2014 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

PAHSCO has been awarded with Top-Ten (2008~2011) & Top- Five (2012~2013)

ranking for information transparency and disclosure for 6 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

Our Location

Miaoli

Taiwan

Our Certificate

-

50

100

150

200

250

300

350

400

Middle Eastand Africa

OtherEurope Asia Pacific

WesternEurope America

Global

7 14

66 81

137

305

9 19

89 96

179

391

6.5% 8.2%

7.9% 4.2%

6.8%

5

Introduction to Medical Product

Industry and Future

Global Market for Medical Device and Equipment:

2012-2016 CAGR 6.5%

Source: BMI(2014); IEK(2014)

Market size in 2012 and 2016(e)

Unit：Billion (USD) CAGR

6.5%

6 Source: Frost & Sullivan, 2010

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

Introduction to Medical Product

Industry and Future

7

Introduction to Medical Product

Industry and Future

Global Medical Product Market Share

U.S. 38.6%

Japan 9.1% Germany

7.8%

China 5.2%

France 4.5%

Others 34.8%

2013 USD 328 B

Source: BMI(2014); IEK(2014)

Estimated percentage by Country

U.S. 39.0%

Japan 8.7% Germany

7.6%

China 5.9%

France 4.3%

Others 34.5%

2014 (e) USD 346 B

8

Introduction to Medical Product

Industry and Future

Global Medical Product Market Share

Estimated percentage by Category

Diagnostic Imaging Product 25.9%

Medical Disposal Devices 15.4%

Assistive Device 12.4%

Orthopodic and

Implantable Product 11.7%

Orthodontic Product

6.7%

Others 27.9%

2014 (e) USD 346 B

Source: BMI(2014); IEK(2014)

Diagnostic Imaging Product 25.8%

Medical Disposal Devices 15.4%

Assistive Device 12.4%

Orthopodic and

Implantable Product 11.7%

Orthodontic Product

6.8%

Others 27.9%

2013 USD 328 B

9

Main Geographic Areas of

Global Medical Device Market

5X

5X

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.

Developed Countries

with Subcontract Manufacturing Focus

(ODM/OEM)

Emerging Countries

with Self-Branding Focus

(OBM)

US Japan Germany China Taiwan

Ove

rall In

de

x

Population (Million) 319 127 81 1354 23

Age

(0~14:15~64:65up) 19 : 67 : 14 13 : 62 : 25 13 : 66 : 21 17：74：9 14 : 74 : 12

Birth Rate：Death Rate 13 : 8 8 : 9 8 : 11 12 : 7 9 : 7

Fertility Rate 2.0 1.4 1.4 1.6 1.1

Life Expectancy at Birth 79.6 84.5 80.4 75.2 79.8

2012 GDP (Million USD) 16,244,575 5,937,767 3,427,853 8,229,381 475,327

GDP per Capita(USD) 51,709 46,530 42,569 6,078 20,386

GDP Growth Rate 2.8% 1.4% 0.7% 7.7% 1.5%

Me

dic

al In

du

stry

Ind

ex

Health Expenditure per

Capita（USD） 8,895 4,752 4,683 322 2,479

Change of Health

Expenditure per Capita

(2009 ~ 2012)

3 ~ 5%

Steady

2 ~ 13%

Steady

-6% ~ 7%

Fluctuated

14 ~ 27%

Fast Growing

2 ~ 3%

Steady

Health Expenditure / GDP

(%) 17.9 10.1 11.3 5.4 6.6

Hospital Beds per 1000

persons (unit) 2.9 13.7 8.2 3.8 6.4

11

Overall Index of Geographic Areas

Source: World Bank(2012); Country Economy(2012);CIA World Fact book; AmCham TW

12

Our Major Exporting Countries

Japan 25%

Taiwan 18%

China 11%

U.S. & Canada

10%

Germany 6%

Saudi Arabia

3%

PAHSCO 2014

Others

27%

Japan 23%

Taiwan 19%

China 10%

U.S. & Canada

7%

Germany 7%

Saudi Arabia

5%

PAHSCO 2013

Others

29%

13

80% 85% 90% 95% 100%

2009

2010

2011

2012

2013

2014

87.3%

90.5%

91.0%

90.5%

90.90%

92.0%

5.00%

6.6%

5.9%

6.9%

7.00%

7.1%

7.7%

2.9%

3.1%

2.6%

2.10%

0.9%

Medical Device Medical Equipment Piping System

Percentage of Product Categories

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 )

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%

Wound Drainage System

Sales Revenue:106 Million(NTD)

% of Product TR: 7%

15

Tubes, 27%

CSS, 24%

Bags, 13%

Others, 22%

Wound Drainage

System, 9%

Bottles, 3% Respiratory

, 2%

Disposable Medical Device

Closed Suction System (CSS)

Sales Revenue:363 Million(NTD)

% of Product TR: 24% (2nd )

Tubes

Sales Revenue:415 Million(NTD)

% of Product TR: 27% (1st )

Bags

Sales Revenue:189 Million(NTD)

% of Product TR: 13% (3rd)

PAHSCO 2014

Wound Drainage System

Sales Revenue:129 Million(NTD)

% of Product TR: 9%

16

Client Type of Medical Device & Equipment

Unit: Thousand (NTD)

2013

Domestic: 18.7 % Export: 81.3%

2014

Domestic: 17.8 % Export: 82.2%

ITEM OBM ODM/OEM Total OBM ODM/OEM Total

Device 568,302 744,556 1,312,858 626,512 759,355 1,385,867

Equipment 77,350 28,863 101,213 84,623 22,514 107,137

Total 645,652 768,419 1,414,071 711,135 781,869 1,493,004

% 45.7% 54.3% 100.0% 47.6% 52.4% 100.00%

17

Sales by Quarter

Unit: Thousand (NTD)

YEAR 2008 2009 2010 2011 2012 2013 2014

Q1 222,680 246,505 299,794 325,890 342,607 357,542 371,812

Q2 221,649 282,752 319,461 372,298 341,626 382,503 362,975

Q3 240,016 294,085 310,737 342,243 369,016 351,901 376,479

Q4 276,562 311,086 318,310 303,188 385,459 351.950 395,398

Total 960,906 1,134,428 1,248,302 1,343,619 1,438,708 1,443,896 1,506,664

Growth 15.4% 18.1% 10.0% 7.64% 7.08% 0.36% 4.35%

Gross

Margin 33.25% 39.37% 41.07% 38.67% 39.24% 37.46% 36.06%

18

Financial Information

ITEM 2008 2009 2010 2011 2012 2013 2014

EPS 2.73 (0.23) 5.49 5.39 4.75 4.88 4.95

ROE % 19.27 (1.40) 28.14 22.62 19.89 19.49 18.55

ROA % 12.88 (0.93) 22.20 18.93 16.68 16.06 15.33

Net Profit

Margin 13.60 (1.12) 27.55 24.06 21.79 22.29 21.70

Net Cash

per Share 7.20 8.00 9.84 10.44 12.37 12.64 11.82

*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-out: $2.5 Cash Dividend presented at the Shareholders’ Meeting.

19

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-out: $2.5 Cash Dividend presented at the Shareholders’ Meeting.

ITEM 2008 2009 2010 2011 2012 2013 2014

EPS 3.53 4.24 5.44 5.39 4.75 4.88 4.95

ROE % 22.23 22.71 27.85 22.62 19.89 19.49 18.55

ROA % 14.00 16.15 22.02 18.93 16.68 16.06 15.33

Net Profit

Margin 17.60 20.69 27.27 24.06 21.79 22.29 21.70

Net Cash

per Share 7.20 8.00 9.84 10.44 12.37 12.64 11.82

20

Revenue

(NTD) 2008 2009 2010 2011 2012 2013 2014

Total 0. 96 B 1.13 B 1.25 B 1.34 B 1.44 B 1.44 B 1.51B

China 49 M 73 M 83 M 115 M 130 M 143 M 165M

% 5.1 % 6.5 % 6.7 % 8.5 % 9.0 % 9.9% 11.0%

49 M

73 M 83 M

115 M 130 M

143 M

165 M

2008 2009 2010 2011 2012 2013 2014

(NTD) 14%

50% 13%

38%

Our Sales in China

10%

yoy

15%

21

Thank you

for your attention & patience!