台灣數位光訊科技股份有限公司Taiwan Optical Platform (top MSO)

優質生活e線牽

Kevin Lo, Chief Operating Officer

Sandy Lin, Chief Financial Officer

2017.04.13~2017.04.14

Ticker: 6464 TT

2章節進度

Executive SummaryThe Core Content of top’s Presentation

Taiwan Optical Platform (top MSO) is the 4th largest Multiple System Operator (MSO) in Taiwan with ~6% market share and the 2nd largest broadband service provider within its service area. top MSO has listed on TWSE on Dec 16, 2015 (Ticker: 6464).

We have a strong presence in central Taiwan and aim to expand our coverage. We already have licenses to expand our cable network coverage to Greater Taichung, and expand our fixed network to Taoyuan, Hsinchu, and Miaoli.

We generate stable operating cash flow and are committed to make cash dividends take up at least 50% of total dividend pay-out.

05.

01.

02.

03.

04.

Company Background

Industry Position & Trend

Our Strength and Strategy

Operating Summary

Future Prospects

4

Employees

633

(December, 2016)

Establishment

August, 2006Capital

1,238 million

$

- 6-6F., No.201, Sec. 2, Wenxin Rd., Xitun

Dist., Taichung City 407, Taiwan (R.O.C.)

- No.68, Sec. 1, Guoguang Rd., Dali Dist.,

Taichung City 412, Taiwan (R.O.C.)

Company Address

Cable Service, Broadband Service, Channel

Lease, Line Lease,

Satellite TV Station

Main Products & Services

Company Profile

01. Company Background

5

Subsidiary Overview

01. Company Background

Chia-Lien Cable Co., Ltd.

Ta-Tun Cable Co., Ltd.

top Light

Communications

Co., Ltd.

tint

Taiwan Optical Platform (top MSO)

CNT CATV CO., LTD.

A-First Technology Co. Ltd.

Sin Trend Video CO., Ltd.

Sin-He Integrated Elec. Business

Co., Ltd.

97.48% 97.06% 100%92.35%100%

1.46% 1.71%6.09%

100%100%

100%

100%Sin-Long

MultimediaCo., Ltd.

6

55

4

3

Products and Services

Cable TV Business- 295K cable TV subscribers

- The only Taiwan MSO with connected service

coverage

- Covers 36.63% of Taiwan together with

Telecom Business

Telecom Business- 129K BB subscribers

- 1,099 BTS backhaul

- The first MSO to provide FTTH service

Media Business- Local news & Central Taiwan

news channel

- 98% penetration in nationwide

satellite TV channels

1

2

3

Taichung Citytop Light Communications Co., Ltd.

Ta-Tun Cable Co., Ltd.

Nantou CountyCNT CATV CO., LTD.

Yunlin CountyChia-Lien Cable Co., Ltd.

Peikang Cable Co., Ltd.

(owns 39.5%)

1

2

Taichung City

Nantou County

Yunlin County

Changhua Countytint

Taoyuan, Hsinchu, and MiaoliScheduled for inspection applications:

Taoyuan City: Q4, 2017/ Hsinchu County: Q3, 2017/ Hsinchu City: Q2, 2017

Miaoli: Operation started from Jan., 2017

冠軍電視台 No.1 Television

冠傳媒1Media

top Light Communications

Ta-Tun Cable Co., Ltd.

CNT CATV CO., LTD.

Chia-Lien Cable Co., Ltd.

Peikang Cable Co., Ltd.

(owns 39.5%)

01. Company Background

7

tinp (台基網) established2001

Company Milestone

2012 Spun-off leisure business

2007

2005 Acquired West Coast and Hai Shien Cable TV

2002Acquired Type II telecom license

2003–2004Rapid growth for BB subscribers

2008- Acquired fixed network (Type I) license for

Taichung, Changhua, Nantou, and Yunlin

- Set up ‘’No.1 TV‘’ Channel

- CATV license expansion to Greater Taichung

- Acquired fixed network (Type I) license for

Taoyuan, Hsinchu, and Miaoli

2014 Listed on Emerging Stock Board

2015 Listed on Taiwan Stock Exchange on 12/16Set up

2016 Miaoli County: Inspection for fixed network completed

and acquired the license for local network business

01. Company Background

8

Kbro (Fubon Group)

1,110,132 戶

21.33%

TFN (Taiwan Mobile)

536,482戶

10.31%

CNS (MBK)

1,137,975 戶

21.86%

TBC (APTT)

705,455 戶

13.55%

Taiwan Optical

Platform

295,021 戶

5.67%

Dafeng

254,564 戶

4.90%

Independent SOs

1,165,933 戶

22.40%

Uniquely Positioned MSO in Taiwan Taiwan Cable TV Subscriber Market Share

top MSO’s growth opportunities

The four major MSOs take up 72.72% of total market.

Note: As of 4Q16

02. Industry

Position & Trend

Economies of Scale and Scope

- 295K cable TV subscribers and

129K BB subscribers in central

Taiwan

No. 4 MSO in Taiwan

Geographic Advantage

- The only MSO with connected

service coverage, covering 36.63%

of Taiwan

- Expansion into urban area from

rural area

Best Strategic Position

Stable Cash Flow

- Stable profitability and cash

flow

Healthy Financial Structure

Technology Leadership

The first MSO to provide FTTH service

$4

903. Our Strength and Strategy

- No.1 in density, stability, and

performance

- Average clients per node: 83

- BTS services: 1,099

- 100M - 1G FTTH (last mile)

Core Competence

Continue to Expand Coverage

- CATV expansion to Greater Taichung

- Fixed network expansion to Taoyuan,

Hsinchu, and Miaoli

From Cable to Carrier

- FTTH services to all

- 3G & 4G BTS backhaul leasing

- Education and enterprise lease line

- An IoT player

Growth through M&A

- Target to acquire small local

players

Content Production

- Aim for to be the

top channel brand in

network TV for young

generation

1003. Our Strength and Strategy

Growth Strategy

11

1,5021,412

1,347

48.70%46.60%

45.20%

30.00%

34.00%

38.00%

42.00%

46.00%

50.00%

54.00%

58.00%

62.00%

0

400

800

1,200

1,600

2,000

2014 2015 2016

EBITDA EBITDA margin%

1,317

982

1,204

946.

585. 608.

0

200

400

600

800

1,000

1,200

1,400

2014 2015 2016Operating cash flow Free cash flow

Note：EBITDA = Pre-tax profits + Net interest expenses + Depreciation and amortization

NT$ mn NT$ mn

04. Operating Summary

Three-Year Financial Highlights

EBITDA and EBITDA Margin Operating Cash Flow and FCF

12

NT$ million 2014 2015 2016YoY (%)

2014 2015 2016

Revenue 3,083 3,032 2,980 (5.2) (1.6) (1.7)

Gross Profit 1,776 1,646 1,509 0.4 (7.3) (8.3)

Operating Expenses 605 571 597 2.1 (5.6) 4.6

Operating Profit 1,171 1,075 912 (0.5) (8.2) (15.2)

EBITDA 1,502 1,412 1,347 9.6 (6.0) (4.6)

Non Operating Income/(Loss) (21) (38) (24)

Income before Tax 1,150 1,037 888 10.4 (26.8) (14.4)

Tax Expenses 207 179 153

Net Income to Parent 941 857 734 11.0 (9.0) (14.4)

EPS (NT$) 8.51 7.65 6.09 1.1 (10.1) (20.4)

Key Financial Ratios (%)

Gross Margin 57.6 54.3 50.6

Operating Margin 38.0 35.4 30.6

EBITDA Margin 48.7 46.6 45.2

Effective Tax Rate 18.0 17.3 17.2

Net Margin 30.5 28.3 24.6

04. Operating Summary

Three-Year Income Statement

13

NT$ million 2014 2015 2016YoY (%)

2014 2015 2016

TOTAL ASSETS 9,250 10,240 9,740 6.0 10.7 (4.9)

Cash 2,495 2,975 2,314 140.9 19.2 (22.2)

NR & AR 165 208 163 (1.8) 26.1 (21.6)

Inventories 28 14 15 (8.4) (50.0) 7.1

Fixed Assets 1,619 1,627 1,829 3.9 0.5 12.4

TOTAL LIABILITIES 3,663 2,891 3,254 2.4 (21.1) 12.6

Total Bank Loans 2,042 1,421 1,671 2.9 (30.4) 17.6

NP & AP 352 172 185 (2.7) (51.1) 7.6

TOAL EQUITY 5,587 7,349 6,486 8.6 31.5 (11.7)

04. Operating Summary

Three-Year Balance Sheet

14

NT$ million 2013 2014 2015 2016(**)

Net income 848 941 857 734

Cash dividend 691 781 790 238

Cash Dividend p/s (NT$) 6.22 7.00 6.60 2.00

Stock Dividend p/s (NT$) - - - 0.40

Cash yield (%) (*) 4.4 5.4 5.3 -

Payout ratio (%) 82 83 92 -

04. Operating Summary

2013–2016 Dividend Payout

Note: *Yield is based on top MSO’s average closing share price from Jan. 1st, 2016 to Aug. 26, 2016 (the day before ex-dividend day).**The Board of Directors adopted the proposal for distribution of 2016 profits on Apr. 10, 2017.

15

Sales Mix by Product(4Q16)

63%

CATV

subscription

12%

BB subscription

8%

Channel leasing

8%

Advertisement

4%

Leased-line

5%

Other revenue

04. Operating Summary

Honors and AwardsThe programs have been shortlisted

and awarded for more than a hundred times.

Golden Visual Awards- 43 awards accumulated

- Special Individual Contribution Award:

Rocky Chien, Chairman; May Liao, CEO

News AwardExcellent Journalism Award, YunPao

Journalism Award, ChenShanMei

Journalism Award, Report of Consumer

Rights Award, Report of Social Bright Side

Award

1604. Operating Summary

Consolidating the network and various

terminals to create a smart service platform

Smart HomeRemote monitoring

Disaster prevention and anti-theft alarm

Appliance (environment)

control

1

2

3

Smart CommunityCommunity Managing App

Parcel delivery

Public utilities management

Management fee payment

1

2

3

4

Smart CitySmart parking

Hydrological monitoring

Traffic monitoring

1

2

3

IoT, Internet of Things

1705. Future Prospects

18

OTT

New experience of viewing with

various terminals and content

choices

A combination of content,

platforms, network, and access

Consolidating the

services of Cable & OTT”

and the trend of New Media

05. Future Prospects

19

Fixed Network Expansion

After construction:

top’s network covers 36.63% of Taiwan

which contains 3.04 million administrative

households

05. Future Prospects

Scheduled for inspection applications:

• Taoyuan City: Q4, 2017

• Hsinchu County: Q3, 2017

• Hsinchu City: Q2, 2017

• Miaoli: Operation started from Jan., 2017

20

Content ProductionAim for to be the top channel brand in network TV for young generation

top NEWS

topNEWS

台數科

05. Future Prospects

Q&A

台灣數位光訊科技股份有限公司Taiwan Optical Platform (top MSO)