1. Institutional Investors’ Conference Sheh Kai Precision Co.,Ltd.
Stock symbol:2063
Sheh Kai Precision Co.,Ltd.
Presenter：Lin,Shan An
October, 2017

2. Abstract A. Current status of the company B. Product and niche market
C. Performance of the company
D. Vision

3. A. Current status of the company

4. General Information Paid-up capital: NTD 450,000,000
Main product: Bi-metal self-drilling screw、Bi-metal screw anchor、Dual hardness screw anchor 、 SDS-Plus drill bit、Stainless steel wire
Esablishment : June, 1992 (OTC- listed in Sep, 2017)
Main operation: No.1, Bengong 1st Rd., Gangshan Dist., Kaohsiung City 82059, R.O.C. (Taiwan)
Produciton sites: Benjhou plant(screw and screw anchor)、Luzhu plant(stainless steel wire)、Zhunan plant(SDS-Plus drill bit)
Employee: 287 ( )

5. Product and niche market
9/7/2018 5

6. Simple but not easy

7. Industry Shifting Overseas
Screw Industry
Screw Kingdom
Industry Cluster
Industry Shifting Overseas
Fierce Competition
Product Positioning

9. 核心技術 Bi-metal product positioning Welding technology
Unique technology
Less competition
Certificate
Welding technology
Bi-metal screw anchor
SDS-Plus drill bit
HSS drill bit
Partial heat treatment
High–frequency induction and quenching hardening
DUAL HARDNESS
Wire-drawing of SS
Wire processing
Wire application integration
9/7/2018

10. 300 series of Austenitic SS
Craft of welding
300 series of Austenitic SS
Alloy steel
Bi-metal screw
Bi-metal screw
( Application of SS plate)
300 series of Austenitic SS
400 series of alloy steel
Screw anchor
Concrete screw
300 series of Austenitic SS
Alloy steel

11. Solar-panel hanger bolt
Welding technology
Stainless steel
Stainless steel
Solar-panel hanger bolt
Carbon steel
Carbon steel
Internally threaded screw anchir (Fire system, tube)
Medium carbon alloy steel
Tungsten carbide
SDS plus drill bit

12. 公司產品應用 Self-drilling screw(Steel construction)
Chemical factory、corrosion
Metro station
Skylight
Concrete fixing
Window
Anti-corrosion wood
Thin steel plate connecting
Corrugated metal roofing sheet
Insulation
Curtain wall
Self-drilling screw(Steel construction)
Sharp screw(Thin metal frame)
Application of stainless steel plate
Screw anchor
9/7/2018

13. Strategic alliances Operation model Product positioning
Product uniqueness
Strategic alliances
Automatic welding & High-frequency induction heat treatment
Core competiveness
Complex manufacturing process、quality control
Automatic tool、tool、cutting tool
Bi-metal derivation
Core technology derivation
Operation model
Product positioning

14. SWOT(Bi-metal screw) 9/7/2018
1.Sheh Kai possesses the key technology and producing process
2.High-value product. quality priority. less pressure from price
3.Main market locates in Europe. Sheh Kai is famous for producing for these customers with DIBt.
3.Influential European CPR and German market
1.Limited product range
2. OEM
3. Enhance direct sale capacity
1.Stricter regulation on steel construction
2. Demand in the USA, China, Hong Kong and Australia increases.
1.Competitors multiply
2. Intention to copy our successful experience
3.Market order disturbance
9/7/2018

15. Bi-metal screw Interest：data from January to June Year Item listed 101
102
103
104
105
106 (1-9)
Sales
458,137
344,506
447,180
398,845
476,070
419,362
Quantity
139,692
101,053
135,656
122,436
151,176
136,270
Interest
36.10%
37.40%
40.05%
41.85%
41.69%
40.41%(註)
Capcity
14,000
15,000
16,500
19,000

16. Bi-metal screw European sales
Year Item listed
101
102
103
104
105
106 (1-9)
Sales
320,709
181,913
276,538
233,918
268,088
239,870
Quantity
96,324
53,788
85,307
71,075
88,117
80,465
Key customer-E
128,353
80,445
107,759
64,580
50,970
52,425
Key customer-H
53,938
46,385
53,301
53,719
54,866
37,287
Key customer-A
19,826
1,564
14,246
41,681
45,101
37,391
Key customer-EJ
68,726
9,516
39,118
10,581
31,178
34,798

17. European bi-metal screw market share

18. Bi-metal screw sales to America

19. Bi-metal screw sales to China and HK

20. Features of screw anchor

21. Comparison with trasitional anchor

22. Market of bi-metal screw anchor
Demand in such product in America and Europe is expect to increase 15% annually. Demand in bi-metal screw anchor has been seen to be exploded.
Sheh Kai is looking forward to the ETA approval from DIBt by the end of 2017 (Threshold to European market )

23. Sales of bi-metal screw anchor

24. SWOT(Bi-metal screw anchor)
1.Threshold to manufacture such product is quite high.
2.Sheh Kai is one of the two companies that are capable to produce such product.(Second to German company HECO)
3.Expecting ETA approval
1. High price
2. Enhance direct sale and strategic alliances after certified.
1.Regulation of construction corrosion has been stricter.
2.Capacity worldwide of such is not enough.
3. Screw anchor is replacing traditional anchor.
1.Competive market
2. Copy our product
3. Market disturbance
9/7/2018

25. Sales of dual hardness screw anchor

26. Screw anchor sales in America

27. Screw anchor sales in Oceania

28. Bimetal screw anchor sales in Europe

29. SDS-Plus drill bit application
Complete range :
Minimum : Working length 25mm X (Ø3.2mm)
Longest: 1000mm L X (Ø12,13,16mm) in full length；Sheh Kai provides all sizes。
Biggest diameter: Ø19,20mm, In development；expected to finish by the end of 2017

30. Welded VS Inserted Inserted tungsten carbide to support
Welded VS Inserted(Plug in)

31. Advantages in Geometry
1.More space for dust venting
2.Fast speed
3.Effective cutter expanded to prolong lifetime
4.Strong center optimizes positiong.

32. Major competitor 類型 Competitor 創立年 國家 PGM SDS-plus drill bit type
Capacity
Value
Brands & Producer
Hilti
1941
Lichtenstein V
Inserted 2-cutter、welded 4-cutter
500000
pcs/Day
Up to 20 billion
Robert Bosch GmbH
1886
Germany
Up to 15 billion
Bosch Power Tools (China)
1995
China
Inserted 2&4-cutter
Dewalt/BBW
1922
USA/Germany
Makita Corporation
1915
Japan
Inserted 3-cutter. Welded 3-cutter
Producer
Diager
1956
France
Inserted 2&3-cutter
Drebo
1979
Heller
1583
Inserted 3-cutter
Miyanaga
1916
Fangda Holding Co., LTD IRWIN Department
1884
China/USA
Inserted 2-cutter
Ningbo Sunny Tools Co., Ltd
2006
Zhejiang Dewei Cemented Carbide Manufacturing Co., LTD
N/A
Zhen Jiang HTT Tool Co., LTD
Anchor & Drill Bit Producer
Sanko Techno
1964
UNIKA CO., LTD
1965
2刃&4刃插入式

33. SDS-Plus drill bit market
Japanese market； NTD 3 billion/year；~ 20,000,000 pieces
Dealer market worldwide；minimum 500,000,000 pieces，NTD billion
Major middle and high quality producer are from Germany. The price is also high.
Sole high-end provider is from Japan.
Biggest demand is from China. (Construction)
C/P (Best professional choice)。
SK :Sole high-end ODM producer (Complete range)

34. Description In development
One-stop production；Shipping in 4 weeks. Complete range；Capacity 6K/Day,10K/day by the end of 2017
In development
Four cutter: Imperial,metric and Japanese sizes have finished developing. Imperial 3-cutter product will be finished by year-end.
Installation of new facility: for small diameter(Ø3.4mm), short sizes, thick shank
Application for PGM will facilitate the sales in Europe
Next step of development will focus on multiple-use steel cutter；can be applied on stainless steel; there’s no such product in the market
2D;3D ＷＣMetal Drill bit 。

35. C. Performance of the company
9/7/2018 41

36. Screw & screw anchor sales
The last three years and the first half of financial reports
　　　 單位：新台幣仟元
year item
103’s
104’s
105’s
106H1
Screw & screw anchor sales
492,099
456,458
576,356
320,194
Wire & other sales
201,577
184,438
187,652
111,104
Gross profit
183,112
162,351
219,135
124,622
Operating Income
90,529
74,764
100,379
72,512
Profit after tax
75,091
64,935
61,965
52,379
Earning Per Share
1.74
1.50
1.38
1.16
Gross Profit Margin
26.40%
25.33%
28.68%
28.89%

37. D. Vision
9/7/2018 43

38. ETA ripples：
Companies which acquire ETA from Germany are mostly German companies such as HILTI、TOGE、HECO、FISCHER and WURTH.
The quality of other ETAs by other channels outside of Germany acquired by non-German brands is still to be discussed.
Sheh Kai is the only one in Asia which acquire certificate from German standard.
Sales has started by shipping our screw anchor to three European customers and one Australian customer.
There are three European customers waiting for our certificate by the end of 2017 to place their orders of bi-metal screw anchor.
Three major European brands have sales of 130 million pieces.(12 million bi-metal ones included)

39. ODM/OEM for US market ：
Carbon steel：ODM discussion with a major sales channel in the USA is coming to the fianl stage. We look forward to shipping next year.（Helping the customer to get ICC with our ETA experience）；Australian TS 101 will enhance Sheh Kai’s market share.(Product with ETA or ICC can apply TS 101)
Stainless steel：New version of the US customer’s bimetal screw anchor is expected to be settle soon. Volume of the first order has been seen massive.

40. Bi-metal screw：
China：Laws regulating curtain wall will be stricter. It will emphasize the anti-corrosion capability . Bi-metal screw will be included in the rules. The volume in infrastructure is expected to be raise annually.

41. SDS-Plus drill bit： Korea：First shipment in September
Brasil：First shipment in August
Germany：Customer is waiting for our PGM certification.
Taiwan：Existing customers place orders regularly.
Austrailia： Existing customers place orders regularly.
USA： Existing customers place orders regularly.

42. With unique product positioning the future is promising.

43. Thank you for your attention