Good day, everyone. Before we start, I would like to share a few messages from the cover page this quarter.

You guys can see that our customers, such as Amazon, reMarkable, Montblanc, Samsung, Sharp, and Soofa, basically they deploy and utilize various E Ink products across different application scenarios. As you can see from the screen, from consumer electronics to retail environments and further to public infrastructure, more partners and applications are choosing to adopt color e-paper, demonstrating that its value in sustainability, energy efficiency, and versatile use cases continue to gain strong market recognition.

I'm going to talk more in my following presentations. Next page.

Take few seconds to look at the safe harbor statement. All right, next page.

For the first three quarters, revenue reached NT$29.1 billion, representing 29% year-over-year growth. Operating profit was nearly 10 billion, basically NT$9.99 billion.

Non-op amounted to NT$1.4 billion. Net income came around NT$9.39 billion with an EPS at NT$8.17.

Basically, the first three quarter performance—sales revenue, gross profit, operating profit, and even net income—basically all reached historical highs. For operating profit, I think, as I mentioned earlier, driven by sales growth in the past three quarters, basically operating profit increased up to nearly 10 billion with operating margin rising to 34.3%.

Basically, we expand more innovative e-paper applications. We continue to invest in R&D and talent pools.

We believe that research, development, innovation are the key drivers of long-term growth and sustainable operations. As mentioned earlier, operating profit has reached historical highs.

For the assets, total assets increased from NT$89.5 billion third quarter last year to NT$103.1 billion this year, representing a year-over-year increase of NT$13.6 billion, from percentage perspective, 15% increase. The company's total assets basically already over 100 billion with approximately 70% cash and financial assets.

On cash flow, by third quarter this year, both cash and financial assets continue to increase, reaching a total of NT$68 billion, up by NT$8.6 billion compared with the end of last year. We continue to maintain strong profitability and healthy cash flow with ample capital resources.

We continue allocate funds appropriately in line with operational plans to support sustainable growth. Okay.

Apart from the financial, I would like to share some market information. Basically, this quarter we continue to deepen collaboration with partners across the e-paper ecosystems.

In the e-reader and e-note segments, we worked with leading brands to launch new color and various sized products, including Amazon Kindle, BOOX, reMarkable, iReader, and iFlytek, further expanding the penetration of e-paper applications. At the same time, the leading brand Montblanc introduced its digital paper and digital pen series inspired by its iconic writing instruments and paired with our E Ink e-paper display.

Basically, this product delivers a refined and highly realistic writing experience, offering business professionals an elegant tool that combine both style and practical functionality for capturing ideas and creating content. Also, this quarter we are introducing broader range of large-format products designed to deliver exceptional performance across both indoor and outdoor applications.

As you can see from the screen, top left, the company InkPoster, its product Afresco, basically that is a digital art frame. It uses our Spectra 6 technology to bring electronic paper technology into home decor and artistic display.

It enhances the aesthetic quality of interiors and allows the artwork on the walls to change with seasons and even moods. The digital frame helps preserve your memories and creates a refined, art-inspiring digital living experiences.

Also, from the top right, we partner with a Japanese IT solution provider, Stella Link, to launch the J-Poster powered by, once again, our Spectra 6 color technology. This company, Stella Link, has also adopted 31.5-inch Ecopost signage, and this is manufactured by our partner AUO Display Plus to expand Japan's e-paper signage market.

Those solutions can be flexibly deployed in retail stores, transit hubs, campuses, museums, hotels, and other public spaces. If you look further down, bottom left, a leading innovator where is located in the States, I think specifically in Boston, a company called Soofa launched 75-inch full-color street kiosk.

Basically, it was designed for smart cities, providing real-time information and wayfindings. It operates with 100% solar power, requiring no electrical work, which effectively reducing installation and operating costs, while creating new opportunities for sustainable transformation in outdoor advertising market.

From very bottom center and right, additionally, e-paper signage has been introduced onto streets and even inside highway buses in Japan. From the screen you can see, allowing passengers to access real-time local tourism information and enhancing the riding experience.

E-paper features eye comfort, wider viewing angles, and low power consumption, enabling stable operation even in environments with limited power supply, making it energy saving and environmentally friendly. All right, next page.

We basically remain committed to ongoing investment in sustainability. Of course, ESG development has once again been recognized with several distinguished ESG and sustainability awards in Taiwan.

We are pleased to share the latest achievements. The first example is this year we ranked fifth place among large manufacturing enterprises and was also selected for the CommonWealth Talent Sustainability Award.

CommonWealth basically is a leading magazine locally in Taiwan. Also another two awards: the first one is Taiwan Sustainability Action Awards, TSAA, and another one Asia-Pacific Sustainability Action Awards, APSAA.

We received five honors in total, including three gold awards, one silver, and one bronze. Last but not least, for the third consecutive year, we have been ranked among top 100 foreign investor picks in Taiwan, placing fourth this year.

Basically, that demonstrates strong market confidence in our balanced progress toward both profitability and sustainability, because under E Ink, when we conduct the ESG activities, two pillars: profitability and sustainability, we believe both of them are equally important. Okay.

The next one, we previously mentioned we work with Hsinchu City Government and introducing low-carbon, energy-efficient outdoor e-paper display install in a place called Xiangshan Wetlands that's where is located in locally in Hsinchu City in Taiwan. We have further expanded e-paper applications into the Xiangshan Marine Conservation Education Center.

Full-color e-paper signage is now used to present information about surrounding marine environment and ecological habitats, enhancing local education and visitor guidance. Also the signage application have been extended to exhibition of important cultural relic in Yangzhou, where e-paper is used basically in the museum and also serve as a information and educational medium accompanying the artifacts.

In the fields of application and culture, we work very hard, aim to continue leveraging our low-power, low-carbon, environmentally friendly display technology to create a broader positive impact while further expanding E Ink's contribution to society. Last but not least, I think I mentioned this before, I think since last year we have been collaborating with the MIT, the academic institution, not made in Taiwan, Massachusetts Institute of Technology, MIT, through its innovation acceleration platform, it's called MIT Solve program.

It was established in 2016. This program focuses on the question of how technology can address the world's most pressing challenge.

Each year through an open global selection, Solve selects innovative solutions in education, climate, health, and sustainability. Basically, those selected teams receive funding as well as opportunities for mentorship, corporate partnerships, and international collaboration as well.

Solve is MIT's initiative to bring together problem solver to tackle the world's most pressing problems through open innovation and partnership. As part of this collaboration, we established E Ink Innovation Award within this program to encourage global teams to leverage e-paper technology in creating solutions that generate positive impact across education, like what I mentioned, the environment, energy, and healthcare.

Basically, this marks the first time we have brought e-paper onto a global social innovation stage, observing how creators from diverse fields reinterpret the potential of our technology. Once again, we selected four winning teams from over 100 submissions addressing issues like what I mentioned, such as improving education, accessible healthcare, living environments.

These projects not only reflect e-paper's origins at MIT, but also embody our commitment to giving back to the society. Through this innovative cases, we once again see the possibilities of e-paper, not just merely as a display technology, but also a medium capable of expanding social value and impact.

Okay. Basically that is my sharing this quarter.

We can move to the Q&A session.

We just finished our Mandarin session, our earning conference, an hour ago. Maybe I can share some of the Q&A that we conducted previously.

I think our chairman gave some guidances over first quarter next year and basically very general guidance for 2026. We receive a lot of inquiry about the October sales revenue.

They have a concern, how are we going to see the first quarter sales revenue next year? Basically our guidance is our first quarter next year will be better than the first quarter this year, okay?

Not to worry too much. It will still be lower than the fourth quarter this year, okay?

That's the first thing I would like to share. Through the capacity expansion, I think for the H5, which means the fifth larger production line in Hsinchu, that's why we call it H5, basically we believe it will be highly contributes the capacity definitely next year, because it has been gradually ramping up from this quarter.

We believe in the following two to three years, every year we're going to achieve record highs in terms of the sales revenue, operating profit, and net income. Following by H5, H6, the sixth larger e-paper production line, basically is under planning, and we believe very likely to be move in by end of next year.

What I'm trying to say is with the contribution of these two larger e-paper production line, we do have enough capacity to support potentially the increasing demand. I think recently we also made a public announcement about our Guanyin plan.

Guanyin basically is a name of places where it's not far from our Hsinchu office. The board just passed the plan where we are going to build a new building in Guanyin.

Apart from that plan, we also leased a old building for the future use. To sum up, basically we have a plan.

We purchased a land in Guanyin and we are going to build a new building for the production line. Also we also leased the old building where we can take advantage of the old building and could of course put some equipment there and start having a more capacity.

From that perspective, we do have a solid plan for the capacity expansions. That is my quick recap about our Mandarin session earning calls.

I do see some inquiries, all right. We're going to take the questions.

Hi, Adam.

Hi, Lloyd Chen are you?

I'm good.

Thanks. Just quickly on what you said, because October was weak and people start getting worried about inventory in the system, etc.

What are you seeing from an inventory perspective? Why was October really a surprise for you?

Was it or is it because of holidays, because of some external factors, or is it customers cutting?

Right. Actually, it's it it was not surprise to us because I think in in our last quarter conference, the the guidance we gave is second quarter will be the peak.

I'm sorry, second quarter basically peak, and third quarter in terms of the sales revenue slightly lower than second quarter, and and in fourth quarter basically is is the lowest. Why?

Basically, I think in in in the first three quarters we we did have some pull-in, basically that that that caused the relatively lower fourth quarter. Also from from CE perspective, they they definitely prepared the the inventory before the Christmas.

For for the holiday season, so that you can imagine from that perspective fourth quarter would have been relatively lower. Also for the ESL, even we we do see a very intact demand and and strong demand, but the thing is, they they wouldn't spend too much effort for for the new tag during the Christmas, because they they try to, get things stabled.

From that perspective, that can explain the relatively weaker fourth quarter, you know? I think basically it's in line with the guidance we provided previously, yeah.

Once again, I think this year we believe we we already we strongly believe we can hit the target we set previously, and basically it's better than last year. We believe we can the whole year we can achieve the the historical high in terms of the sales revenue and operating profit and net income.

We also believe the following two to three years we can achieve the same thing, yeah.

Right, right. Basically it's roughly in line with your internal expectations, you would say?

Nothing too surprising? Right, okay.

I guess the thing because I think we saw an inventory correction in ESL about 18 months to one year ago, right? I guess that's what people are a bit worried about is are we facing this again?

Or what are your clients saying? Especially on the ESL side of things, are they saying that they ordered too much, they need to cut?

Basically what I'm asking is are we going to see a sort of end '23, mid '24 kind of inventory digestion phase?

Right, right. Adam, that that's a good question.

I think one year ago, we we did face inventory correction issues. That was basically caused by the three-color, four-color, transitional change.

That issue already gone. There there there's no such issue now.

Not to worry about the the inventory issue from that perspective. According to the market feedback from our end customer, which is retailer, or even our SI, system integrators, all the feedback about the the the e-paper tag, they they stay very confident and positive.

I think in in the States, we just started one one of the leading retailers they are using us, our tag, which is Walmart. We believe the rest of the retailers there, they started the trial, and most of them, I think so far they stay very positive.

We basically stay confident about it in in in in the USA market. Also, I think during our Mandarin session, our chairman also talked about European, even European sort of like a more more matured in terms of the ESL, but UK going to be started very, very soon, the the the top-tier retailers there.

We believe we we we're going to have some good news from there. We we we remain very positive and and confident about the ESL market, yeah.

You're not worried about inventory then.

Right, correct.

Right. Can I squeeze another question?

I have no idea how many people are in the queue, but do I have time for another one on consumer electronics?

Yes. One or two should be fine.

I do see two to three people. It's okay, yeah.

Just a quick one on consumer electronics, right? Because if I zoom out and I look at the history of E Ink, right, in consumer electronics, before the color e-reader took off, basically was a steady business, right?

It was a steady business making NT$11 billion, NT$12 billion of annual revenue, and it was sort of the level where every year it was, right, around this level, 10 to 12, to speak, right? Very stable.

Then in 2024, there was the launch of the color e-reader and there was a surge in revenue, right, in 2024, and this sort of level of 11, 12 went to 19, right, in one go. I'm not trying to guess next quarter or next two quarters, but say in the next three to five years, do you see this sort of jump as sustainable, as in the new normal is closer to this 19 billion, or we're going to go back gradually to previously steady state of 11, 12 billion?

How do you think the market has shifted from your perspective?

Right. Adam, I think one of our strategy for CE market is to use our color technology to trigger the further growth?

Basically, after we launched our color technology, we do see that in a happening now. Once again, we remain positive and confident about the growth.

Coming back to your question, how big the jump going to be, I think we still need some time to observe, especially given the macro uncertainty there. The thing is even there's a lot of moving parts on the macro, but for the targeted customers or targeted audience under CE business, I think if they like to read, if they like to write digitally, I think even the macro situation is not that good, they would still consider to do such investment.

What I'm trying to say is, from that perspective, even there's a lot of moving parts on the macro, we still believe we have enough driver from those targeted group of customers out there.

Right. You're not expecting last year's number to fall off a cliff or something like that.

We don't think so. Whether we can just beat it, I think we need a bit time to observe.

Definitely expecting the growth, yeah, year-over-year, yeah.

Okay. Sounds good.

I'll go back in the queue. Thank you, Lloyd.

All right. Thank you, Adam.

Hi.

Thank you. Thank you.

This is actually Ian from Fiera. Thanks for the time.

On the capacity additions, H5 and H6, in percentage terms, how much do they add to the existing four lines? Is it as simple as just 50% or are they actually larger plants?

Let me explain one by one. H5 basically it's in our capacity already.

In terms of the capacity, I think that is 1.5 or two times than the rest of four lines, basically 1.5 or 2x compared with the rest of four individual lines. For H6, basically it's still under planning.

Most likely the timeline could be end of next year or early the year after, 2027. The capacity basically will be higher than H5, but to what extent I think we are still under planning.

I can add such color to you for H5 and H6. On top of that, the Guanyin new factory, the plan is after we purchase the land, we definitely need some time for the construction.

The building basically will be ready around '29 and or early I'm sorry, '28 or early 2029. Also at the same time, we're going to figure out the size of the equipment we are going to put.

The production line, the e-paper production line in Guanyin factory basically that will be bigger than H6. Given those information I just provided, you can see our confidence toward the capacity expansion.

If we are not very confident about the future demand, we dare not to do such investment. So

Just to check the timeline for H6, you said potentially end of 2026, that would be to start construction or to actually come online with production?

H6 will be located in our existing Hsinchu buildings. Basically what we need to do just place the order and have it shipped and have it install.

There's no need to build a new building for that. The building is ready to go.

What we need to do just decide the size of it and then place order and get it ready. The possible timeline would be, I think, end of next year or early the year after, '26 2027.

Late '26 or early 2027, yeah, we can have it install. It may take one or two quarters to ramp up.

That's sort of the timeline going to be.

Understood. All of this expansion, as you say, indicates a lot of confidence on future demand.

What firm visibility do you have, say, for H5 and H6? Do you already have customers placing orders 12 or 24 months out, or is this a much shorter lead time?

Let me put in this way. Once again, for H5 and H6, basically we are using the larger size of the equipment, which means on the one hand they will be designed for the large-format display.

On the other, if we don't use it for the large-format display, we can also to use it for the CE and ESL. Basically, strategically, that add operational efficiency in terms of the unit cost.

What I'm trying to say is, of course, we haven't received 100% the customer orders, but we are confident, and we believe the demand in the long run is intact. What we can do is we can concentrate on H5 and H6 and have it loaded first, because it's going to bring down our unit cost from that perspective.

Yeah. I didn't realize five and six would both be focused on large format.

That suggests huge growth in the large-format display and maybe a little bit lower outlook for ESL.

Right. We believe the TAM for signage will be bigger than the ESL, yeah.

Let me put in this way, I think most of the large-format signage, they are still in paper based. According to our analysis, only less than 10% converted to the digitalization.

There's still a massive room to grow. That's why when we decide the further capacity expansion, we're going to choose the bigger size of the equipment, because most of the leading OOH, out-of-home advertisement players, they want a solid, singular large-format display, not really a sort of like a tiled one.

If we don't do a large size of the equipment, of course we can provide through a tiled display, but that is not their preference. That's one of the consideration to use the bigger size of the equipment, yeah, for the further capacity expansion, yeah.

Thank you. I'll get back in the queue.

All right. We receive one online question.

Hold on. Let me read it.

It's about any new emerging technology in the market. Is it going to be a threat against us?

Then I do see your question. [Retina?]

e-paper, basically, I sort of heard of it, but very vaguely, I may need to go back and check it. Since it doesn't serve my memory very well, I'm sure it's a good technology, but I don't think it could be a threat against us.

In general, the way we built our patent portfolio is from one layer to the other. By the way, we have more than 6,000 patents globally.

We started from the fundamental e-paper chemistry, and then to another layer, we filed the patents, for example, for e-paper module and e-paper algorithm and even the device. From different layers.

Whoever wants to get into this industry, they tend to walk around and walk around, they eventually give up. On the one hand, we want to be the technology leadership because we have been investing a lot of money, our total R&D cost against our sales revenue basically is around 15%.

That's quite a lot from a technology company perspective. On the other, we invest e-paper production, and we also want to be the cost leadership.

We believe as long as we can be a technology leadership and cost leadership, I think whoever want to step into this industry, it definitely not very easy for them to compete with us, since we from the technology perspective, we go quicker; from the cost perspective, we can go lower. I think we are quite competitive from these two categories.

We do notice one or two copycats in China, but I think firstly, you need to understand, they claim they can manufacture e-paper, whether it's in the laboratory stage or the mass production stage. To be very, very honest with you, when we claim we can make color e-paper, we did it like 15 years ago, and then we just started, like one or two years ago.

It has been a long journey. You need to be persistent, and also you need to be financially strong.

Once again, from the pilot production lab stage to the mass production, it's not that easy. Also, those one or two copycats in China, I hate to say this, potentially that could be some patent issue.

I think inside China, we don't really get bothered to do anything. Once stepped out of China, we definitely are going to chase after them.

That's how we build our portfolio and our strategy toward those potential competitors, yeah. Okay.

Hi, Fraser. Feel free to raise your questions.

Yes, very well. Hi, Fraser.

Great. Hi.

Thank you very much for letting us join this conference call. I missed some of it earlier because I had some technology issues, but could you just talk a little bit more about the signage opportunity and actually can you talk a bit about where the scale of the business is now and how quickly it's growing and what's driving that growth, and then a little bit about how quickly it might grow into the future and where you see the strongest adoption going into the future as well?

Right. Fraser, your voice is a bit breaking up.

I think I get your question. Can you hear me now?

Yeah. Firstly is the scale of the signage now and how quickly it's growing and what's going to make it grow more?

Right. Okay.

The signage business currently still relatively lower, and I would like to break it out into three main categories. The first one is retail signage.

Basically our strategy is to work with our existing ESL SI. I think currently, for example, one of the biggest retailer in the USA, they are using our e-tag.

They have the initiative to consider the e-paper retail signage. From that perspective, we do see the potential.

One of the strategy is we work with our ESL SI to make that happen. That is the first part.

The second one is the indoor signage. The strategy we are having now is to work with the branders such as Samsung, Sharp, AUO, even a company called TPV.

TPV owns the brand Philips in the display categories. For those branders, they do have the module capacity.

They do have the capability to make the LCD signage already. One of the potential issue they are facing now is some of their customers, they want the green technology for the signage areas.

They came to us, we try to work out a solution apart from LCD, and e-paper signage solution should be the suitable solution from the end customers. Our strategy is to work with them.

That's why when there's a public announcement out there, we set up the joint venture with AUO. We're going to co-create the signage business, especially in indoor first, with those branders.

Those branders I just mentioned, let me just repeat: Samsung, Sharp, TPV, and AUO. Last but not least, for the outdoor signage, especially the street furniture on the relatively large-format display ranging from 60-inch to 80-inch.

From that one, I think the driver from them is currently mostly they are using the paper signage. Less than 10% being digitized, but the technology they are using is LCD and LED.

I think currently there's a trend, some of the major cities globally, they ban the LCD and LED because it produce the light pollution. There's a driver.

They come to us. They discuss how to further leverage our green technology in the signage area.

A lots of positive technical discussion going on, but let me put in this way: we do see the potential, but I can be totally honest with you, for next year, definitely we are expecting a significant growth on the signage business because the base year basically is relatively lower. If you are talking about a huge, meaningful sales revenue contribution, I think it's still a while.

We do see the potential and we believe the potential in the following two to three years and even going forward. Okay?

I hope I answer your questions, yeah. Okay.

At the moment, you don't break out the size of that revenue because it's such a small percentage of total? Right.

I think still single digit. Still single digit against our total sales revenue, still single digit, yeah.

Okay. Would you, as it gets a little bit bigger, will you start to break it out so that we can see the growth in it, because it could be quite exciting.

I know it's a small number, but it could be grow quite quickly over the next two or three years. We believe so, yeah.

I think if you are looking at the near terms like next year, I think it would take slightly longer than one year, yeah. If you are talking about two to three years, yeah, I think, yeah, it will be growing, yeah, definitely more.

What has it been growing at the last year or so, or It hasn't accelerated yet. I think what I can tell you is lower single digit to the higher single digit.

Growth rate? Or No, sales revenue percentage against our total sales revenue, yeah.

The growth rate, I think, yeah, it is quite high, yeah. Definitely, yeah, higher teens, yeah, if you are talking about the growth rate, yeah.

High teens or High teens, yeah. Okay.

Great. Thank you very much.

All right. No worries.

Thank you.

Hi, Josie.

Sorry, can you hear me right now?

Yes, very well.

Thank you for taking my question. My question is that you mentioned that signage TAM will be even larger than ESL, and this is very exciting.

Just wondering can you add any color on the growing pace, any detail will be much appreciated, for example do you have any targeted timeline, milestones, or a CAGR to share? Thank you very much.

Okay. As I mentioned earlier, three categories: the first one is retail signage, the second one is indoor, the very last one is outdoor.

For the indoor signage, basically it's happening now. Samsung, Sharp, TPV, Philips, they are launching their new product.

I also introduced previously. That's something happening now.

We are collecting the market feedback from them, but we stay positive. For retail signage, I think since we basically regard ESL as organic growing business.

As long as the retail signage, the ROI payback is sensible to those retailers, we believe it will be growing quickly since the existing SI basically just leveraging their existing technology, just add the bigger size onto their platform. If you are talking about the timeline, I think indoor basically is ongoing, okay?

We believe it will be growing more and more. Retail signage, we are cooking it.

We do see the potential. For outdoor signage, since it's a large format and they are expecting a singular large-size display, on the one hand we rely on our H5 to manufacture it; on the other, since it's a very new stuff, I believe there's still some technical issue there.

Coming back to your question, confidence over the outdoor signage is there, but if you are talking about how quick it's going to be, I think still need a while. I think retail signage, the indoor, it's happening now.

Thank you. If I may, just wondering what kind of penetration are you seeing in the retail signage, since ESL is happening very very quickly?

Are you having end customers or SIs already placing orders on those signage?

The penetration is still very, very low. The level of the trial is increasing.

It's increasing now. A lot of trials, a lot of pilots.

There's still no official rollout at this moment. A lot of trial, a lot of pilot at this moment.

The penetration basically still low,

yeah. I see.

Thank you. Thank you very much.

All right, thank you.

All right. Thank you for your participation, and see you next quarter.

Thank you.