4Q2013 Company Reporttw.pahsco.com.tw/upload/userfiles/files/PAHSCO_4Q2013(TTB).pdf · 2 Our Milestone 1977 PAHSCO formed with a stock Capital of NT$ 1 Million 1980 Started the production

Presented by Tim Chiang

4Q2013 Company Report

2

Our Milestone

1977 PAHSCO formed with a stock Capital of NT$ 1 Million

1980 Started the production & trading of central medical gas equipment

2001 Tong Lo Factories received ISO9001 & CE Certification

2002 Tong Lo (F0) received GMP Certification

2004 PAHSCO became a public listed company in the stock market

2005 Tong Lo (F0’) formed to expand the production of sterilize medical product

2006 The automatic warehousing system was officially implemented in August

1987

2009

Obtained 11,997m2 of production capacity and expanded Tong Lo (F3)

2008

Tong Lo (F1) constructed on November

2008

2010

Obtained 7,085 m2 of land

Issued its second series of secured domestic convertible bonds

Implemented Oracle ERP systems 2011

Implemented BPM system

Since 2009, PAHSCO has been awarded with Top-Ten ranking

for information transparency and disclosure for 5 consecutive years.

2012

Tong Lo (F2) constructed & expanded the production of gas piping products

2013 Established a subsidiary company - Pacific Precision Technology Co., Ltd.

Taichung Office

4 Factories in

Tong-Lo Industrial Park

Taipei Headquarter

Kaohsiung Office

Location

Miaoli

Taiwan

Certificate

224,103 245,633 256,253

270,349 284,126

0

50,000

100,000

150,000

200,000

250,000

300,000

2009 2010 2011(e) 2012(e) 2013(f)

5

Introduction to the

Medical Product Industry and Future

Global Market for Medical Device and Equipment –

Steady growth year by year

Source: Espicom Business Intelligence(2011); IEK(2011/04)

Percentage of Global Market （2010）

Prediction of Global Market

Growth rate maintained between 5%-6% in recent years.

America, 44%

Asia, 19%

Western Europe,

28%

Eestern Europe,

5%

Middle East and

Africa, 3%

Unit

：Millio

n (U

SD

)

6

Introduction to the

Medical Product Industry and Future

Prediction of Global Medical Product Market

Source: Espicom Business Intelligence(2011); IEK(2011/04)

Estimated percentage by category

Estimated percentage of Global Market by country

Medical Disposal Device

17% Diagnostic Imaging Products

24%

Orthodontic Products

6%

Orthopodic and

Implantable Products

17%

Others 36%

2012(e) USD 270.3B

United States 38%

Japan 10% Germany

8%

France 4%

Others 40%

2011(e) USD 256.3B

7

6.7 7.4 8.9

10.2 11.6

13.2 14.9

0

5

10

15

20

2009 2010 2011(e) 2012(e) 2013(f) 2014(f) 2015(f)

Total Revenue Unit: Billion(USD)

Resource: IMS Health, Espicom, 2011醫材年鑑, IEK

China market has maintained over 10% of the growth rate in

recent years.

Medical Device and Equipment Industry

in Mainland China

8

Main Geographic Areas of

Global Medical Device Market

4～5X

5X

9

Overall Index of Geographic Areas

Developed Countries

with Subcontract Manufacturing Focus

Countries

with Self-Branding Focus

US Japan Germany China Taiwan

Ove

rall In

de

x

Population (Million) 310 127 81.6 1350 23

Age

(0~14:15~64:65up) 20 : 67 : 13 13 : 65 : 22 14 : 66 : 20 17.6：73.6：8.9 16 : 73 : 11

Birth Rate：Death Rate 14 : 8 9 : 9 8 : 10 12 : 7 9 : 7

Fertility Rate 2.1 1.4 1.4 1.8 0.94

GDP (Million USD) 14,582,400 5,497,812 3,309,669 5,878,629 430,096

GDP per Capita(USD) 47,084 43,161 40,542 4,393 17,660

Economic Growth Rate 2.90% 5.10% 3.60% 10.3% 4.21%

Me

dic

al In

du

stry

Ind

ex

Health Expenditure per

Capita（USD） 7,410 3,321 4,629 169 1,260

Health Expenditure / GDP（%）

16.20% 8.30% 11.30% 4.6% 6.00%

Change of Health

Expenditure per Capita

3~4%

Steady Growth

Rate

Adjusting

(Negative growth

approx. in every 5

years)

Positive growth

(Growth Rate not

steady)

15% and above

High-speed

Growth Rate

2~3% Growth Rate

Hospital Beds per 1000

persons (unit) 3.10 13.80 8.20 2.45 6.78

Source: World Bank, Espicom, IEK

10

Population Structure of

Geographic Areas Due to the low

birth rate in

Taiwan, the

population

structure is aging. Population of age above 65

Country Percentage of population above age 65 Period of time expected

7% 10% 14% 20% 30% 7%→14% 10%→20% 20%→30%

Taiwan 1993 2005 2017 2025 2040 24 20 15

Singapore 2000 2010 2016 2023 2034 16 13 11

South Korea 2000 2007 2017 2026 2040 17 19 14

Japan 1970 1985 1994 2005 2024 24 20 19

China 2001 2010 2026 2036 - 25 20 -

United States 1942 1972 2015 2034 - 73 62 -

Germany 1932 1952 1972 2009 2036 40 57 27

UK 1929 1946 1975 2026 - 46 80 -

Italy 1927 1966 1988 2007 2036 61 41 29

Switzerland 1887 1948 1972 2015 - 85 67 -

France 1864 1943 1979 2020 - 115 77 -

Source：

1. Council for Economic Planning and Development

2.United Nations, World Population Prospects：The 2006

Revision.

11

Others 26%

Japan 28%

Taiwan 19%

China 9%

U.S. & Canada

9%

Germany 6%

Saudi Arabia

3%

Major Exporting Countries

PAHSCO 2012

Japan 23%

Taiwan 19%

China 10%

U.S. & Canada

7%

Germany 7%

Saudi Arabia

5%

PAHSCO 2013

Others

29%

12

80% 85% 90% 95% 100%

2009

2010

2011

2012

2013

87.30%

90.50%

91.03%

90.50%

90.90%

5.00%

6.60%

5.85%

6.90%

7.00%

7.70%

2.90%

3.12%

2.60%

2.10%

Medical Device Medical Equipment Piping System

Percentage of Product Categories

13

Tubes, 28%

CSS, 27% Bags, 13%

Others, 23%

Wound Drainage

System, 5% Bottles, 2%

Respiratory, 2%

Disposable Medical Device

Closed Suction System (CSS)

Sales Revenue:382 Million(NTD)

% of Product TR: 27% (2nd )

Tubes

Sales Revenue:400 Million(NTD)

% of Product TR: 28% (1st )

Respiratory

Sales Revenue:25 Million(NTD)

% of Product TR: 2%

Bags

Sales Revenue:185 Million(NTD)

% of Product TR: 13% (3rd)

PAHSCO 2012

14

Disposable Medical Device

Tubes

Sales Revenue:375 Million(NTD)

% of Product TR: 26% (2nd )

Closed Suction System (CSS)

Sales Revenue:394 Million(NTD)

% of Product TR: 27% (1st )

Respiratory

Sales Revenue:28 Million(NTD)

% of Product TR: 2%

Bags

Sales Revenue:175 Million(NTD)

% of Product TR: 12% (3rd)

PAHSCO 2013

CSS, 27%

Tubes, 26%

Bags, 12%

Others, 24%

Wound Drainage

System, 7% Bottles, 2%

Respiratory, 2%

15

Client Types of Medical Device & Equipment

Unit: Thousand (NTD)

2012

Domestic: 18.80% Export: 81.20 %

2013

Domestic: 18.72 % Export: 81.28%

ITEM OBM ODM/OEM Total OBM ODM/OEM Total

Device 513,817 787,864 1,301,735 568,302 744,556 1,312,858

Equipment 78,130 21,026 99,156 77,350 28,863 101,213

Total 592,001 808,890 1,400,891 645,652 768,419 1,414,071

% 42.26% 57.74% 100.00% 45.66% 54.34% 100.00%

16

Sales by Quarter Unit: Thousand (NTD)

YEAR 2006 2007 2008 2009 2010 2011 2012 2013

Q1 131,736 192,669 222,680 246,505 299,794 325,890 342,607 357,542

Q2 204,176 218,285 221,649 282,752 319,461 372,298 341,626 382,503

Q3 236,581 204,471 240,016 294,085 310,737 342,243 369,016 351,901

Q4 166,433 217,421 276,562 311,086 318,310 303,188 385,459 351.950

Total 738,926 832,847 960,906 1,134,428 1,248,302 1,343,619 1,438,708 1,443,896

Growth 39.2% 12.7% 15.4% 18.1% 10.0% 7.64% 7.08% 0.36%

Gross

Margin 27.26% 28.92% 33.25% 39.37% 41.07% 38.67% 39.24% 37.46%

17

Financial Information

ITEM 2006 2007 2008 2009 2010 2011 2012 2013

EPS 2.03 2.82 2.73 (0.23) 5.49 5.39 4.75 4.88

ROE % 14.52 19.13 19.27 (1.40) 28.14 22.62 19.89 19.49

ROA % 10.43 14.24 12.88 (0.93) 22.20 18.93 16.68 16.06

Net Profit

Margin 10.70 14.10 13.60 (1.12) 27.55 24.06 21.79 22.29

Net Cash

per Share 4.90 4.20 7.20 8.00 9.84 10.44 12.37 12.64

*2010EPS 5.49 in the weighted average capital ; 2010EPS 6.37 in the year-end capital

*2010Pay-out: $3 Cash Dividend and $1.12 Stock Dividend presented at the Shareholders’ Meeting.

*2011Pay-out: $3 Cash Dividend and $1 .00Stock Dividend presented at the Shareholders’ Meeting.

*2012Pay-out: $4 Cash Dividend presented at the Shareholders’ Meeting

*2013Pay-our: $2.5 Cash Dividend will be presented at the Shareholders’ Meeting on June 11, 2014.

18

Financial Information

* Ignore the evaluation loss of financial liabilities

*2010EPS 5.44 in the weighted average capital ; 2010EPS 6.31 in the year-end of capital

*2010Pay-out: $3 Cash Dividend and $1.12 Stock Dividend presented at the Shareholders’ Meeting.

*2011Pay-out: $3 Cash Dividend and $1.00Stock Dividend presented at the Shareholders’ Meeting.

*2012Pay-out: $4 Cash Dividend presented at the Shareholders’ Meeting .

*2013Pay-our: $2.5 Cash Dividend will be presented at the Shareholders’ Meeting on June 11, 2014.

ITEM 2006 2007 2008 2009 2010 2011 2012 2013

EPS 2.03 2.82 3.53 4.24 5.44 5.39 4.75 4.88

ROE % 14.52 19.13 22.23 22.71 27.85 22.62 19.89 19.49

ROA % 10.43 14.24 14.00 16.15 22.02 18.93 16.68 16.06

Net Profit

Margin 10.70 14.10 17.60 20.69 27.27 24.06 21.79 22.29

Net Cash

per Share 4.90 4.20 7.20 8.00 9.84 10.44 12.37 12.64

Medical Device Market Revenue – World

19 Source: Frost & Sullivan, 2010

Total Revenue Unit: Billion(USD)

5.94

6.53

8.9

12.47

14.25

18.4

20.48

21.07

23.45

24.34

37.1

48.08

55.8

0 10 20 30 40 50 60

Cosmetic Surgery & Lifestyle Products

Neurology & Neuromuscular Devices

Intravenous & Infusion Devices

Urology & Gynecology Devices

Ophthalmic & Optical Devices

General Surgical Therapeutic Devices

Single Use Surgical & Disposables

Minimally Invasive Surgical Devices

Wound Care and Biomaterials

Others

Orthopedic and Prosthetic Devices

Anesthetic and Respiratory Devices

Cardiology and Thoracic Surgery

20

Respiratory Disposable Market Size –

Facts And Figures in China

Inpatients % of Respiratory

System Diseases

City

Hospital

County-

level

Hospital Average

2009 12.23% 16.46% 14.35%

2010 12.41% 16.43% 14.42%

21

Revenue

(NTD) 2008 2009 2010 2011 2012 2013

Total 0. 96 B 1.13 B 1.25 B 1.34 B 1.44 B 1.44 B

China 49 M 73 M 83 M 115 M 130 M 143 M

% 5.1 % 6.5 % 6.7 % 8.5 % 9.0 % 9.9%

49 M

73 M 83 M

115 M 130 M

143 M

2008 2009 2010 2011 2012 2013

(NTD)

14%

50% 13%

38%

Our Sales Revenue in China

10%

yoy

Information about the Leading Firms

22

Kimberly Clark

(KMB) Covidien

(COV)

Resmed (RMD)

CareFusion (CFN)

Headquarter

Irving,TX

Dublin

SD,CA

SD,CA

Stock Exchange NYSE, BMV NYSE NYSE, ASX NYSE

03/12/2014

Stock Price 109.75 71.14 45.11 40.92

Market Cap

(USD) 41.64 B 32.07 B 6.39 B 8.53 B

EPS (ttm) 5.53 3.44 2.23 1.68

Source: Yahoo Finance, FR of the companies, *Estimated Data

Annual Revenue

2013 (USD) 21,152 M 10,235 M 1,514 M 3,550 M

Profit Margin 34.23% 59.45% 62.11% 52.11%

Net Profit Margin 10.13% 16.61% 20.28% 10.85% Revenue of

Respiratory

Devices

(% of TR)

*539M

(2.55%)

763M

(7.45%)

823.5M

(54.39%) 393M

(11.07%)

Mask and Tubing for NIV

Related Products for Invasive Ventilation

For Delivering Humidified or Warm Gas

Ma

sk

＆ Tub

ing

Anesthetic

Oxygen Therapy

Aerosol Therapy

Sleep Therapy

Emergency Care

Airw

ay

Laryngeal Mask

Closed Suction Set

ET tube

Tracheostomy Tube

Guedel Airway

Laryngoscope

Filte

r/ Hu

mid

ifier

Filter

Artificial Nose

Nebulizer

Active / Passive Humidifier

23

PAHSCO existing products

Respiratory Devices

24

Thank you

for your attention & patience!