KMC Investor Report

1

September, 2015

2

Disclaimer

This meeting may contain forward-looking statements with respect to the financial condition, results of operations and business of the company. These forward-looking statements represent the company’s expectations or beliefs concerning future events and involve known and unknown risks and uncertainty that could cause actual results, performance or events to differ materially from those expressed. Certain statements, such as those that include the words “potential”, “estimated”, and similar expressions or variations on such expressions may be considered “forward-looking statements”. Financial numbers in this report may include preliminary unaudited numbers or management accounts.

About KMC

3

4

Over View

� KMC Group is the world’s largest bicycle chain manufacturer.

� Bicycle Chain and Motorcycle Chain are the main products of KMC

Group.

� The main clients are SHIMANO, GIANT, Merida, HONDA , and

YAMAHA.

� KMC was identified as Chinese

famous trademarks in China in

2013.

� KMC Taiwan was identified as

operational headquarter by

Taiwan government in 2013.

◎KMC Group

company area company area

Headquarter

KMC Taiwan Taiwan KMC Vietnam ASEAN

KMC Tianjin North China

KMC Shenzhen﹡ South China

KMC EU Europe KMC Indonesia ASEAN

KMC USA North America

﹡consolidated in 3Q15

Plant Location

Service Center

Bicycle Chain Motorcycle Chain

KMC International Inc.

5

Over View

5 circles form 1977

6

KMC Vietnam

KMC Indonesia

KMC EU

KMC International Inc.(Headquarter)

KMC Taiwan

KMC USKMC Tianjin

Location

KMC China

KMC Shenzhen

7

� KMC is riding on bicycle uptrend, product upgrade will

contribute to near-term ASP/GM upside.

� Group integration plans implemented successfully ,and

these entities generate synergy.

� The important development plan in ATS, GDO ,and others.

Latest News

8

Milestone

1970s EstablishmentManufacture-oriented

1980 sExpandingTechnology and Management-oriented

1990 sComposition Cross-StraitsMarketing and R&D oriented

1977, Set up

1986, started partnership with

SHIMANO

1990,Composition Cross-Straits

Established KMC Vietnam for MT.Established sale channel in EU,US , and Asia.

2011, went public through backdoor-listing with a private placement 2012, The Consolidated Plan started

2000 sGlobal OperationValue-oriented

2010 sOrganizational ReengineeringValue-oriented

Industry information

9

10

What is Bicycle Chain� Bicycle Chain is one of important

components in the drivetrain system of one bicycle.

� The drivetrain system is one of parts of one bicycle, the others are frame and rim system.

� For many reasons to cycle, such as environmental protection, lower energy consumption , decreasing pollution and heavy traffic, human health , sports and leisure.

� Bicycles are no longer bicycles, so chains would keep pace with the times.

11

Drivetrain system

≒≒≒≒

Drivetrain system for bicycles Engine and Drivetrain system for bicycles

12

Cycling culture is changing

13

Trend of High-end Bicycle Chain

Time

Market scale

1980 1990 2000 2010

9 speed

8 speed

10 speed

11 speed

14

Trend of High-end Drivetrain System product model

2008 2009 2010 2011 2012 2013

8

speed

9

speed

10

speed

11

speed

15

KMC is riding on bicycle uptrend

BC

65%-70%

MT

30%-35% KMC

90%

16

Motorcycle Transmission and main clients

BC

65%-70%

MT

30%-35%

17

Motorcycle Market information

BC

65%-70%

MT

30%-35%

0.0

2.0

4.0

6.0

8.0

10.0

12.0

14.0

16.0

2008Y 2009Y 2010Y 2011Y 2012Y 2013Y

Motorcycle produced in Asean

Indonesia Vietnam Thailand Philippines

Core Competence

18

19

Core Competence�Full products range and high value ratio ( cost/performance)

�Global sales network and local connection�Large manufacture scale and quickly delivery�Unique production tech�Long-term strategy cooperation partnership with clients

20

Perfect integration in core technology

KMC KMC KMC KMC

ChainChainChainChain

Precise Precise Precise Precise moldmoldmoldmold

SelfSelfSelfSelf----designed designed designed designed equipmentequipmentequipmentequipment

Heating Heating Heating Heating processprocessprocessprocess

CoatingCoatingCoatingCoatingprocessprocessprocessprocess

Manufacture Manufacture Manufacture Manufacture technologytechnologytechnologytechnology

AutomationAutomationAutomationAutomation

21

The state-of-the-art technology

22

New model for coming years(DLC)

DLC (Diamond Lean Chain)

S-Works McLaren Tarmac

23

New model for coming years(EPT)

24

New model for coming years(e-Bike chain)

e-Bike X11e X11e X11e X11e X10e X9e X1X10e X9e X1X10e X9e X1X10e X9e X1

� Highest Torsion Resistance 350kgf

� Highest Pin Power 400kgf

� Tensile Strength Min. 1000kgf

� Compatibility: BOSCH e-Bike system

and other e-Bike system

Financial Summary

25

26

BC

65%-70%

MT

30%-35% KMC

90%

Consolidated Balance Sheet合併資產負債表Consolidated Balance Sheet (Audited)

現金及約當現金 Cash and cash equivalents 830 88% 395 20% 681 26% 900 26% 2,330 46%其他流動資產 Other current assets 92 10% 670 34% 840 32% 1,012 29% 1,267 25%固定資產 Fixed assets 2 0% 514 26% 486 19% 824 23% 782 15%其他資產 Other assets 15 2% 382 19% 584 23% 772 22% 732 14%資產總計 Total Assets 939 100% 1,961 100% 2,592 100% 3,508 100% 5,111 100%

銀行借款 Loan from bank 0 0% 341 17% 708 27% 586 17% 1,990 39%其他及長期負債 Other liabilities 76 8% 499 25% 385 15% 657 19% 777 15%負債合計 Total Liabilities 76 8% 841 43% 1,093 42% 1,244 35% 2,766 54%股本 Capital 1,030 110% 1,030 53% 1,056 41% 1,092 31% 1,092 21%保留盈餘及其他 Retained Earnings (168) -18% 90 5% 443 17% 1,173 33% 1,252 25%股東權益合計 Total Equity 862 92% 1,120 57% 1,499 58% 2,265 65% 2,344 46%負債及股東權益總計 Liabilities and Equity 939 100% 1,961 100% 2,592 100% 3,508 100% 5,111 100%

1H15

新台幣百萬元/Unit:NT$ million

FY13FY12FY11

Backdoor-listing

KMC-Taiwan

consolidated

KMC-EU&US

consolidated

KMC-Tainjin

consolidated

經營層改組 收購台灣桂盟 收購歐美桂盟 收購天津桂盟

FY14

27

BC

65%-70%KMC

90%

Consolidated Financial performance

合併損益表Consolidated Income Statement(Audited)

營業收入 Net Sales 173 100% 1,353 100% 2,092 100% 2,780 100% 1,570 100%

營業毛利 Gross Margin 22 13% 384 28% 645 31% 948 34% 617 39%

營業利益 Operating Profit (30) -18% 248 18% 403 19% 537 19% 398 25%

淨利 Net Income 2 1% 257 19% 378 18% 462 17% 304 19%

每股盈餘 EPS(NT Dollars) 0.02 2.49 3.76 4.31 2.78

新台幣百萬元/Unit:NT$ million

FY13 FY14FY12

收購歐美桂盟 收購天津桂盟

FY11 1H15

Backdoor-listing

KMC-Taiwan

consolidated

KMC-EU&US

consolidated

KMC-Tainjin

consolidated

經營層改組 收購台灣桂盟

28

Amortization affect

BC

65%-70%

1Q14 2Q14 3Q14 4Q14 FY14

Revenue 632 601 766 781 2,780

Gross Profit 220 235 273 220 948

Operating Profit 126 142 163 101 531

Net Profit 110 116 136 100 462

Operating Margin 19.9% 23.6% 21.3% 12.9% 19.1%

Net Profit Margin 17.4% 19.4% 17.8% 12.8% 16.6%

Amortization of Intangible Assets* 9 9 14 14 46

1Q14 2Q14 3Q14 4Q14 FY14

Revenue 632 601 766 781 2,780

Gross Profit 220 235 273 220 948

Operating Profit 135 151 176 114 577

Net Profit 119 126 150 113 508

Operating Margin 21.4% 25.1% 23.0% 14.6% 20.7%

Net Profit Margin 18.9% 20.9% 19.5% 14.5% 18.3%

* Because of the acquisition cost exceeded shareholders' equity of acquiree, the premium

should be allocated to Intangible asset, such as Customer Relationship and Patent.

The Intangible asset will be amortized during 4.5 to 5 years.

Announced Financial Statements include amortization*

in NTD mn

exclude amortization

in NTD mn

Group integration plans

29

30

KMC

KMC-TW

KMC-EU,US,ID

Integration plans in coming years

KMC KMC

KMC-VN

KMC-TW

KMC-VNKMC-EU,US,ID

KMC

KMC-TW

KMC-VN

KMC-Tianjin

KMC-EU,US,ID

KMC

KMC-TW

KMC-VN

KMC-Tianjin

KMC-EU,US,ID

KMC

KMC-TW

KMC-VN

KMC-Tianjin

KMC Shenzhen KMC Shenzhen

KMC China #3

2011 2012 2013 2014 2015 2016

STEP 1

STEP 2

STEP 3

STEP 4

STEP 5

STEP 6

KMC-EU,US,ID

KMC

KMC-TW

KMC-VN

KMC-Tianjin

KMC Shenzhen

KMC China #3

2017

STEP 7

KMC China #4

31

China is No.1 in bikes production

North China

East China

South China

West China

In 2013, all factories in China produced 82M bikes and 37M e-bikes

32

One of integration(ATS*)Intake camshaft

Rail

Gear of oil pump

Engine crankshaft

Rail

Timing Chain

Exhaust camshaft

*ATS means Automobile Timing System

Drive chain of oil pump

33

RailChain

Opener

One of integration(GDO**)

**GDO means Garage Door Opener

34

Prior acquisitionYear Target Company

Purchase Price

(1)

Prior BV of

Target(2)

Prior NI of

Target(3)

PBR

=(1)/(2)

PE

=(1)/(3)

FY12KMC TW

KMC VN1,000 584 164 1.7 6.1

FY13

KMC Europe

KMC USA

KMC Indonesia

400 274 51 1.5 7.8

FY14 KMC Tianjin 800 465 90 1.7 8.9

FY15 KMC Shenzhen ﹡ 2,950 2,000 330 1.5 8.9

﹡consolidated in 3Q15

unit in NT$ million

35

Financial Plan

EarningEarningEarningEarningBank loan

Capital

Development Plan

36

37

Development Plan

Bicycle Chain

MotorcycleTransmission ATS GDO

OtherBicycle

Component

the same industry

the same core technology

38

Cycling is the best and simplest total solution

� Cycling has always existed as a solution to environmental protection, lower energy consumption , decreased pollution, heavy traffic, human health.

� Bikes for sports and leisure are growing .

39

KMC is riding on cycling uptrend� KMC continuously invests in advanced

technologies.

� KMC has optimum products portfolio.

� KMC delicate in brand and distribution

management.

� One-Stop Shop.

40

Contact IR Team

For more information or to provide feedback

on our investor relation, please contact at

E-mail：jeterchen@kmc-international.com

or ir@kmc-international.com

41