10 in 10 with ISDN Holdings - Positioned for Long-Term Growth with Strategic Expansion and Diversification

• ISDN operates in two primary business segments: Industrial Automation (&ldquo IA&rdquo ) and Renewable Energy (&ldquo RE&rdquo ).
• Established in 1986, IA is ISDN&rsquo s core business and contributes around 94% of the Group&rsquo s revenue, with the PRC contributing almost 71% to the IA revenue.
• Under the IA segment, the Group offers a full range of advanced automation solutions and services, from precision components and engineering services to full machine and cloud solutions. Our four core pillars&mdash Motion Control, Precision Manufacturing, System Solutions, and Software Solutions&mdash allow us to deliver comprehensive, high-performance industrial automation solutions.
• Our Motion Control offerings provide end-to-end services, from design to installation, commissioning, and after-sales support, backed by strategic partnerships with industry leaders like Maxon Motor, Yaskawa, Renishaw, Harmonic Drive and many world-renowned manufacturers. Our Precision Manufacturing capabilities enable the production of sophisticated industrial components for high-tech sectors such as automation, aerospace, and medical, ensuring superior quality and precision. Beyond manufacturing, our System Solutions integrate cutting-edge technologies to optimise operations and accelerate intelligent transformation across industries. Complementing these pillars, our most recent addition of Software Solutions provides edge-to-cloud integration, enhancing digitalisation, efficiency, and innovation while seamlessly bridging hardware and software for advanced industrial applications and providing access to powerful analytics.
• ISDN entered the RE business in 2013, focusing on mini-hydropower projects in Indonesia. Having navigated a long journey of construction and commercialisation, the Group currently operates three hydropower plants with a total capacity of 24.6MW. the Group is also constructing two additional hydropower plants. 
   

• FY2021 and FY2022 were characterised by a broad-based downturn in cyclical sectors as inventory digestion took precedence and orders were pushed back. The Group was impacted by the global downcycle and weakness in the electronics and semiconductor industry. A majority of the revenue impact was driven by a broad-based slowdown in our key market, China. 
• However, the Group continued to invest through the downcycle and remained committed to building strategic capabilities for long-term growth. As a result, ISDN gained market share in its core markets during FY2023. 
• In FY2024, the Group achieved broad-based growth across business units and regions, underscoring the effectiveness of our strategic initiatives. In China, the IA business grew 4.0% year-on-year (yoy) in 2H2024, while in Southeast Asia, IA revenue increased 3.1% yoy. With China&rsquo s manufacturing sector rebounding, persistent labour shortages, and Southeast Asia being a key beneficiary of the ongoing global supply chain reshuffling towards a &ldquo China+1&rdquo model, the Group is well-positioned to capitalize on emerging opportunities and drive long-term sustainable growth.
   

• The significant growth in RE revenue in 1H2024 was driven by the successful commercialisation of all three mini-hydropower plants. FY2024 was the first full year of contribution from the three mini-hydropower plants. This strong performance highlights the benefits of our strategic diversification, as RE provides a recurring and stable income source, complementing the cyclical IA segment. 
• As mentioned previously, the Group has invested strategically to strengthen core capabilities, expand market share, and positioning ourselves for recovery. While we did observe early signs of turnaround in our key target markets in early 2025, uncertainties in the market have increased since the announcement of tariffs by US President Donald Trump. Although we do not foresee any material impact as of now due to our &ldquo Asia-for-Asia&rdquo strategy, we are continuously monitoring the situation and will evaluate mitigation strategies accordingly.
   

• Yes, our dividend policy dictates that 25% of the net profit attributable to shareholders will be distributed as dividends. This policy has been consistently upheld for many years, even during the industry downcycle, reflecting our commitment to delivering stable returns to shareholders.
   

• ISDN actively pursues M& A and partnership opportunities that create synergies and strengthen our core capabilities. In the past two years, we have made several strategic investments and partnerships to expand our expertise and market presence: 
  • Set up Novapeak, expanding our capabilities in AI-powered drone inspection for buildings. 
  • Set up Servo Technology Sdn Bhd, bolstering our competitiveness in Malaysia&rsquo s IA market, especially in the semiconductor sector. 
  • Invested in FUJI Master Engineering, further enhancing our capability in custom automation, test solutions, and Industry 4.0 manufacturing. 
  • Increased stake in IDI Laser, providing advanced laser solutions for emerging semiconductor applications. 
  • Exclusive distribution agreement with Dafang AI Pte. Ltd, bringing the only 3-in-1 construction robot to the market, approved for adoption by HDB in Singapore. 
• Our M& A and partnership strategy aligns with ISDN&rsquo s four key pillars in the IA segment, allowing us to proactively adapt to industry shifts and strengthen our competitive edge.

• ISDN leverages over 30 years of expertise to deliver a full stack of IA solutions, from hardware to software and from components to cloud solutions, providing customers with comprehensive, tailored support. 
• Beyond technology, ISDN is present across various geographical regions. With a strong presence across China and Southeast Asia, including key growth markets like Malaysia and Taiwan, the Group is well-positioned to capture opportunities from the ongoing supply chain reshuffling and the region&rsquo s growing demand for high-tech manufacturing solutions. 
• Another key differentiator is ISDN&rsquo s resilient business model. By strengthening our core capabilities even during industry downturns, we have built a solid foundation for long-term, sustainable growth. In addition to IA, our hydropower business generates stable, recurring revenue, balancing cyclical fluctuations and providing greater financial resilience. 
• With a strong market presence, advanced technological capabilities, and a balanced revenue mix, ISDN is uniquely positioned to deliver consistent growth and create lasting value for stakeholders.
   

• ISDN is poised for a new phase of growth, driven by a broader market recovery, strategic expansion, structural growth drivers, and a resilient, well-balanced revenue stream. 
• Establishing presence in high growth geographic markets remains a key priority, particularly in Malaysia and Taiwan, two high-potential markets for IA and semiconductor manufacturing. With a favourable policy environment and increasing investments under the " China+1" supply chain shift, ISDN has established new facilities in these key semiconductor hubs to enhance market access and capture emerging opportunities. 
• Beyond automation, our hydropower business continues to grow as a stable revenue driver. With three mini hydropower plants generating recurring income and Lau Biang 2 and 3 scheduled for completion in early 2026,   the RE segment strengthens ISDN&rsquo s ability to balance cyclical and non-cyclical revenue streams, ensuring long-term resilience. 
• Looking ahead, ISDN&rsquo s commitment to advancing our technological capabilities and expanding in strategic industries aligns with secular long-term growth trends in technology and global industry shifts, reinforcing its position for sustained value creation.
   

• ISDN operates across multiple geographies, with China being a key revenue contributor. To mitigate currency risks, the Group adopts a regionalised business model that aligns revenue and cost structures within each operating market. This natural hedge helps reduce exposure to currency fluctuations. 
• In addition, we aim to book the rate when exchange rates are favourable, helping to reduce foreign exchange losses. We also shorten the conversion time frame to limit currency risk. For instance, USD payments received and converted into IDR are typically converted back to USD within 2-3 days, helping to mitigate the impact of exchange rate volatility.
   

• ISDN considers ESG factors an important part of our operations and business strategy. Outside of China, our activities mainly involve sales, support, and application integration, which have low energy consumption and minimal environmental impact. In China, we have taken steps to improve energy efficiency, including installing a 1 MW solar power system on our rooftops to support our own electricity needs. 
• We are also developing two more hydropower plants of 10 MW each and operating three hydropower plants totalling 24.6 MW in Indonesia and continuing to expand our hydropower business. Hydropower is a sustainable and renewable energy source that helps reduce carbon footprint and global warming.
   

• ISDN&rsquo s is prepared for long-term value creation given its strong market positioning, strategic expansion, and innovation-driven approach. As a full-stack IA provider, ISDN integrates AI, IoT, and motion control to support Asia&rsquo s shift towards smart manufacturing. 
• China remains ISDN&rsquo s core market, where demographic shifts, rising labour costs, and increasing trade tensions are accelerating the push for automation and self-reliance in manufacturing. With the government' s focus on smart factories and industrial resilience, the demand for automation in China is expected to grow significantly. Meanwhile, ISDN&rsquo s presence in Southeast Asia, particularly Malaysia and Taiwan, strategically aligns with the " China+1" supply chain shift, positioning the Group to benefit from regional manufacturing diversification. Our Asia-for-Asia strategy further insulates the business from geopolitical risks and trade disruptions. 
• As the IA segment recovers, ISDN&rsquo s RE business provides stable, recurring cash flow, ensuring financial resilience. 
• With the right technology, presence in high-growth markets, and complementary businesses with proven return profiles, ISDN is well-positioned for multi-year growth