JONHON Optronic:Access China conference highlights

Defense: Jonhon sees limited impact from China's military reform in theform of tenders for military-grade connectors as it has already adoptedopen bidding in the past. That said, due to organizational reshufflingwithin the military headquarters due to the reform and the fact that orderflows are typically slow in the first two years during a five-year-plan period,the company did see a slowdown in terms of defence order intakes in2017. However, management expects new orders to improve in 2018 (2Hin particular, given the seasonality) and to further take off in 2019-20.

    Telecom: Management expects 5G to become a significant growth driverin 2019-20 as the capex cycle kicks off. Before that, management doessee some pressure for its existing product portfolio as 4G capex continuesto trend down. This, however, could be mitigated by the surging exportorders, which saw 30%+ growth in 2017 (overseas customers include:Samsung and Nokia).

    NEV: New order growth significantly picked up in 2H17 and theproduction schedule for 4Q17 was extremely busy. Overall, managementexpects this segment to continue to be a key growth driver in the comingyears. Moreover, cooperation with Tesla has been progressing well,with its high-voltage connector product likely entering Tesla’s suppliercatalogue, in addition to the existing EV charge coupler.