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A. Stotz Investment Research

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Hiwin Technologies: A State of Emergency in Taiwan Presents an Opportunity to Buy at Cheaper Levels

CEO, A. Stotz Investment Research

Dr. Andrew Stotz, CFA

Equity Bottom-Up

<ul><li>High level of cash sales, capable of funding growth internally, and improving asset turnover relative to its sector</li><li>Robust demand from global machinery market and tight supply allows for strong order backlog and rising prices, revenue up 31% YoY in 4Q17</li><li>Capacity should increase by 20-30% to meet demand from new plants in Chaiyi and Taichung to start operation in 2Q18</li><li>Stock is attractive at 18CE* PEG ratio of 1.1 relative to Asian Capital Goods at a PEG ratio of 2.1</li><li>Risk: Rapid industry capacity expansion could lead to oversupply</li></ul><p><em>* Consensus Estimates</em></p>

High level of cash sales, capable of funding growth internally, and improving asset turnover relative to its sectorRobust demand from global machinery market and tight supply allows for strong order backlog and rising prices, revenue up 31% YoY in 4Q17Capacity should increase by 20-30% to meet demand from new plants in Chaiyi and Taichung to start operation in 2Q18Stock is attractive at 18CE* PEG ratio of 1.1 relative to Asian Capital Goods at a PEG ratio of 2.1Risk: Rapid industry capacity expansion could lead to oversupply* Consensus Estimates

HIWIN (2049 TT): Robust Demand from Global Machinery Market