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Letters to Shareholders

Dear shareholders,

Due to geopolitical tensions, inflation, the pandemic, and wars in 2023, facing numerous unfavorable external factors, the global demand for business has fallen behind expectations. This situation has also had an impact on the operation of AcBel Polytech. However, we have also seen hidden important opportunities. At this time of fluctuation, we actively transformed to improve our adaptability, strengthen internal management, enhance product competitiveness, and ensure that we can flexibly respond to market fluctuations, and we would like to report to all shareholders AcBel’s operating results in 2023 and business outlook for 2024.

2023 Operating Results

AcBel Polytech. achieved a consolidated revenue of $27,845 million for the entire year of 2023, an increase of 12.33% compared to the previous year of $24,789 million. The revenue has been growing continuously for six years. Due to one-time expenses and amortization generated by the acquisition of overseas targets, the consolidated net income before tax was $45.79 thousand, and EPS was $0.07.

The successful acquisition of the former ABB Power Conversion Division (now OmniOn Power) at the beginning of last year injected growth momentum into AcBel’s revenue in the second half of the year. In the second half of the year, both parties have engaged in strategic cooperation in aspects of procurement, business, research and development, and manufacturing. We can expect this cooperation to generate a comprehensive effect of one plus one greater than two, and ensure that we continue to create value in this time of uncertainty.

The revenue of the power supply industry was lower than expected, mainly due to the dual impact of sluggish overall demand for consumer power supplies in the terminal market and customer inventory adjustments, resulting in sales performance below expectations. Although there was a slight growth in demand for fuel cells and network communication products for enterprise power supplies, the revenue performance remained unchanged from last year. In addition, the telecommunications power supply business from OmniOn Power not only adds new customer groups to the company, but also brings a considerable degree of revenue contribution. In terms of overall consolidated revenue, the merger with OmniOn Power still leads to a historic high in revenue for the power supply industry.

In response to the global trend of net zero carbon emissions and revolutionary changes in transportation methods, it has become an inevitable trend for vehicles to switch from fuel internal combustion engines to electric power drives. AcBel has been deeply involved in the field of electric energy conversion for vehicles for many years and successfully won key electric module orders from international electric vehicle manufacturers in 2023. In addition, AcBel has collaborated with the largest charging station partner in the United States, from design to manufacturing, and has a key position as a Total Solution in the entire electric vehicle ecosystem.

Since last year, the new energy industry has launched a new business model of light asset to service conversion, no longer just building solar power plants, but transforming into managers of solar power plants. Through the joint venture with the life insurance industry, “AcSun Energy Inc.” has launched a continuous operation with asset management and maintenance services as the main axis, which has brought great revenue injection.

Under market tightening, the metal stamping industry significantly increased its automation equipment ratio last year to improve production efficiency and quality. Despite facing market challenges for the year 2023, profits remained at a certain level.

Business Environment and Development Strategy

The Company has been committed to practicing ESG in multiple fields for a long time. In the year of 2023, it has won the “Taiwan’s Top 100 Sustainability Model Corporate Award in Comprehensive Sustainability Performance Category” for 2 consecutive years, and has been awarded the “Platinum Award for Electronic Information Manufacturing in the Category 1 Sustainability Report” for 9 consecutive years. In addition, the achievements in carbon management were also highly recognized. It won the “2023 ESG (Carbon Management) Award” awarded by SGS and was praised by the media as the top three enterprises with the most progress in carbon reduction. This year is the ample harvest of AcBel Polytech's ESG achievements! These honors represent the Company's commitment to the environment and will continue to lead the Company in achieving its vision of "providing efficient and clean energy solutions, becoming a sustainable positive cycle of energy" through outstanding ESG practices in the future.

Operating outlook for the year of 2024

This year marks the implementation of AcBel’s transformation. Despite external uncertainties such as overall economic and geopolitical factors, we are actively improving our competitiveness in changing markets. AI applications and the electric vehicle market will be important areas for our technological strategic layout; the rapid development of AI technology has brought important changes to the technology industry, and the increasing popularity of electric vehicles and strict environmental regulations have reshaped the industry chain of the automotive market. These two markets have brought huge demand for products, and also require us to increase our efforts in technology, market promotion, and cooperation. We need to flexibly adjust our business models to create more growth opportunities, thereby bringing positive operational prospects to the Company.

The comprehensive effect of merging OmniOn Power's strategy will gradually demonstrate benefits in the year of 2024, especially in the development of high wattage products, which will help AcBel enter the 5G and AI server field, increase the proportion of revenue in enterprise power supply, and expand the depth and breadth of its product line. By strengthening product portfolio and deepening customer cooperation, adjusting product proportion year by year, increasing the proportion of data centers, high-end servers, and automotive power products, and strengthening the application of enterprise power products, we hope to further expand our market share and competitive advantage in the field of enterprise power through this strategy.

The year of 2024 is an important time point for the implementation of AcBel transformation. We thank all customers, employees, shareholders, and partners for their support. Looking forward to the future, AcBel will uphold the core concept of sustainable development and work together with all employees to create sustainable value for the enterprise.

Wish all shareholders.

Good health and good luck.

                                                        AcBel Polytech Inc.

                                                        Chairman: Hsu Chieh-Li 

                                                        Manager: Hsu Chieh-Li

                                                        Chief Accountant: Chen Chien-Nan