Serial System Ltd Corporate Presentation 28 April …...2012/04/28 · Mumbai Chandigarh Chennai Nashik Secunderabad Vietnam (2) Ho Chi Minh Hanoi Philippines Seoul ChangWon Gwang

© Serial System Ltd 2012 / Page 1© Serial System Ltd 2012 / Page 1

Serial System LtdCorporate Presentation28 April 2012

www.serialsystem.com


Outline

� Corporate Overview

� Financial Highlights

� Business Highlights

- Our Core Business

Electronic Components

Distribution

- Other Businesses

� Strong Prospects

Vision

To be the leading electronic componentdistribution partner, known for our dynamicdemand creation activities, vast networkand strong local expertise.


Corporate Overview



>> Mission

To provide a wealth of growth opportunities for our stakeholders.

Our PartnersTo our business partners, we help to shorten their time to market by providing them with the market insights.

Our StaffBy empowering our staff with the right resources and looking after their well being, we help them to be their best atwork. We also offer them many avenues to grow.

Our ShareholdersWe will continue to make steady progress in every aspect of our business and to provide our shareholders withconsistent and favourable dividend yields.

Our CommunityBy staying in touch with the community, we are able to contribute in ways that are close to their needs.

>> Values

Progressiveness is derived from the drive to achieve our target and the courage to change for the better.

Empowerment is widely practiced to encourage our staff to make decisions independently.

Teamwork is about striving towards a common goal in one spirit – despite our cultural or individual differences.

Efficiency arises from working smart, doing our work well, and using our resources effectivelyto serve our customers and suppliers well.

Mr Derek Goh,Founder, Executive Chairman & Group CEO


SERIAL

listed in 1997

The largest electronic

component distributor

listed on SGX

Rank among market leaders in Korea and Greater China

market

Wide products range and Diversified customers portfolio

One of the largest Asian geographical

presence (in term of offices) in the

electronic distribution

industry

Total Shares906 million

Free Float 51%Current Share Price S$0.128

PE 8.53

FY11 1Q12Greater China 55% 56%South Korea 21% 20%South East Asia and India

17% 16%

Taiwan 7% 8%

Key Markets


Serial System Ltd

ElectronicComponents Distribution

100%Serial Microelectronics

Pte Ltd(Singapore)


(HK) Limited(Hong Kong)


(Shenzhen) Co.,Ltd(China)

100%New Trend Technology Development Limited

(Hong Kong)

100%New Trend Technology Development Limited

(Hong Kong)98.2%Serial Microelectronics

Korea Limited(South Korea)

74.02%Bona Technology Inc.

(Research & Development)(South Korea)

100%Taein System Inc.

(South Korea)

100%Taein System Inc.

(South Korea)94.3%

Serial Microelectronics Inc.

(Taiwan)

100% Teampal Enterprise

Corp. (Taiwan)

100% Teampal Enterprise

Corp. (Taiwan)

100%New Chinese Corporation

(Samoa)

100%New Chinese Corporation

(Samoa)

100%Bridge Electronics

(Shenzhen) Co., Ltd(China)

100%Bridge Electronics

(Shenzhen) Co., Ltd(China)

100%Intraco Technology Pte

Ltd(Singapore)

99%PT Intraco Technology

(Indonesia)

99%PT Intraco Technology

(Indonesia)

35.04%Bull Will Co., Ltd

(Taiwan)

Other Businesses

100%Serial Investment Pte Ltd

(Property Investment & Rental)

(Singapore)

100%Serial Investment

(Taiwan) Inc.

(Property Investment & Rental)

(Taiwan)

100%SCE Enterprise Pte Ltd

(Investment Holding)(Singapore)

100%Contract Sterilization Services

Pte Ltd(Medical Device Distribution)

(Singapore)

65%Serial Multivision

Pte Ltd(Media & Hospitality Solutions)

(Singapore)


(Thailand) Company Limited

(Thailand)


(Thailand) Company Limited

(Thailand)

45%Globaltronics International

Pte Ltd(Electronic Product Trading)

(Singapore)

80%Agricola Pte Ltd

(Dormant)

80%Agricola Pte Ltd

(Dormant)

As at 28 April 2012


Financial Highlights



-

100.0

200.0

300.0

400.0

500.0

600.0

700.0

800.0

FY01 FY02 FY03 FY04 FY05 FY06 FY07 FY08 FY09 FY10 FY11 1Q11 1Q12

77.9

165.5

324.8 313.6 303.7

364.4

476.2 510.6

556.5

746.2 770.3

189.8 182.0

Revenue (S$' million)

-4%

3%


Serial System Revenue (US$' million)Asia Pacific Semiconductor Revenue (US$' billion)

Source : World Semiconductor Trade Statistics/ Semiconductor Industry Association

Serial out-performing the Industry

13%


-

50.0

100.0

150.0

200.0

250.0

300.0

350.0

FY01 FY02 FY03 FY04 FY05 FY06 FY07 FY08 FY09 FY10 FY11 1Q11 1Q12

3.4 14.4

31.8

57.0

81.0

115.9

180.8 196.3

219.0

322.3

344.1

78.5 81.8

Greater China Revenue (US$' million)

6.8%

4.2%


-

5.0

10.0

15.0

20.0

25.0

30.0

35.0

40.0

5.8

14.9

18.7 20.2

14.0

25.3

39.4

8.310.8

0.0

1.0

2.0

3.0

4.0

5.0

6.0

7.0

8.0

9.0

0.001

3.1

5.1 5.5

8.6 7.9

2.2 1.8

India Revenue (US$' million) Taiwan Revenue (US$’ million)

- 8%

56%

31%- 16%


33.5

35.8

41.5

46.7 48.6

69.4 71.8

17.1 17.1

11.0%

9.8%

8.7%9.1%

8.7%

9.3% 9.3%9.0%

9.4%

-

10.0

20.0

30.0

40.0

50.0

60.0

70.0

80.0

0.0%

2.0%

4.0%

6.0%

8.0%

10.0%

12.0%

FY05 FY06 FY07 FY08 FY09 FY10 FY11 1Q11 1Q12

GP GP%

Gross Profit & Gross Profit Margin(S$’ million)


-

5.0

10.0

15.0

20.0

25.0

30.0


1.0

1.4

13.4

11.6

12.8

27.7

24.9

5.6 5.1

Include a S$7.1 m gain on disposal of the entire interests in a Taiwan listed company

EBITDA (S$’ million)

116%

-10%

-9%


(6.0)(5.0) 0.2

6.0

7.5

16.2

12.7

3.2 1.8

-2.0%

-1.4%

1.5%

1.2%1.3%

2.2%

1.6%1.7%

1.0%

-2.5%

-2.0%

-1.5%

-1.0%

-0.5%

0.0%

0.5%

1.0%

1.5%

2.0%

2.5%

(8.0)

(6.0)

(4.0)

(2.0)

-

2.0

4.0

6.0

8.0

10.0

12.0

14.0

16.0

18.0


Gain on disposal of entire interests of a Taiwan listed company Net Profit/(Net loss) Net Profit Margin (%)

7.1

7.3

Impairment losses on trade debts (S$8.4 m)

Net Profit & Net Profit Margin(S$’ million)

-43%


Maintaining Healthy Current Ratio

128.6 134.5

148.5

114.2

161.0

223.7

283.8

268.8

89.1 86.1

90.7

63.7

104.3

155.4

191.7

175.2

1.4

1.6 1.6

1.8

1.5

1.4 1.48

1.53

-

0.2

0.4

0.6

0.8

1.0

1.2

1.4

1.6

1.8

2.0

-

50.0

100.0

150.0

200.0

250.0

FY05 FY06 FY07 FY08 FY09 FY10 FY11 1Q12

Current Assets Current liabilities Current Ratio


85.8 83.2

80.0 81.0

93.5

110.9

128.9 129.2

40.1

34.4

22.0

14.9

25.6

48.3

92.6

71.2 47%

41%

27%

18%

27%

44%

72%

55%

0%

10%

20%

30%

40%

50%

60%

70%

80%

-

20.0

40.0

60.0

80.0

100.0

120.0

140.0


Shareholders' Equity Net Borrowings Net Gearing Ratio

Net Gearing Ratio


55

58

46

41

38

38

55

71

44

52

42

32 27

31

36

40

58 61

53

42 40

44

51

52

69 67

57

51 51 51

70

84

25

35

45

55

65

75

85

95


Trade Receivable Turnover (days) Trade Payable Turnover (days) Inventory Turnover (days) Cash Conversion Cycle (days)

Cash Conversion Cycle (days)


Two Dividend payout (Interim & Final) each year

Special interim dividend of SGD 2.7 cent :-

(1) Reward shareholders for their loyalty and support over the years ( out of proceeds from sale of a Taiwan listed Co.

(2) Pass on S44 tax credits to shareholders by giving them option to re-invest their cash dividend through subscription of rights shares cum warrants

Dividend Yield (%)

7.9%

8.5%

8.9%

30.8%

6.0%

6.1%


Business Highlights


� Our Core BusinessElectronic Components Distribution

� Other Businesses


Singapore Headquarters

Malaysia (2)

PenangKuala Lumpur

BangkokChiang Mai

Thailand (2)India (8)

BengaluruNew DelhiPuneMumbaiChandigarhChennai NashikSecunderabad

Vietnam (2)

Ho Chi MinhHanoi

Philippines

SeoulChangWonGwang JuDaegu

South Korea (4)

Hong Kong

North ChinaBeijingTianjinQingdaoChengduChongqingXi’anZhengzhouShenyangHarbin

China (28)

East ChinaShanghaiSuzhouHangzhouWuxiNanjingWuhanHefeiNingbo

South ChinaShenzhenXiamenFuzhouGuangzhouHuizhouZhuhaiChangpingChang’anChangshaZhuzhouZhongshan

Taiwan (3)

TaipeiHsinchuTaichung

One of the largest Asian geographical presence (in terms of offices) in

the electronic distribution industry

Extensive Distribution NetworkTotal 53 Sales Offices & > 750 employees in Asia P acific

Manila

Indonesia

Jakarta

Future Plan

China: Ningbo, ZhongshanSouth Korea: Gwang Ju, DaeguTaiwan: TaichungIndonesia: Jakarta

Additions in FY11

China: Jiangxi, GuangxiTaiwan: KaohsiungIndia: Kolkata


� Maintain market leader position in Korea and Greater China

� Focus on Growing Low BaseBusinesses in Taiwan, India & Vietnam market

� Maintain Healthy Growth in South East Asia

� Consider adding Japan to the Asian equation

� TI-SVA (Previously known as National Semiconductor)

� TTE

� TXC

� AMD

� Toshiba

� Walsin

� Hisilicon

� Osram

� Microcrystal

� Texas Instruments (TI)

� Onsemi

� Avago

� TE

Major Product Lines Newer Product LinesAsian Market Focus

Revenue and Earnings Accretive

1Q2012


SMV has 2 core business division: OOH Media and Hospitality InfocommTechnology

OOH Media consists of Outdoor LED and Billboard advertising displays,and multimedia solution. Our current advertising location includes GrandPark Orchard (GPO) LED, Northpoint LED and Billboards and Verge LED.

Hospitality Infocomm Technology consists of Proprietary i-Connect digitalsolution, i-Connect Intelligence Room Infotainment System (IRIS), ODMproduct development and Telecommunication product distribution.

Grand Park Orchard @ Knightsbridge LED

The Verge LED

IRISIntelligent Room Infotainment System

Intelligent Room Infotainment System (IRIS)

Touch Medical PadKhoo Teck Puat Hospital

Touch Medical Pad iPad Touch for Nurse/Patient

Digital Signage System / Touch Screen

ADSL, Internet, Network

& Wireless Equipment

Platinum Distributor Status - Singapore

Hospitality Telephones


Product Range

ECMO CircuitAngio Pack Customized Heart Lung Pack for Adult,Pediatric & Infant/ Neonate Use

FACILITYOur facility is strategically located within the future Medical Device Hub which is going to house world class medical companies in Singapore. CSS is set to harness this strategic position in commitment to meet the stringent demands of the medical industry.

SurgiAid ® Collagen Wound Dressing


Other Businesses

Bull Will Co., Ltd (Taiwan Stock Code 6259)

(Design, Build, Ship Electronic Components)

StandardProducts

Automotive CustomMagnetics Transformers

4 Product Groups :

6 Manufacturing Plants in China:

百徽股份有限公司百徽股份有限公司百徽股份有限公司百徽股份有限公司Bull Will Co., LtdH/Q : 台北市內湖區瑞湖街199號3F

3F, No 199 RueiHu Street Neihu, Taipei City, Taiwan ROC

Website: www.bullwill.com.twPaid-up Capital : US$25millionEmployees: 2,100 at 1Q2012Serial’s Equity Interest: 35.04%

Around Huizhou Area ( 惠州市附近惠州市附近惠州市附近惠州市附近) Hunan ( 湖南湖南湖南湖南) Hubei ( 湖北湖北湖北湖北)

Diligent / 勤奮勤奮勤奮勤奮 , Ethics / 廉潔廉潔廉潔廉潔 , Professional / 專業專業專業專業 , Customer-Oriented / 以客為尊以客為尊以客為尊以客為尊

Design, Build, Ship Magnetic Components for Electronic Power Module


Strong Prospects



Revenue Growth

� New product lines and extension of existing lines

� Organic growth from value-added M&A, new andexisting product lines

� Continued focus on lucrative markets, such as China ,Korea and Taiwan

� Expansion in emerging markets, India and Vietnam

ImproveGP Margin

� Improved value-added designs and solutions to customers

� Demand creation for suppliers and customers

Operational Efficiency &

Enhanced Risk Management

� Staff productivity and efficiency

� Business simplification (ERP)

� Cost efficiency

� Strengthen controls on Debt, Inventories and Cash


� Sustainable revenue Sustainable revenue Sustainable revenue Sustainable revenue growthgrowthgrowthgrowth

� High GP amongst High GP amongst High GP amongst High GP amongst distributorsdistributorsdistributorsdistributors

� Strong foothold in Strong foothold in Strong foothold in Strong foothold in South East Asia, Korea South East Asia, Korea South East Asia, Korea South East Asia, Korea and Greater Chinaand Greater Chinaand Greater Chinaand Greater China

� Good potential in India Good potential in India Good potential in India Good potential in India and Taiwanand Taiwanand Taiwanand Taiwan

Why Serial

� Low PE/PB amongst Low PE/PB amongst Low PE/PB amongst Low PE/PB amongst distributorsdistributorsdistributorsdistributors

� Attractive dividendAttractive dividendAttractive dividendAttractive dividend(Annual yield of 6(Annual yield of 6(Annual yield of 6(Annual yield of 6----9%)9%)9%)9%)

� Healthy balance sheetHealthy balance sheetHealthy balance sheetHealthy balance sheet

� Good corporate Good corporate Good corporate Good corporate governancegovernancegovernancegovernance


Q&A


The presentation herein may contain forward looking statements by the management of Serial System Ltd (“Serial”)that pertain to expectations for financial performance of future periods versus past periods.

Forward–looking statements involve certain risks and uncertainties because they relate to future events. Actualresults may vary materially from those targeted, expected or projected due to several factors. Such factors are,among others, general economic conditions, foreign exchange fluctuations, competitive product and pricing pressuresas well as changes in tax regimes and regulatory developments. Such statements are not and should not beconstrued as management’s representation on the future performance of Serial. Therefore, the actual performance ofSerial may differ significantly from expressions provided herein.

This presentation does not constitute an invitation or an offer to sell, or solicitation of an offer to buy any securities inconnection with, any contract or commitment whatsoever.

This presentation has been prepared exclusively for the parties presently being invited for the purposes of discussion.Information contained in this presentation does not constitute a prospectus or offering circular in whole or in part.


Documents

Serial System Ltd Corporate Presentation 28 April …...2012/04/28 · Mumbai Chandigarh Chennai Nashik Secunderabad Vietnam (2) Ho Chi Minh Hanoi Philippines Seoul ChangWon Gwang