilities in Daya Bay & Danshui Town, Guangdong, PRC (60 minutes from Shenzhen)

Integrated EMS Provider

• Engineering Design & Development

• Plastic Injection Moulding

• Tool Design and Tool Fabrication

• Metal Stamping & Machining

• Printed Circuit Box Assembly

• Box Build Assembly

• Supply Chain Management

Accreditations

• ISO9001:2000, TL9000, ISO14001:1996 &

ISO13485; TS16949

Employees • As at 31 Dec 2015 around 4,000

Bloomberg Code VALUE.SP

Reuters Code VLUE.SI

ISIN Code BN2

Issued shares (M) 380

Mkt cap (SG$M) (2 Feb 2016) 146.3

Share price (SG cent) (2 Feb 2016) 38.5

Avg volume 3-mth ('000) 290

52 wk range (SG $) 0.35 – 0.53

25.8%

69.1%

5.1% Shareholding

Executive Directors

Public Float

HSBC Global Investment Funds

Business Model

5

A Premier Design and Manufacturing Partner

Proactive deployment of Design & Development capabilities

Integrated Manufacturing Services •SMT •Wire bonding •FG assembly •Metal part machining •Injection molding •Tool design & fabrication

Engaging in customers value chain

•Design for manufacturing •Design & build test fixtures •Rapid prototyping •Regulatory compliances •Supply chain management Services

Design & Development •Mechanical & electrical engineering design from concept to mass production •Better manufacturability with enhanced features & lower cost •Software development •Industrial design

Value Add

Key Milestones

6

1992 2002 2003 2005 2007

Headquartered in Hong Kong with manufacturing

facilities in Danshui Town, PRC

Use of ROHS equipment and accredited with

TL9000

Adopted work cell management &

updated to ISO9001:2000

Became preferred supplier of a Dutch

MNC for its consumer lifestyle

segment

Listed on SGX-Mainboard & Commenced

construction for Daya Bay Facility

2008 2008 2009 2012 2015

Became preferred supplier of a Dutch MNC for its Lighting

segment

Completed Phase 1 construction of

Daya Bay Facility

Opened Daya Bay Facility

Acquired medical business

Celebrated 20th anniversary with revenue crossing

HK$2 Billion

Accredited with TS16949 quality

management system

Bird’s-eye View - DYB Facility

7

• Land use rights acquired in 2006

• Total site area > 110,000 sq m

Customer & Product Portfolio

• Ability to accommodate customers requirement for various volume, mix and complexity

• Customer base ranged from emerging enterprises in Northern American (low-volume complex custom product) to Top Global MNC (high-volume standards product)

8

Industrial & Commercial Electronics

Consumer Electronics

Industrial & Commercial Electronics

9

Transaction Printer for Slot, POS & Teller Station Machines

Nasdaq-listed Company

Thermal Label Printer for Industrial & Commercial Use

Printers Temperature Sensing Devices

Cold Chain Temperature Monitor for Industrial & Commercial Use

Unit of a NYSE-listed MNC

Company owned by a UK PE Fund

Electronic Thermostats

Global Brand owned by NYSE-listed MNC

Industrial & Commercial Electronics (Cont’d)

10

Telecom Product for Business Application

Taiwan-listed Company

Toronto-listed Company

High Precision GPS for Industrial Use

Designing and manufacturing innovative and cost-effective GNSS products on marine, land survey, construction, mapping, and OEM solutions

High Precision GPS

Company Based in North America

Industrial & Commercial Electronics (Cont’d)

11

Unit of a STO-listed MNC

Access Card Readers

Others

In-vitro Diagnostic Medical Equipment for Testing Human Tissue Samples

Electronic products for Automotive industry

Consumer Electronics

12

15W and 40W Bug Zappers

Company owned by PE Fund

(Listed in Amsterdam & New York)

PCBA for Shavers & Electric Toothbrushes for Consumer Use

Consumer Lifestyle Division of a Dutch MNC

Q3FY16 Financial Highlights

13

Financial Highlights

14

HK$’M 9MFY16 9MFY15 %

Change Q3FY16 Q3FY15

% Change

Revenue 1,511.1 1,850.5 -18.3 434.5 596.2 -27.1

Gross Profit 226.0 246.0 -8.1 70.5 83.7 -15.8

Gross Profit Margin 15.0% 13.3% 1.7 pts 16.2% 14.0% 2.2 pts

Net Profit for the period 90.9 109.4 -16.9 25.2 39.2 -35.8

Net Profit Margin 6.0% 5.9% 0.1 pts 5.8% 6.6% -0.8 pts

Revenue Contribution

15

43.7% 56.3%

9M FY16

Consumer Electronics (“CE”)

Industrial and Commercial Electronics (“ICE”)

HK$850.9M HK$660.2M

32.5%

67.5%

Q3 FY16

HK$293.5M

62.1%

37.9%

9M FY15

HK$702.3M

HK$1,148.2M 60.6%

39.4%

Q3 FY15

HK$141.0M

HK$235.0M

HK$361.2M

Revenue Trend

16

1,263.7

1,683.6 1,581.4 1,653.4 1,473.0

1,148.2

660.2

673.3

604.7 628.8

779.9 956.3

702.3

850.9

-

500.0

1,000.0

1,500.0

2,000.0

2,500.0

FY11 FY12 FY13 FY14 FY15 9MFY15 9MFY16

Consumer Electronics Industrial & Commercial Electronics

2,433.3

HK$’ M

1,937.0

2,288.3 2,429.3

1,511.1

2,210.2

1,850.5

Quarterly Revenue

17

382.7 383.9 402.4 361.2 325.5

280.2 239.0

141.0

230.6 242.7 225.2 235.0

253.4 269.8

287.5

293.5

0

100

200

300

400

500

600

700

Q4FY14 Q1FY15 Q2FY15 Q3FY15 Q4FY15 Q1FY16 Q2FY16 Q3FY16

Consumer Electronics Industrial & Commercial Electronics

626.6 613.3 627.6

596.2 578.9 550.0

434.5

526.5

HK$’ M

Revenue by Shipment Destination

44.8% 53.9% 54.5%

37.5%

34.3% 36.6%

17.7% 11.8% 8.9%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

FY14 FY15 9MFY16

Europe

China & Asia Pacific

North America

18

Gross Profit & Net Profit Trend

85.5

80.3 82.0 83.7 85.4

78.5 77.0

70.5

39.5 33.9 36.3

39.2 39.8

33.5 32.2

25.2

13.9%

12.8% 13.1%

14.0% 14.8% 14.3% 14.6%

16.2%

6.4% 5.4% 5.8%

6.6% 6.9% 6.1% 6.1% 5.8%

0.0%

2.0%

4.0%

6.0%

8.0%

10.0%

12.0%

14.0%

16.0%

18.0%

0.0

10.0

20.0

30.0

40.0

50.0

60.0

70.0

80.0

90.0

Q4FY14 Q1FY15 Q2FY15 Q3FY15 Q4FY15 Q1FY16 Q2FY16 Q3FY16

Gross Profit Net Profit GP% Net Profit Margin 19

Market Capitalisation & Net Cash Balance

32

3.5

37

0.3

47

6.2

56

8.4

59

2.2

72

6.6

80

8.5

82

8.4

15

3.5

13

9.9

98

.2

24

3.7

22

1.6

47

7.9

50

5.8

13

5.8

32

2.2

50

0.5

51

1.4

47

9.3

74

0.3

99

2.7

86

4.4

0.0

100.0

200.0

300.0

400.0

500.0

600.0

700.0

800.0

900.0

1000.0

FY09 FY10 FY11 FY12 FY13 FY14 FY15 9MFY16

NAV Net Cash balance Market Capitalization

68

1.8

HK’M

20

Earnings Per Share & Dividends Per Share

21

25

.5

15

.0

16

.7

34

.2

36

.5

21

.9

40

.6

40

.0

7.8

4.5

7.0

14

.0 17

.0

8.0

20

.0

20

.0

6.1%

11.8%

7.7%

9.8%

11.9%

6.0%

9.8%

0.0%

2.0%

4.0%

6.0%

8.0%

10.0%

12.0%

14.0%

0.0

5.0

10.0

15.0

20.0

25.0

30.0

35.0

40.0

FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15

EPS Dividend per share Dividend Yield

7.5%

We are committed to formal dividend policy of 30-50% payout ratio

HK cents Yield

Share Price S$0.230 S$0.075 S$0.165 S$0.235 S$0.230 S$0.205 S$0.330 S$0.47

Dividend Payout ratio 30.1% 30.0% 41.9% 40.9% 46.6% 36.5% 49.3% 50.0%

Summary of Cash Flows

22

HK$’000 9MFY16 9MFY15 Q3FY16 Q3FY15

Operating Activities

Net cash generated from operating activities 285,155 120,211 164,503 97,469

Investing Activities

Net cash used in investing activities (37,602) (20,246) (118) (16,937)

Financing Activities

Net cash used in financing activities (70,740) (67,346) (676) -

Net increase in cash and cash equivalents 176,813 32,619 163,709 80,532

Effect of foreign exchange rate changes (886) (833) (331) (454)

Cash and Cash equivalents

At beginning of the period 505,847 477,934 518,396 429,642

At end of the period 681,774 509,720 681,774 509,720

Balance Sheet & Key Ratios

23

HK$’M Q3FY16 FY15

Working capital

Inventories 211.9 221.9

Trade Receivables 353.2 517.0

Trade Payables (319.7) (347.4)

245.4 391.5

Net Current Assets 574.5 559.1

Net Cash 681.8 505.8

Net Assets 828.4 808.5

Turnover Days Q3FY16 FY15

Inventory 53.1 38.6

Trade Receivables 74.2 77.7

Trade Payables 80.1 60.4

Key Financial Ratios

24

# Share price as at respective period end date SGD/HKD Ex rate: Q3 FY16: 5.48; Q4 FY15: 5.64

Q3FY16

FY15

Price (SGD) # 0.415 0.47

NAV per share (SGD) 0.40 0.38

Cash per share (SGD) 0.33 0.24

Cash to Mkt Cap Ratio 79% 51%

Q3FY16

FY15

Current ratio 1.8 1.8

ROE 12.2% 18.5%

ROA 6.6% 9.8%

PB ratio 1.04 1.23

Business Outlook

25

Business Review

26

Overview

• No longer dependent on mass market LED light bulbs

• With a widened customer base, ICE continued to grow and mitigated the decline in CE revenue

• Overall gross profit margin improved

• Working capital remained healthy with operating activities generating positive cash flow

ICE

• Achieved double digit growth

• Revenue growth from existing customers and also new revenue stream from production of electronic products for automotive industry

CE

• Finished last orders for mass market LED light bulbs

• Q3FY2016 CE revenue comprised predominantly consumer lifestyle products

• With no more mass market LED light bulbs in production, CE revenue will now comprise products with consumer applications for a portfolio of customers

Business Review

27

Outlook

• Well positioned to take advantage of a widened product portfolio and opportunities in the pipeline

• Remain mindful on the impacts on the overall business which may result from a stronger US dollar, a continuously depreciated RMB and a further slowdown in China’s economy

Questions & Answers

28