Letter to Shareholders

Dear shareholders,

 

The year 2022 remained a year of political and economic instability. The ongoing war for over a year since the outbreak of the Russo-Ukrainian conflict at the beginning of the year 2022 has intensified geopolitical risks, triggered energy and food crises, and raised supply chain and labor costs. In response to inflation, the US began raising interest rates in March 2022, with a total increase of 17 basis points for the year. Inflation remains uncontrolled, and the possibility of further rate hikes adopted by the US and various countries is not excluded. However, according to the IMF's forecast, global economic growth is expected to increase from 2.7% to 2.9%, and global inflation is expected to drop from 8.8% in 2022 to 6.6% in 2023, a justification that the IMF believes that the global economy has been on an uptrend. With the efforts of all employees, AcBel’s revenue has grown positively for five consecutive years from 2018 to 2022. We hereby report sincerely AcBel 's 2022 operating results and 2023 business outlook to all shareholders.

 

2022 Operating Results

The annual revenue in 2022 reached NT$25.321 billion, up by 15.6% from 2021. The annual net income in 2022 was NT$636 million and the earnings per share was NT$1.23, an increase of 5.7% compared to the same period of 2021. Although the mainland China area remained shadowed by the COVID-19 pandemic in the first three quarters of the year 2021, AcBel yet strengthened its internal epidemic prevention measures, adhered to government’s laws and regulations on anti-pandemic prevention at all times, and quickly responded to reduce the impact on production. Facing the ongoing material shortages, AcBel deepened communication with our supply chains and continued to follow up on raw material supplies to ensure stable supply. On the other hand, AcBel has continued to upgrade our level of automation, reduce reliance on human resources, and improve operational efficiency. All these efforts have stabilized customer confidence in AcBel and fostered win-win cooperation through difficult times.

AcBel has been awarded a “Gold Rating” in the sustainability assessment conducted by EcoVadis for two consecutive years, the assessment of which covers seven management indicators, across 21 sustainability criteria, in four themes: Environment, Labor & Human Rights, Ethics and Sustainable Procurement. Moreover, among the sustainability award categories of the "TCSA Taiwan Corporate Sustainability Awards,“ the largest sustainability competition awards in Taiwan, AcBel was awarded three awards: the "Taiwan Top 100 Sustainability Model Corporate Award", the "Sustainability Report Category- Electronic Information Manufacturing Industry - Category 1 Silver Award" and the "Best Performance of Specific Categories - Innovative Growth Leader Award" three sustainable awards; in particular, AcBel has been awarded for its sustainability reports for 8 consecutive years. Facing the impact of climate change, AcBel is committed to actively participating in various international initiatives to strive towards the goal of Net Zero. In October, 2022, AcBel finished submitting our science-based emissions reduction targets to the Science Based Targets initiative (SBTi). By formulating our 2030 carbon reduction targets in various scopes and pragmatically implementing the carbon reduction commitment, AcBel is dedicated to implementing the "UN’s Sustainable Development Goals (SDGs)” and giving full play to our positive influence on sustainability, thereby driving our value chain towards low-carbon transformation and actively responding to the world trend of sustainable development. For the years to come, AcBel will continue to exert our positive influence and utilize our professional core competencies in power supply design, renewable energy and automotive power to achieve a vision of environmental sustainability by combining our value chain partners, including customers, supply chains, users and the like, to jointly fulfill our global citizenship responsibilities.

 

Business Environment and Development Strategies

Upholding the commitment of "We Power the World with Sustainable/Renewable Energy and High Efficiency Power Supply," AcBel will continue to create maximum value for our customers, employees, and shareholders for the years to come. By leveraging our strong research and development capabilities, AcBel has successfully expanded into emerging applications such as green energy and electric vehicles.

 

2023 Operating Prospect

Our business direction will focus on three major areas: power supplies, electric vehicles, and green energy. The consumer power supply market is facing adjustments in the demand of terminal markets, with customers prioritizing inventory liquidation in the short term. However, Acbel will continue to maintain close cooperation with customers by strictly controlling inventory and improving the efficiency of customers’ and our own internal resources usage. The enterprise power supply market will continue to grow, driven by trends in industries such as servers, data centers, fuel cells, and storage devices. Acbel's power supply products are expected to achieve a sales target of 82,533 thousand units this year.

AcBel announced the acquisition of ABB’s Power Conversion Division before the just-passed Lunar New Year. This acquisition not only strengthens AcBel’s product portfolio but also expands our customer footprint in the United States while enhancing the local capabilities in research and development, manufacturing, operation, and service. Through this acquisition, AcBel aims to build a more complete and resilient platform in terminal applications such as 5G, data centers, high-performance computing, electric vehicle charging infrastructure, and warehouse automation. On top of that, AcBel is allowed to optimize our global business strategy and accelerate our progress towards becoming a solution provider.

 

Wish all shareholders.

Good health and good luck.

                     AcBel Polytech Inc. Chairman: Hsu Chieh-Li

                     President: Hsu Chieh-Li

                     Chief Accountant: Yeh Jin-Mao