Pacific Hospital Supply Co., Ltd 3Q2018 Company Report

Pacific Hospital Supply Co., Ltd 3Q2018 Company Report

Our Milestone PAHSCO was Ranked Top 5% for Corporate Governance from 2014to 17 & has been awarded with Best Rankings for Information Transparency and Disclosure for 7 consecutive years since 2008. 2018 New Factory obtained GMP certification in January 2017 2016 New Factory obtained pharmaceutical manufacturer & ISO 13485 Certification New Factory constructed at Tong Lo Science Park in December 2014 2013 2012 Implemented BPM system 2011 2010 Obtained 11,997m 2 of production capacity and expanded Tong Lo (F3) 2009 Tong Lo (F1) constructed in November 2008 2006 The automatic warehousing system was officially implemented in August 2005 Tong Lo (F0 ) formed to expand the production of sterilize medical product 2004 PAHSCO became a public listed company in the stock market 2002 Tong Lo (F0) received GMP Certification 2001 Tong Lo Factories received ISO9001 & CE Certification 1987 Established mold department in the subsidiary company Established a subsidiary company - Pacific Precision Technology Co., Ltd. Implemented Oracle ERP systems Issued series of secured domestic convertible bonds & obtained 7,085 m 2 of land Tong Lo Factory constructed & expanded the production of gas piping products (F2) 1980 Started the production & trading of central medical gas equipment 1977 PAHSCO formed with a stock Capital of NT$ 1 Million 2

Company News Common Wealth Magazine Ranked PAHSCO No. 1059 in Top 2000 Enterprise (2017) No. 1069 in Top 2000 Enterprise (2016) No. 1071 in Top 2000 Enterprise (2015) No. 10 in Precision Instrument Industry No. 711 for Sales Growth No. 530 for After Tax Profit No. 159 Most Profitable Manufacturer

Our Location Miaoli Taipei Headquarter 3 Factories at Tong-Lo Industrial Park Taiwan Taichung Office New Factory at Tong-Lo Science Park Kaohsiung Office

Current Factories Land Area Floor Area Number of Workers 23,500 m² Factories 33,650 m² (Full capacity of 1.8B TWD Sales) AS/RS 1,650 m² (2,400 storage spaces) Dorm 2,100 m² (150 people capacity) --------------------- Total of 37,400 m² 876 people (3Q2018) 5

New Factory Land Buildings Capacity 46,000 m² Factory 44,900 m² AS/RS 4,500m² (8,100 storage spaces) Dorm 6,300m² (380 people capacity) --------------------- Total of 55,700 m² Max. 12 Sterilizer 4.3B TWD sales With full capacity *Calculation base: Each sterilizes 30M TWD per month 6

Our Certificate

Introduction to Medical Product Industry and Future 450 400 350 300 250 200 150 100 50 - Global Market for Medical Device and Equipment: 10 13 Middle East and Africa 2016-2020 CAGR forecast 6.4% 7.2% 6.9% 15 19 Other Europe Market size in 2016 and 2020(f) Unit:Billion (USD) 6.6% 7.5% 89 69 106 80 5.8% 167 209 CAGR 6.4% 340 436 Asia Pacific Western Europe America Global Source: 2016 ITA Medical Devices Top Markets Report 8

9 Introduction to Medical Product Industry and Future Global Market for Medical Device and Equipment: Unit:Billion (USD) CAGR Decline Source: Medical Devices Industry Yearbook (2016); IEK(2017)

Introduction to Medical Product Industry and Future Global Medical Product Market Share Estimated percentage by Country Estimated percentage by Category Others 31.8% U.S. 43.9% 2016 Market Size 336 B (USD) Orthodontic Product 7.1% Others 28.2% Diagnostic Imaging Product 24.6% France 3.8% China 5.6% Germany 6.9% Japan 8.0% Orthopodic & Implantable Product 11.9% Assistive Device 12.5% Medical Disposal Devices 15.7% Source: Medical Devices Industry Yearbook (2016); IEK(2017) 10

Market of Aging Population Due to global low birth rate, the population structure is aging at a fast rate. % of health expenditure increased as people aged. Age % of health expenditure <25 3.4% 25~34 5.4% 35~44 6.5% U.S. Europe China Japan 45~54 6.8% 55~64 8.8% >65 13.4% 11 *Source: Franklin Templeton(2016); Council for Economic Panning and Development(2008); United Nations(2006)

Market of Aging Population WWII Baby Boom: 1946-1964 U.S births increased rapidly Aging Boom: 2011-2029 Baby boomers start to enter age of 65 1950~70 Period 1980~2010 Period 2010 Period Childhood Adulthood Elder Global Population of Children vs. Elders (%) Under 5 Over65 It is estimated global population age over 65 will surpass age under 5 after 2020 and the difference will continue to grow. *Source: Franklin Templeton(2016); United States Census Bureau (2016); United Nations(2013) 12

Overall Index of Geographic Areas Developed Countries with Subcontract Manufacturing Focus (ODM/OEM) Emerging Countries with Self-Branding Focus (OBM) US Japan Germany China Taiwan 2017 Population (Million) 326 126 81 1379 24 Overall Index Medical Industry Index Age (0~14:15~64:65up) 19:65:16 13:59:28 13:65:22 17:22:11 13:73:14 Birth Rate:Death Rate 13 : 8 8 : 10 9:12 12:8 8:7 Fertility Rate 1.9 1.4 1.5 1.6 1.1 Life Expectancy at Birth 80 85 81 76 80 2016 GDP (Billion USD) 18,624 4,940 3,478 11,199 529 GDP per Capita(USD) 57,638 38,901 42,070 8,123 22,453 GDP Growth Rate 1.5% 1.0% 1.9% 6.7% 1.4% Health Expenditure per Capita(USD)2015 Change of Health Expenditure per Capita (2011 ~ 2015) 9,536 3,733 4,592 426 1,315 2 ~ 5% Steady -17 ~ 22% Fluctuated -13% ~ 7% Fluctuated 11 ~ 18% Fast Growing -2 ~ 3% Fluctuated Health Expenditure / GDP 16.3% 9.5% 13.0% 5.2% 5.9% Hospital Beds per 1000 persons (unit) 2.9 13.7 8.2 3.8 6.4 Source: CIA The World Factbook; World Bank; Ministry of Health and Welfare of Taiwan 13

Sales Distribution (By Country) PAHSCO 2016 PAHSCO 2017 Germany 6.3% Latin America 5.1% North America 7.4% Other Europe 10.3% Other Asia 11.4% Middle East & Others 5.7% China 11.5% Japan 25% Taiwan 17.3% Germany 8.4% Latin America 4.9% North America 7.6% Other Europe 10.9% Other Asia 12.1% Middle East & Others 5.7 % China 11.6% Japan 21.5% Taiwan 17.3% 14

Sales Distribution (By Currency Type) PAHSCO 2016 PAHSCO 2017 TWD 17% Euro & Others CNY 5% 12% JPY 18% USD 48% TWD 17% Euro & CNY Others 10% 5% JPY 17% USD 50% 15

Sales Distribution (By Country) PAHSCO 3Q2017 PAHSCO 3Q2018 Germany 9.3% Latin America 4.5% North America 7.8% Other Europe 11.7% Middle East & Others 5.6% Other Asia 11.8% Japan 20.7% China 11.0% Taiwan 17.6% Latin America 4.7% Germany 8.2% North America 8.8% Other Europe 10.0% Other Asia 12.1% Middle East & Others 3.6 % China 11.4% Japan 23.2% Taiwan 18.0% 16

Sales Distribution (By Currency Type) PAHSCO 3Q2017 PAHSCO 3Q2018 Euro & Euro & TWD 18% CNY Others 10% 5% JPY 16% USD 51% Others CNY 5% 10% TWD 18% JPY 19% USD 48% 17

Percentage of Product Categories Medical Device Medical Equipment Piping System 3Q2018 93.0% 6.7% 0.3% 2017 92.8% 6.1% 1.1% 2016 92.9% 6.8% 0.3% 2015 90.40% 8.50% 1.10% 2014 90.90% 7.00% 2.10% 2013 90.9% 7.0% 2.1% 2012 90.5% 6.9% 2.6% 2011 91.0% 5.9% 3.1% 2010 90.5% 5.00% 2.9% 85% 90% 95% 100% 18

Disposable Medical Device Wound Drainage System, 10% PAHSCO 2016 Respiratory Bottles, 2%, 2% Tubes, 26% Tubes Sales Revenue:434 Million(NTD) % of Product TR: 26% (1 st ) Closed Suction System (CSS) Sales Revenue:427 Million(NTD) % of Product TR: 25% (2 nd ) Others, 23% Bags Sales Revenue:204 Million(NTD) % of Product TR: 12% (3 rd ) Bags, 12% CSS, 25% Wound Drainage System Sales Revenue:162 Million(NTD) % of Product TR: 10% (4 th ) 19

Disposable Medical Device Wound Drainage System, 11% PAHSCO 2017 Respiratory Bottles, 2%, 2% Tubes, 26% Others, 23% Closed Suction System (CSS) Sales Revenue:448 Million(NTD) % of Product TR: 26% (1 st ) Tubes Sales Revenue:443 Million(NTD) % of Product TR: 26% (2 nd ) Wound Drainage System Sales Revenue:189 Million(NTD) % of Product TR: 11% (3 rd ) Bags, 10% CSS, 26% Bags Sales Revenue:179 Million(NTD) % of Product TR: 10% (4 th ) 20

Disposable Medical Device Wound Drainage System, PAHSCO 3Q2017 Respiratory Bottles, 2%, 2% Closed Suction System (CSS) Sales Revenue:355 Million(NTD) % of Product TR: 26% (1 st ) 11% Tubes, 25% Tubes Sales Revenue:337 Million(NTD) % of Product TR: 25% (2 nd ) Others, 24% Bags, 10% CSS, 26% Wound Drainage System Sales Revenue:144 Million(NTD) % of Product TR: 11% (3 rd ) Bags Sales Revenue:137 Million(NTD) % of Product TR: 10% (4 th ) 21

Disposable Medical Device PAHSCO 3Q2018 Wound Drainage System, Bottles, 2% Respiratory, 2% Closed Suction System (CSS) Sales Revenue:324 Million(NTD % of Product TR: 25% (1 st ) 12% Tubes, 24% Tubes Sales Revenue:320 Million(NTD % of Product TR: 24% (2 nd ) Others, 26% Wound Drainage System Sales Revenue:154 Million(NTD) % of Product TR: 12% (3 rd ) Bags, 9% CSS, 25% Bags Sales Revenue:124 Million(NTD) % of Product TR: 9% (4 th ) 22

Sales Distribution (By Domestic & Export) 2016 & 2017 PAHSCO 1980-2015 Domestic 17% Export 83% 1980 2000 2005 2010 2015 Export 0% 15% 38% 81% 82% Domestic 100% 85% 62% 19% 18% 3Q2018 Domestic 18% Export 82% 23

Sales Distribution (By Customer Type) PAHSCO 2016 PAHSCO 2017 OEM/ODM 52% OBM 48% OEM/ODM 49% OBM 51% OEM/ODM OBM Total OEM/ODM OBM Total 871M 818M 1.69B TWD 873M 861M 1.73B TWD 24

Sales Distribution (By Customer Type) PAHSCO 3Q2017 PAHSCO 3Q2018 OEM/ODM 51% OBM 49% OEM/ODM 52% OBM 48% OEM/ODM OBM Total OEM/ODM OBM Total 694M 646M 1.34B TWD 679M 635M 1.31B TWD 25

Historical Sales 1800 Unit: Million(NTD) 1600 1400 1200 1000 800 600 400 200 0 The 12 th consecutive year with sales growth since 2005. Year 2005 2009 2016 2017 Sales (NTD) 531M 1.13B 1.69B 1.73B 26

27 Sales by Quarter Unit: Thousand (NTD) YEAR 2010 2011 2012 2013 2014 2015 2016 2017 2018 Q1 299,794 325,890 342,607 357,542 371,812 363,487 452,010 424,871 407,839 Q2 319,461 372,298 341,626 382,503 362,975 353,704 452,428 447,684 427,293 Q3 310,737 342,243 369,016 351,901 376,479 439,502 419,800 455,706 479,033 Q4 318,310 303,188 385,459 351.950 395,398 464,871 365,426 395,710 Total 1,248,302 1,343,619 1,438,708 1,443,896 1,506,664 1,621,564 1,689,664 1,734,971 1,314,165 Growth 10.0% 7.7% 7.1% 0.4% 4.4% 7.6% 4.2% 2.7% -1.9% Gross Margin 41.1% 38.7% 39.2% 37.5% 36.1% 36.9% 36.5% 29.7% 26.3%

Financial Information * Ignore the evaluation loss of financial liabilities ITEM 2010 2011 2012 2013 2014 2015 2016 2017 3Q17 3Q18 EPS 5.44 5.39 4.77 4.88 4.95 5.32 5.04 3.59 2.97 2.21 ROE % 27.85 22.62 20.28 19.49 18.55 18.18 15.80 10.65 8.88 6.49 ROA % 22.02 18.93 16.75 16.06 15.33 14.32 11.13 6.98 5.70 4.19 Net Profit Margin Net Cash per Share 27.27 24.06 21.90 22.29 21.70 21.66 19.69 13.67 14.62 11.12 9.84 10.44 12.40 12.64 11.82 6.81 - - - - *2011Pay-out: $3 Cash Dividend and $1.00Stock Dividend presented at the Shareholders Meeting. *2012Pay-out: $4 Cash Dividend presented at the Shareholders Meeting. *2013 to 2017 Pay-out: $2.5 Cash Dividend presented at the Shareholders Meeting. 28

Medical Device Market Size in China Unit: Million (USD) Market size & Market growth rate CAGR 9.6% Source: BMI Espicom; IEK(2017) 29

Our Sales in China Unit: Million (NTD) 38% yoy 83 14% 115 10% 130 15% 143 18% 165-0.4% 4.1% 194 194 201 1.9% 147 150 Sales (NTD) PAHSCO Total (Billion) 2010 2011 2012 2013 2014 2015 2016 2017 3Q17 3Q18 2010 2011 2012 2013 2014 2015 2016 2017 3Q17 3Q18 1.25 1.34 1.44 1.44 1.51 1.62 1.69 1.73 1.34 1.31 China (Million) 83 115 130 143 165 194 194 201 147 150 China % 6.7 % 8.6 % 9.0 % 9.9% 11.0% 12.0% 11.5% 11.6% 11.0% 11.4% 30

Thank you for your attention & patience! *For your information, PAHSCO presentation will be updated quarterly on the official website: http://www.pahsco.com.tw/investment-23 31