Key Highlights

• Acter* reported 2022 consolidated revenue NT$28.26 billion, net profit attributable to owners of the parent company NT$1.93 billion, and earnings per share (EPS) NT$16.84, an increase of 40% YoY, 61% YoY, and 60% YoY, respectively
• Gross profit margin, operating profit margin, and after-tax net profit margin reached 17%, 12%, and 9%, respectively.
• Improved revenue mix with Taiwan making up 56% of 2022 revenues vs. 45% in 2021. China decreased to 37% in 2022 from 44% in 2021.
• Accumulated backlog is more than NT$30bn which is enough to support the operation of the group in the next 1-2 years.
• The Board plans to distribute NT$8.5 per share (par value NT$5) cash dividend for second half 2022 earnings. Total cash dividend, including NT$3.42 distributed in Feb. 2022, reaches NT$11.92 per share, equivalent to 71% payout ratio. If converted to 10 par value per share, the distribution of 2022 is equivalent to NT$23.84 in cash dividends.

2022 Overview

• Acter* reported 2022 consolidated revenue NT$28.26 billion, net profit attributable to owners of the parent company NT$1.93 billion, and earnings per share (EPS) NT$16.84, an increase of 40% YoY, 61% YoY, and 60% YoY, respectively. Both revenue and profit reached historical highs. The strong momentum was mainly driven by semiconductor and electronics related projects. Despite increased uncertainties on semiconductor investment, Acter*’s experienced and talented professionals and project management capabilities across different sectors effectively mitigated the risk of single market/sector fluctuation and helped the company deliver a strong 2022 financial performance.
• In 2022, the overall gross profit margin, operating profit margin, and after-tax net profit margin reached 17%, 12%, and 9%, respectively. Although the overall operation is still affected by related cost factors such as raw materials and labor, Acter* has gradually brought into the benefits of large-scale procurement through economies of scale, strict control of various expenses, and appropriate rolling adjustments to project duration and quotations, helping the group to maintain superior performance with improved profitability vs. 2021.
• By region, Taiwan accounted for 56% of 2022 revenue, followed by China 37%, and others 7%. Compared with 45% in 2021, the significant increase in Taiwan's share is mainly driven by increased domestic projects resulting from global supply chain restructuring in the past two years. By industry, semiconductors accounted for 59%, electronic assembly 17%, and others 24%. Due to completion of semiconductor-related projects, its revenue share has slightly decreased compared to 61% in 2021.

2023 Outlook

• Many European and American companies have requested suppliers to reduce their dependence on China due to geopolitical concerns. This trend has induced corporate’s foreign investment focus shifting from China to Southeast Asia. According to the Investment Commission of the Ministry of Economic Affairs (MOEAIC), 2021 Taiwanese corporations invested US$5.81 billion in Southeast Asia, a substantial increase of US$3 billion compared with the previous year, second only to the US$5.86 billion invested in China. Acter* has subsidiaries in most countries in Southeast Asia to provide services nearby. Currently, employees in Southeast Asia accounted for 10% of the total employees. We expect orders momentum from Southeast Asia to accelerate in 2023. Acter* actively cultivate its talents with international experience, boost efficiency of internal management, searching for potential business partners to expand the Group’s global footprint.
• In Taiwan, the government launched the "InvesTaiwan" initiative in July 2019 in response to the Sino-US trade war. As of February 17, the total investment amount exceeded two trillion and five hundred million NT dollars. Acter*'s extensive business scope and strict cost control capabilities will assist customers in making the most efficient use of capital investment. In 2019, Taiwan accounted for 37% of Acter*’s revenues while the figure increased to 56% in 2022. The investment cycle driven by the "InvesTaiwan” initiative will continue to create new project opportunities for Acter* in 2023.
• Due to channel inventory over-built in 2H22, semiconductor industry is experiencing a mid-cycle correction, and manufacturers have cut 2023 capex programs to mitigate market risks. Nonetheless, long-term demand for semiconductors driven by the structural growth from artificial intelligence and electric vehicles remains intact, and the United States, Japan, and Europe all have launched plans for developing the semiconductor industry. In order to maintain its leading position, Taiwan's semiconductor factories will continue to expand capacity. Acter*’s engineering performance and reputation in the semiconductor industry will help the company win new projects when channel inventory returns to normal and capex momentum resumes.
• Currently, Acter*’s accumulated backlog is more than NT$30bn, which is enough to support the operation in the next 1-2 years. In 2023, we remain cautious and optimistic toward our earnings. Taiwanese companies with manufacturing as their core competitiveness will play a pivotal role in the development of a "resilient supply chain", and the corporate investment cycle driven by supply chain restructuring across various industries will continue to generate project opportunities. With its diversification strategies across multi-industries and multi-regions, Acter* should benefit from the abovementioned capex cycle and secure new orders.

Sustainable development

• Acter* is committed to strengthen corporate governance, support inclusive and diverse enterprise culture, and enhance sustainable development. We have been ranked on the top 5% in TWSE’s Corporate Governance Evaluation for 7 consecutive years and was ranked in the fourth place in the middle enterprise group of the CSR Sustainable Citizen Award in the evaluation of the 2022 Commonwealth Magazine. Acter* has not only established a responsible supply chain and built a diverse and tolerant workplace, but also been promoting green low-carbon engineering, cultivating industrial talents, attentive to the disadvantaged monitory. It is our aspiration to create shared value for the society and win more reputation points with an excellent and sustainable corporate governance approach.

（attachment 1）Acter* 2022 consolidated financial summary

Unit: NTD in thousand

2022 Dividend Semi-Annual Payout Schedule (par value NT$5/share)

The company's par value per share is NT$5. Total cash dividend reaches NT$11.92 per share in 2022. If converted to 10 par value per share, the distribution is equivalent to NT$23.84 in cash dividends.

News Contact:

ACTER GROUP CORPORATION LIMITED:

Assistant Vice President     Miss Tsao   (04)2261-5288  ir@acter.com.tw

IPR Advisors   Tim Chen   (02)2758-0339  ir@ipradvisors.com